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Trump cancels and will automakers change?

Trump cancels and will automakers change?


Trump cancels and will automakers change?

Nathan Bomey


Published 3:17 PM EDT Sep 18, 2019

President Donald Trump’s plan to eliminate California’s right to set its own auto emissions standards could spur automakers to make larger vehicles that emit more tailpipe pollution, which contributes to climate change.

But the automakers may not dramatically shift their strategies.

Trump’s plan, which he disclosed Wednesday in a series of tweets, is likely to be delayed in a federal court battle with California. Under a federal waiver, California has historically set stricter emissions standards, but Trump is attempting to cancel the waiver.

He pledged that the move would create “much less expensive” vehicles and “new, extremely environmentally friendly cars.”

If California’s standards are wiped out, automakers wouldn’t be on the hook to produce as many advanced energy vehicles, which are often made solely for the Californian market to meet the rules there and are typically more expensive than comparable gasoline vehicles. For example, the Hyundai Nexo and Toyota Mirai hydrogen fuel cell vehicles are available only in California, according to car-buying advice site Edmunds.

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Those vehicles are currently purchased in small quantities and can be very hard to find at dealerships.

With California’s standards off the books, automakers likely could invest more heavily in larger, gasoline-powered vehicles like SUVs and pickups. Those models are typically more expensive than sedans.

But the car companies would not be able to abandon small cars, fuel-efficient vehicles or alternative energy cars altogether. Most automakers sell vehicles in foreign markets. And in regions like China and Europe, regulators are raising emissions standards to require investments in zero-emission electric vehicles. GM, for example, sells more vehicles in China than it sells in the U.S.

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Michelle Krebs, executive analyst at car-buying site Autotrader, said she doesn’t anticipate any “drastic change” in strategies among the car companies.

“The automakers know where the world is going in terms of low-emissions, high-fuel-economy vehicles, and this is a long-lead business,” Krebs said. “They’re working on cars today that will come out in 2023 or so. So they’re not going to just suddenly change their approach.”

GM, Volkswagen, Toyota and Ford are among the auto companies that have recently announced plans to invest heavily in electric vehicles. Those investments are likely to continue regardless of the U.S. plans, Krebs said.

What’s more, automakers need to plan for the possibility of a shift in the political winds.

“They know this administration won’t be in power forever,” Krebs said. “Things could change and they can’t be caught flat-footed if it does shift back.”

Customer preferences could change, too.

“Ultimately, we believe consumers, local/city governments and tech-sponsored megafleets will be the deciding factor that drives an inflection in EV adoption and CO2 reduction,” Morgan Stanley auto analyst Adam Jonas wrote last week in a research note.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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