In a flash of dramatic irony, Andrew Wheeler, the Administrator of the US Environmental Protection Agency, praised the Trump administration’s Safer Affordable Fuel Efficient (SAFE) Vehicles rule, a rollback of fuel economy standards that would allow automakers to sell more polluting vehicles in the United States.
“Too many reporters fail to mention one very important point: the Obama era CAFÉ standards were not attainable by the auto industry. The truth is, the SAFE rule sets realistic standards, will reduce pollution, and save lives!” Wheeler posted.
Such statements, of course, attracted strong responses. In a call with reporters on Tuesday, California attorney general Xavier Becerra remarked that the EPA Administrator’s Twitter announcement was downright wrong. “(EPA administrator Andrew Wheeler) issued a tweet saying that this new rule would save lives, and reduce pollution, and that it would provide significant benefits to the American economy. In each case, he’s wrong,” Becerra said.
On Tuesday, the National Highway Traffic Safety Administration and the Environmental Protection Agency announced the SAFE standards that will take the place of the Obama-era Corporate Average Fuel Economy (CAFE) rules, which required about 5% annual improvements in fuel efficiency every year from carmakers.
Under the CAFE rules, the EPA noted that automakers would have been required to sell cars and light trucks with an average fuel efficiency of about 54 miles per gallon in 2026 model cars. With the current administration’s SAFE rules, vehicles could simply average about 40 miles per gallon by 2026 to meet the new standards.
In a way, Wheeler’s tweet boiled down to one point. The old CAFE standards were simply unrealistic, and America needs the new SAFE rules to make sure automakers and car buyers win out. Interestingly enough, the EPA official’s post came amidst an ongoing climate crisis and a literal pandemic that involves a virus attacking people’s capability to breathe.
Bad timing and taste aside, the EPA Administrator appears to have conveniently forgotten one particular American carmaker that has had absolutely no problem meeting the “unrealistic” standards of the Obama-era CAFE rules. This carmaker currently stands as the most valuable US-based automaker by market cap, and in recent quarters, it has even turned a profit, highlighting the argument that there is a substantial demand and a solid business model for zero-emissions vehicles.
This carmaker, of course, is Tesla. The company had been producing electric cars since 2008, and it has been mass-producing vehicles since 2012. With the Model 3, Tesla started breaking into the mainstream market, with some car buyers trading in otherwise more affordable vehicles to acquire the electric sedan. A crossover, the Model Y, has begun deliveries ahead of schedule, and if initial impressions from professional reviewers are any indication, there’s a good chance that the all-electric crossover will be a disruptor as well.
With the United States’ SAFE rules, automakers like Ford and GM will likely have less incentive to push electric cars. This may be detrimental to both companies, considering that leaked production plans from both GM and Ford have shown that the veteran automakers are still committed to the internal combustion engine despite their pro-EV rhetoric. This could be a costly move for GM and Ford, since territories outside the United States, such as Europe and China, have committed to electrification.
But amidst all these, there is a silver lining. If veteran automakers like Ford and GM will not step up to the plate and provide good electric cars to meet the demand from buyers, a new breed of EV companies will. Tesla has proven that a well-designed, feature-rich, all-electric car like the Model 3 can dominate their established internal combustion counterparts. There’s a good chance that vehicles like the Cybertruck, or perhaps Rivian’s R1T, could do the same for high-end F-150s and RAM trucks.
In a way, the adjustment of the United States’ emissions standards could prove to be an opportunity for electric car makers. Beyond the United States, after all, authorities are going all-in on electric cars. And for some territories such as Europe and China, there is no more turning back.