Anyone who thinks that big business hates regulation should look at what’s happening in the auto industry today. While the Trump administration is pushing much-needed regulatory relief, four major carmakers are embracing California’s plans to kill the internal combustion engine.
The issue involves federal fuel economy mandates, a vestige of the 1970s “energy crisis” that forced carmakers to meet increasingly strict fuel economy standards for their new cars. These “corporate average fuel economy” standards resulted in a radical downsizing of the American car fleet back then, and were instrumental in destroying the U.S. auto industry’s lead in the car business.
The energy crisis is, of course, ancient history, but like every other government policy, the CAFE standards never went away. Instead, Washington bureaucrats just came up with new justifications for them. Now the argument is that we need these standards to fight climate change.
So early in his administration, President Barack Obama cajoled automakers into agreeing to impossibly strict fuel economy standards of 54.5 miles per gallon for cars and light-duty trucks by model-year 2025. That’s five years from now. As with the 1970s’ rule, this new one will force a radical redesign of cars. Only this time, because of the physical limits on how many miles you can squeeze out of a gallon of gasoline, the Obama rules will force a mass conversion to electric cars.
The best gasoline-powered cars for mileage on the market today are hybrids, and even then, the most efficient, the Hyundai Ionic, can reach 58 mpg. The tiny conventional Chevy Spark, however, gets only 33 mpg. The most fuel-efficient pickup trucks get less than 30 mpg.
But the EPA rates plug-in electrics as having ridiculously high “miles per gallon” equivalents. (Various studies show that electric cars are no better than gas-powered cars when it comes to environmental impact.) So only by moving lots of electric cars will companies have any hope of getting their CAFE levels up to 54.5
This, of course, is the point. Environmentalists want to force electric cars on the market. But they will be the bane of car buyers, who have little interest in vehicles that can barely go 300 miles without needing an overnight recharge. That’s why, despite massive taxpayer subsidies and endless hype about their environmental benefits, electric cars still account for less than half of one percent of cars on the road.
The Trump administration decided to review the Obama standards to see if they were economically feasible and, not surprisingly, determined they weren’t. It wants to replace Obama’s fuel economy standards with ones that will let automakers continue to build cars consumers want and can afford. The administration also wants to block California’s ability to set its own fuel economy standards, which have created a bifurcated car market.
So why in the world would Ford, Honda, Volkswagen, and BMW decide to join hands with California’s greens, and not with the deregulatory-minded Trump administration?
The Washington Times quotes the Rhodium Group, a research consultant on economic policy, which offers a reason: “Automakers, looking for regulatory certainty and policy support for their growing electric vehicle investments, may prove a willing partner.”
You got that? These carmakers have been dumping money into electric cars because of government prodding. Now, to protect their government-induced investments, they want the government to effectively mandate electric car sales.
Automakers ought to know that this is a deal with the devil.
White House spokesman Judd Deere had it exactly right when he said, “Empowering California is dangerous and will lead to automotive products that have no connection to market demand, and thus slumping sales and job losses. … And while the choice may deliver the stability they crave for the short term, it is bound to bring sleepless nights down the road.”
The question now is whether other car companies will have the fortitude to stand up for car buyers across the country, or will jump in bed with radical anti-consumer environmentalists in the one-party state of California.
— Written by John Merline
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