There are plenty of people who aren't happy about the presidency of Donald Trump, but for the most part they don't work in the auto industry.
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The auto industry is pushing Trump to revisit emission regulations (GM, F, FCAU)
The collapse of the price of oil over the past few years sent gas costs plummeting.
Donald Trump Mark Fields
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Carmakers see Trump as about to give them exactly what they want: a rollback in stringent fuel-economy and emissions standards and a big corporate tax cut.
Sure, there's also a border tax on the table, but the auto companies seem to have already baked that into their thinking. And all they have to do is invest in existing factories and make some hires in the Midwest, giving Trump headlines.
The first phase of the automakers' lobbying for the case with the Environmental Protection Agency has officially begun. According to Bloomberg's Ryan Beene:
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The Corporate Average Fuel Economy regulatory standards were set to rise to 50 miles a gallon by 2025, and the automakers have been making good progress on meeting that goal.
But they also argue that the EPA's lock-in of the standards after a quick review at the end of 2016, in the waning days of the Obama administration, was unfair. Ford CEO Mark Fields has been particularly vocal about what he has called a "short circuiting" of the agreed-upon process.
Fuel economy and the market
The automakers have a case. The US market is booming as consumers rush to buy pickups and SUVs. The small cars, hybrids, and electric vehicles that would help the car companies get their CAFE compliance to 50 miles a gallon aren't popular in a period of cheap gas.
When the so-called one national standard was negotiated, it looked as if fuel prices might hover at $3 to $4 a gallon for some time; $2 a gallon looked like history. But the collapse of the price of oil over the past few years sent gas costs plummeting — thereby making highly profitable trucks and SUVs a viable proposition for the automaker once again.
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Importantly, the carmakers haven't stopped investing in alternative-fuel technologies, higher-mileage vehicles, or new business models. GM launched the Chevy Bolt electric vehicle last year; it can go 238 miles on a single charge. Fiat Chrysler Automobiles has partnered with Alphabet's Waymo self-driving-car project, and Ford is putting $700 million into factories to build an all-electric SUV and to create a hybrid Mustang.
The automakers' letter to Trump signals the clarity of their intentions. They expect to compel the new president to make good on his promise to curtail regulations. They've given Trump what he wants. Now, they have suggested, it is time for the administration to seal the deal.
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