Automakers committed to vehicle fuel economy

Associated Press

DEARBORN, Mich.

Just because President Trump may weaken U.S. fuel-economy requirements, don’t expect gas guzzlers like the giant 13 mpg Hummer H1 to make a comeback.

Executives from automakers and suppliers gathered at a conference outside of Detroit on Thursday said looser fuel-economy standards might allow for sales of more trucks in areas where they’re popular. But otherwise, the pursuit of fuel-efficiency technologies will proceed unabated.

“We’re all global companies. We have to design our vehicles to be fuel efficient not only in the U.S., but in Europe and Asia,” said John Juriga, director of powertrain at the Hyundai-Kia technical center near Ann Arbor, Mich.

Automakers lobbied Trump hard to get the government to reopen a “midterm review” of the standards for 2022-2025. They say the EPA under Obama rushed out the review just seven days before Trump took office, reneging on promises to get industry input. The agency also didn’t place enough weight on the pronounced consumer shift to SUVs and trucks, the automakers claim.

The EPA decided the standards are flexible enough to account for the market shift, and automakers have the technology to meet them. The agency calculated that higher standards would raise vehicle costs by $875, but that would be offset by $1,620 in savings at the gas pump.

Given Trump’s promises to auto CEOs about easing regulations, it’s likely the requirements will be weakened when the new review is finished by April of next year.

WHAT WILL CHANGE

Truck and SUV sales likely will keep rising. Auto companies don’t expect a major cut in the 36 mpg requirement. But they’re hoping for standards that are flexible enough for them to sell more trucks and SUVs without penalties. Those high-profit, bigger vehicles made up more than 60 percent of new vehicle sales last year, up from less than 50 percent five years ago.

Lower mileage requirements will let the industry sell more trucks and SUVs in areas like the Southwest, where they are popular. Profits from those sales will help pay for low-margin electric and other efficient cars sold on the West Coast, says Sam Abuelsamid, a senior analyst for the market research firm Navigant. If the standards remain the same and gas prices stay low, the industry contends it would lose money trying to sell efficient cars to people who don’t want them.

WHAT WON’T CHANGE

The push by automakers and parts companies is to make more efficient vehicles. Paul Nahra, director of the Advanced Engine Group for parts maker BorgWarner, says his company sells to automakers worldwide including regions with stricter gas-mileage standards. Work continues on downsizing engines, shedding weight and on new engine technology that makes a gas engine perform like a more efficient diesel.