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In a blow to Trump, auto manufacturers reach deal with California

When it comes to pollution standards, this isn’t the news the Trump administration wanted to see.

Four automakers from three continents have struck a deal with California to produce more fuel-efficient cars for their U.S. fleets in coming years, undercutting one of the Trump administration’s most aggressive climate policy rollbacks.

The compromise between the California Air Resources Board and Ford, Honda, Volkswagen and BMW of North America came after weeks of secret negotiations and could shape future U.S. vehicle production, even as White House officials aim to relax gas mileage standards for the nation’s cars, pickup trucks and SUVs.

While the original plan involved Trump administration officials negotiating with California, some of the leading auto manufacturers ended up quietly going around the White House and talking to Sacramento directly. Now, as the Washington Post’s report added, the industry is hoping the administration will join the deal it failed to negotiate.

If you’re new to this story, let’s review how we got here. To address the climate crisis, the Obama administration created tough fuel-efficiency standards for the auto industry, to be phased in gradually.

Manufacturers, not surprisingly, weren’t thrilled, but there was a broad realization that the policy, in conjunction with a series of related efforts, would make a positive difference.

Then Donald Trump got elected. Last summer, the Republican White House announced plans to roll back the tougher standards, making it easier for the automotive industry to sell less efficient vehicles that pollute more.

The president assumed he was helping the industry at the expense of the environment – a trade-off Trump was happy to make since he rejects climate science anyway. What the White House didn’t anticipate was the fact that auto manufacturers concluded that Trump’s anti-climate plans went too far.

In fact, in early June, most of the industry urged the administration to change course, because its plan would produce “untenable” instability.

Why? Because Trump’s plan to gut pollution safeguards was so drastic that many states announced plans to enforce stricter emissions standards on their own.

That includes, naturally, California – home to the nation’s largest consumer base.

The result was a mess: car manufacturers, which had already begun taking steps to comply with the Obama-era policy, faced the prospect of having to make different vehicles to sell in different parts of the country.

Not surprisingly, no one sees that as a sustainable business model.

The White House briefly tried to work out a deal with California, with the intention of creating national standards that everyone could live with. Those talks failed and the administration broke off negotiations with California Gov. Gavin Newsom (D) and his team months ago.

And so, manufacturers decided to open a dialog of their own with the Golden State, which now appears to have produced results.

There’s clearly a lot of work left to be done, in part because of the car companies that weren’t part of the talks – today’s deal covers roughly a third of the industry – and in part because the administration may very well move forward with its plan, regardless of the new agreement.

In terms of the specifics, these are the top-line numbers to keep in mind:

* Obama plan: fleets would average 51 miles-per-gallon by 2025
* Newly negotiated California plan: fleets would average 50 miles-per-gallon by 2026
* Trump plan: fleets would continue to average 37 miles-per-gallon, freezing the status quo indefinitely

It’s worth emphasizing that the auto manufacturers are partly responsible for the disarray: they asked the Trump administration for a break on the Obama-era standards. But by most accounts, they expected the Republican White House to tweak the policy, not kill it. Now the companies are scrambling to put things right.

Watch this space.


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