Fuel economy plan could ultimately cost consumers

A Trump administration plan to lower automotive mileage targets for future model years that could be approved in a matter of weeks would result in hundreds of dollars in added costs for consumers, according to a new U.S. Senate analysis.

The analysis, outlined by the office of U.S. Senator Thomas Carper of Delaware, is based on a document sent to the White House before the plan becomes official.

According to Carper, the senior Democrat on the Senate Environment and Public Works Committee, the administration is sticking to previously reported targets that would improve fleetwide fuel economy by about 1.5 percent per year, starting next year, compared with 5 percent per year under current rules. 

Carper’s summary of the plan from the National Highway Traffic Safety Administration and the Environmental Protection Agency comes as the White House is expected to finalize the new regulations in the coming weeks.

More on Fuel Economy

The proposed regulation, called the Safe Affordable Fuel-Efficient Vehicles Rule, will determine not only how much consumers pay for cars and fuel in the future but also how much carbon dioxide will be emitted by personal vehicles. Transportation (air travel as well as autos and trucks) is now the largest source of greenhouse gas emissions in the U.S., outstripping factories and all other sources. 

The intent of creating future fuel-efficiency targets is to reduce greenhouse gases, but consumers also stand to gain if vehicles are more efficient because they will spend less money to fill up their gas tanks.

The Trump administration has argued that the previous targets for model years 2021-26, put in place under President Barack Obama, are too difficult for the auto industry to meet and would ultimately lead to higher vehicle prices, which in turn would reduce car sales and keep consumers in older, less safe cars.

Shannon Baker-Branstetter, manager of cars and energy policy at Consumer Reports, says the evidence suggests that automakers have more than enough affordable technology to meet the Obama targets. Since 2017, when the current fuel-economy improvement program began, vehicles have become safer and more reliable, as well as more efficient, she says.

Costs to Consumers

Carper's analysis of what the scaled-back plan would mean for consumers, first reported by the Washington Post, estimates that consumers would pay less for a new vehicle than under the plan currently in place—saving from $977 to $1,083, Carper said, citing the administration document. But they’d be spending more than $1,400 on fuel over the lifetime of the car.

“Adding hundreds of dollars to the cost of each vehicle would seem to be the opposite of the more affordable vehicles” the administration promised, Carper said in his letter to a senior official at the White House Office of Management and Budget. The letter is dated Jan. 22.

The Senate committee findings echo research conducted by Consumer Reports and released in November. According to the CR analysis, Consumers, under the Trump administration plan, would spend an average of about $3,200 more per vehicle on fuel over the lifetime of their vehicles. Cumulatively, all American consumers would lose about $300 billion, according to the CR analysis. 

The administration plan to lower fuel-economy targets has been challenged by California and other states that want to fight climate change and reduce air pollution.

The auto industry has been split on the Trump administration’s approach. Companies such as General Motors and Toyota have backed the federal government in a lawsuit that would change the rules so that California and other states cannot have their own clean-air rules. Ford, Honda, and two other automakers haven’t joined that suit and instead negotiated a deal with California to produce more efficient vehicles. 

John Bozzella, chairman and CEO of the Alliance for Automotive Innovation, the main industry trade group in Washington, says, “While we have not seen the final rule, automakers continue to support year-over-year increases in fuel-economy standards, and we support a unified program as the best path forward.”

Correction: An earlier version of this article included the incorrect committee on which Senator Tom Carper serves as the ranking Democrat. He serves on the U.S. Senate Committee on Environment and Public Works.