President Trump yesterday, in a widely expected move, said his administration will drop tougher emissions standards enacted by his predecessor. The move is unlikely to have much impact on the cars Americans can buy, as former President Biden’s strict rules were in place for a short time, and the automotive industry can’t change product plans quickly.
“We’re going to go back, probably, to a 2020 standard,” Trump said to a gaggle of reporters in the Oval Office as he signed several executive orders yesterday.
Tougher Standards Only in Place Since Last June
The Biden administration toughened tailpipe emissions standards last June. Those stricter rules, currently in place, would have affected cars built between 2027 and 2032.
On the campaign trail, Trump often referred to the rules as an “EV mandate,” but they would not have required automakers to build electric vehicles (EVs) or Americans to buy them. Instead, they restricted the pollutants cars could emit.
Most automakers planned to meet them by building more EVs, which they had already planned in order to keep up with global competition.
Looser Rules Could Mean Short-Term Changes
The administration, in late January, also promised to loosen fuel economy requirements. Taken together, softer fuel economy and emissions rules could let automakers sell more gasoline-powered cars and fewer hybrids and EVs. But they are unlikely to make major changes to their lineups in response.
Trump is serving his final term in office, which means any new rules are likely to be replaced again in less than four years. Automakers plan their future products on longer timelines.
They must also compete on a global stage. Automakers sell most cars in many countries and must build them to comply with the strictest standards they’ll encounter. When one country softens its rules, that rarely allows them to change a car they sell in many countries. Increasingly, American automakers compete with the rapidly growing Chinese automotive sector, which is quickly producing advanced EV designs, stealing sales from American cars worldwide.
We expect a few short-term changes that are easy for automakers to make.
For instance, Stellantis (parent company of Dodge, Jeep, Ram, and others) appears almost certain to bring back its famed Hemi V8 engine line. The company had been winding down Hemi production but had built the engine in huge numbers so recently that suppliers still have contracts and tooling for the parts. Bringing back the Hemi for a few more years to use in existing cars is a low-effort investment.
Designing new cars or engines is a more significant, longer-term challenge. Automakers are unlikely to trust that the looser rules will last long enough to make that effort worthwhile.