Industry group backs efficiency increases, talks electric cars

Source: Maxine Joselow, E&E News reporter • Posted: Thursday, May 10, 2018

A major trade association for automakers opposes the Trump administration’s proposal to freeze fuel efficiency standards.

Mitch Bainwol, CEO of the Alliance of Automobile Manufacturers, told lawmakers Tuesday the group is “in favor of year-over-year” increases.

“We’re hopeful that the slope continues to rise,” Bainwol added during the House Energy and Commerce Subcommittee on Environment hearing.

EPA and the National Highway Traffic Safety Administration are currently hammering out a proposal for revised fuel efficiency rules.

Bainwol’s remarks came in response to a question from Rep. Jerry McNerney (D-Calif.) about a draft proposal that would freeze fuel economy targets at 2020 levels through 2026.

They echoed his written testimony, which stated that the trade association supports “standards that increase year over year that also are consistent with marketplace realities” (E&E News PM, May 7).

The alliance, which represents major automobile manufacturers, including Toyota Motor Corp., Ford Motor Co. and BMW Group, had been a driving force in getting the administration to revisit the clean car rules.

Democrats on the panel noted that freezing the fuel economy targets would put the federal government on track for a head-on collision with California and the dozen states that have adopted its rules.

“We must maintain one national program for fuel economy standards that keeps California at the table,” said Rep. Debbie Dingell, a moderate Democrat who previously worked for the auto industry and whose district in Michigan is home to Ford.

“We can either come together on a negotiated solution that continues upward progress and sets standards through 2030, or we can have a costly legal battle where nobody will win and we cede American leadership in this area to overseas,” Dingell said, adding, “Failure is simply not an option. It hurts too many people.”

Electric vehicles

While yesterday’s hearing was somewhat overshadowed by the fuel efficiency debate, it was nominally focused on the policy implications of the rise of electric vehicles. The market penetration of EVs emerged as a point of concern.

While U.S. automakers introduced 980 percent more EV models from 2011 to 2017, fully electric vehicles and plug-in hybrids still represent only 1.2 percent of the marketplace, Bainwol said.

“We’re offering many more models,” he said. “But consumers literally are not buying it just yet.”

That’s a challenge for automakers because electrification is key to complying with two major mandates: corporate average fuel economy standards and zero-emission credits, he added.

Genevieve Cullen, president of the Electric Drive Transportation Association, said the metrics can be read a different way to show that more consumers are gravitating toward EVs as the cost comes down.

“A brief look at the numbers — the same numbers that Mitch uses, but from a slightly different lens — shows a growing market for electric drive,” Cullen said.

Subcommittee ranking member Paul Tonko (D-N.Y.) said one of the greatest barriers to EV adoption is a lack of charging infrastructure.

Bob Dinneen, president and CEO of the Renewable Fuels Association, said greater deployment of EVs could go hand in hand with advances in internal combustion engines that use higher blends of ethanol.

“The ethanol industry recognizes a broad array of electric vehicle technologies are on the horizon, and we want them to succeed,” Dinneen said.

“We do not see electric vehicles as a threat. Rather, we see electric vehicles as fellow travelers on our road toward energy independence and decarbonization.”

Republicans on the panel also expressed concern about whether EV drivers would contribute to the Highway Trust Fund.

“How do we then incorporate electric vehicles into the funding of our roads and bridges system?” said Chairman John Shimkus (R-Ill.). “What is the secret sauce that allows us to help maintain those in a Highway Trust Fund?”

Rep. Joe Barton (R-Texas) echoed those sentiments, saying, “We fund a big chunk of our new highway construction and maintenance through the Highway Trust Fund, which is funded by a cents-per-gallon federal highway gasoline tax. And most states tack on a state tax. Well, if you’re an electric vehicle, you can’t charge per gallon.”