by Steve Milloy, E&E Legal Senior Policy Fellow and Junkscience.com Founder
As Appearing on The Daily Caller
Kudos to President Donald Trump for announcing a rollback of the Biden administration’s fuel economy standards. But in addition to selling Trump watches and meme coins, he may just have to start Trump Motors to teach the car industry how to make cars great again (MCGA).
The Biden EPA-issued Corporate Average Fuel Economy (CAFE) standards were not fuel economy standards so much as they were a de facto mandate for electric vehicles (EVs). Here’s a rough description of how the CAFE standards worked.
CAFE standards are not a gas mileage requirement that every car sold has to meet. They are the mileage standard that all cars sold by a manufacturer (aka the “fleet”) have to meet when all sales are averaged out. So even with the Biden standards, a car maker could still sell as many “gas guzzling” SUVs as it wanted, but it would then have to sell many more EVs so that the fleet average would attain the government-determined CAFE standard.
That might not be such a problem if all cars were equally profitable. But they’re not. SUVs are far more profitable than small, fuel efficient cars and electric vehicles. Keeping in mind that the car market is only so large, if a carmaker sells more SUVs, it will also need to sell more small cars and EVs to even up the CAFE scorecard. An alternative for car makers is to buy credits from each other or EV makers like Tesla to atone for not meeting the CAFE standards based on sales alone.
