California agrees to emissions deals with automakers

California agrees to emissions deals with automakers

Deals come despite Trump administration efforts to eliminate state’s rule-making authority.

August 18, 2020

Cleveland, Ohio – Ford, Honda, Volkswagen (including Audi), Volvo, and BMW (including Rolls Royce) have finalized deals to meet California’s stringent vehicle emissions rules, despite the Trump Administration’s plans to eliminate the state’s ability to influence national fuel economy standards.

Deals signed Monday by California Air Resources Board (CARB) officials spell out automaker pledges to improve fuel economy and increase numbers of zero-emissions vehicles (most likely electric vehicles or EVs) in the state. And, because several other states adopt California’s rules, its standards set fuel economy limits for about half the country’s drivers.

The Trump Administration has proposed a new national fuel economy standard, and part of that plan is revoking the U.S. Environmental Protection Agency waiver that allows the state to set higher standards. California and 23 other states have sued to block that cancellation.

The competing legal moves have left automakers in the middle with some quietly embracing the Trump standards which would be easier to achieve that the Obama Administration’s 54.5mpg by 2025 goal. Others, including the six that have agreed to the California standard, have argued that agreeing to the stringent rules will give companies higher levels of certainty when planning what sorts of vehicles to develop and build in the future.

“Each of the automobile manufacturers that have finalized Framework agreements have made additional and individual commitments to expedite the transition to zero-emission vehicles,” CARB officials said. “These agreements… are designated as confidential business information because they relate to specific model production plans and similar matters. Generally, they promote enhanced distribution of zero-emission vehicles.”

The deals with California are less stringent than the Obama-era regulations, but those goals have long been unreachable. Many of the assumptions for the 54.5mpg standard came in 2009 and 2010 when small cars were briefly popular, and regulators and automakers expected them to become a larger portion of the vehicle fleet. Instead, cars waned in popularity while crossovers and SUVs gained market share.

Market share calculations embedded in the Obama standards had already lowered projected targets to closer to 50mpg, and automakers could get credits for changing air conditioning refrigerants and other minor changes, effectively lowering standards to the low-to-mid 40s.

Next steps for fuel economy rules will almost certainly rest with the courts and depend on the outcome of November’s election.

About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and Today's eMobility and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 19 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.