Trump Admin and California Throw Auto Industry Into State of Uncertainty

The Trump administration ended talks this week with the California Air Resources Board, over vehicle fuel-efficiency standards, dealing a severe blow to the US auto industry which was hoping for a resolution.

In a statement on Thursday, the administration announced that it is on track to roll back fuel-efficiency mandates for auto manufacturers that were set by President Obama. The rollback will challenge California’s authority to set its own, strict standards.

The administration wants to ease the efficiency mandates to raise auto sales, while California wants tougher standards to reduce greenhouse-gas emissions.

In response to the administration’s announcement, California government officials said they planned to defend their authority.

The breakdown in talks between the administration and California is horrible news for the auto industry, which relies on predictability. Automakers require approximately 18 months to incorporate new rules into new model-year designs so ambiguity is detrimental for the companies.  
Many auto-makers have been working on lowering emissions of existing models and producing more electric and hybrid vehicles, but they need to have a clear timeline of targets. Without set rules in place, companies won’t know how much time and resources to dedicate to cutting emissions.

An agreement between California and the Trump administration is critical on this issue because not only is California a huge market itself, but twelve other states adhere to its vehicle emission standards. That makes up more than one third of US auto sales.

It’s unbelievable that both California and the Trump administration are leaving the auto industry in such a huge state of uncertainty. If an agreement isn’t reached soon, the industry could suffer from a loss of productivity.

By Millie Dent