Not All Auto Execs Want Trump To Roll Back EPA Fuel Standards

Car suppliers’ investments in fuel efficiency could be threatened under weakened fuel economy rules.

byLiane Yvkoff|
Not All Auto Execs Want Trump To Roll Back EPA Fuel Standards

Executives from 18 automotive manufacturers recently signed a letter angling for President Donald Trump to ease the requirement of meeting a Corporate Average Fuel Economy (CAFE) of 54.5 miles per gallon goal by 2025. However, not every company in the supply chain feels the same way. James Verrier, president and CEO of Borg Warner said during Tuesday's meeting on mobility issues hosted by the Detroit Economic Club in Detroit that he doesn't want Trump to roll back progress on increased fuel efficiency that the industry has achieved.

“Do not slow down the pace on CAFE standards,” he said. “We’ve come a long way as an industry and we need to keep going forward. Don’t go backwards and don’t slow down.”

Automotive suppliers invested in technology to improve engine efficiency

He's referring to the progress that engineers and automotive equipment companies such as Borg Warner have made to help auto makers meet aggressive fuel targets that cut tailpipe emissions and save consumers gas money.

Acquiescing to automaker's requests for another review and easement of EPA fuel economy standards may make moot all the costly research and investments suppliers have made to deliver the technologies to improve fuel economy. The energy department's office of Energy Efficiency and Renewable Energy's research shows that efficiency of internal combustion engines can be improved by more than up to 50 percent compared to today's technology, and some vehicle simulation models estimate potential improvements of up to 75 percent. 

Companies such as Borg Warner, whose self-described mission is to "Deliver Innovative Powertrain Solutions that Improve Fuel Economy, Emissions & Performance" help make those goals achievable. They manufacturer engine and drivetrain parts, such as the turbochargers and advanced exhaust gas recirculation valves, to produce more power from small engines. However, adding these technologies increase vehicle price. A roll back of the EPA emissions might make some vehicles less expensive, but those savings would ultimately be erased at the fuel pump, and end up costing consumers more money in the long run. 

Auto companies need policy details to plan

Attendees at the company explained that regardless of what strategy the administration intends to take, they need time to prepare and adjust to policies that could impact their production and research cycles. The administration has been signaling that it intends to pursue an "America First" policy that could impose tariffs on imported vehicles, which could disrupt sales, and thusly, the supply chain of automotive parts. The absence of details leaves companies unable to plan and focus resources.

“What we have right now is a bunch of vague comments, vague policies, a tax program where we’re not really sure how it’s going to impact us.” said Matt Simoncini, president and CEO of Lear Corp.

However, if or when they will get clarity is anybody's guess. The president has a history of making promises, but so far hasn't made good on delivering details about how to fulfill them.