The Trump administration is continuing to roll back guidelines set by the EPA and it is now targeting fuel efficiency standards. The previous standards required car manufacturers to increase fuel economy and emission standards by 5% annually.
The new standards will only require a 1.5% improvement each year.
According to the administration, these changes are being made to better help car manufacturers while also still protecting our environment. By making these changes, car prices could fall by nearly $1000, and that would help more Americans buy new cars.
However, what happens in reality is that car owners will end up consuming far more on gasoline in their car’s lifespan. Consumers will pay more money and car emissions will soar drastically in the process.
Worse Fuel Efficiency Standards, Who Does It Benefit?
There are two sides to the automobile industry, the car manufacturer and the consumer.
The consumer may be enticed by the price reduction or they may not. Let’s be honest, it’s probably not $1000 that is getting in the way of you and a new car. However, many consumers, especially in the younger generations, have no interest in “gas guzzlers” and this could cripple car sales.
Younger generations are acutely aware of the impact these vehicles have on the environment. In fact, millennials make up 34.9% of electric vehicle sales, with Gen X making up a whopping 39.8%. And these cars cost a lot more than traditional ones.
On the manufacturer, this cuts how much innovation they need to do on every iteration of the vehicle. And they are able to pass this off as a price reduction. This hopefully increases the number of sales they would make.
However, it’s this very concept of passing off a “gas guzzler” to the public that has hurt international sales for these companies.
Countries in the EU have higher standards when it comes to carbon emissions. By doubling down on this policy while the rest of the world shifts towards more fuel-efficient and electric vehicles is a terrible business decision.