WASHINGTON — Instead of making life easier for automakers, the less-stringent fuel economy rules due from the Trump administration by March 31 are expected to be quickly challenged in court, leading to regulatory uncertainty and huge compliance headaches.
The wrong bet on which regulations ultimately win — Obama-era rules or the current administration's Safer Affordable Fuel Efficient standards — could prove costly for manufacturers.
"The pullback on corporate average fuel economy standards will affect certain fuel efficiency strategies of manufacturers, but they aren't going to abandon the battery-electric or other new-energy vehicles," said Scott Shepard, an analyst at Navigant Research, citing the need to compete in countries that are seeking to eliminate internal combustion engines.
"What's in jeopardy," he said, "are efficiency gains to conventional vehicle lines, like deploying start-stop systems or 48-volt mild hybrid systems into the conventional vehicle lineup. Those vehicles don't really benefit under [zero-emission vehicle] mandates or really move the needle for international vehicle development plans."
Courts are expected to block implementation of the Safer Affordable Fuel Efficient standards until they rule on its legality, forcing automakers to decide whether to comply with existing regulations, focus on meeting the more stringent California standards that apply in a dozen other states and sell less-fuel efficient vehicles elsewhere, or avoid the low-emission states.
Indeed, automakers aren't enamored with last year's NHTSA/EPA proposal to freeze tailpipe emission standards, even though they originally petitioned the White House to provide more leeway in meeting the aggressive Obama-era standards.
The Obama rules were designed to nearly double fleetwide fuel economy to about 47 mpg by requiring year-over-year efficiency gains of about 5 percent. Instead, industry officials say they prefer to maintain gradual fuel economy improvements for the 2022 to 2025 model years.