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U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt announced his plans to scrap Obama-era Corporate Average Fuel Economy (CAFE) standards for passenger cars and trucks, which require automobile manufacturers maintain a fleet-wide average of 54.5 miles per gallon (mpg) by 2025. This bold move by Pruitt will result in more affordable vehicles and additional cash in the pockets of families across the country.
Mandates under the previous administration were negotiated when the economy was depressed and retail gas prices approached $4 per gallon. Proponents of tougher fuel economy standards used these circumstances to argue for ever-more fuel-efficient cars. But now, with crude oil priced at about $60 per barrel, the supposed significant savings of owning electric cars have diminished.
Even if gas prices were still elevated, electric cars’ upfront and maintenance costs would consume any savings gained from those cars’ increased fuel efficiency compared to similarly sized gas-fueled vehicles. For example, a new model Nissan Leaf, which is currently the best-selling electric car, has a sticker price about $11,000 higher than a comparable gas-fueled 2018 Mazda 3. The estimated annual fuel cost of the Leaf is $600 compared to $1,300 for the Mazda. It would take at least 15 years in fuel savings to offset the Leaf’s going price. Researchers at the Arthur D. Little (ADL) consulting firm say over a 20-year period EVs are significantly more expensive to own and operate than traditional combustible-engine cars.
Further, car sales data suggest Americans generally prefer SUVs and pickup trucks that offer luxury, space, safety, and style. Fuel efficiency is not an important consideration for a majority of consumers.
In 2017, U.S. vehicle sales totaled 17.2 million. A tiny fraction of those sales (199,826, or 1.2 percent) were EV purchases. Since 2010, only 764,516 electric cars have been sold, and many of those sales only occurred because EVs are accompanied with a generous federal tax credit: up to $7,500 for a purchase of one EV, not including additional state and local incentives.
Income inequality alert! Taxpayers subsidize all EV incentives, which are mainly awarded to those with household incomes above $200,000 per year. Only 10 percent of the subsidies went to households making less than $75,000 per year. As a point of reference, the U.S. median income was $59,039 in 2016.
Even though Americans generally aren’t interested in purchasing high-priced electric vehicles, large car manufacturers have since 2012 been forced to sell “compliance cars” — electric vehicles produced solely to meet a quota as a condition of being able to sell cars in states with a zero-emissions vehicle standard: California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont. Manufacturers lose money on these electric cars because they are produced to meet the demand of politicians and bureaucrats, not to satisfy consumers.
The CEO of Fiat Chrysler Automobiles literally pleaded with customers to avoid purchasing Fiat’s 500e compliant electric car. “I hope you don’t buy it, because every time I sell one it costs me $14,000,” said Sergio Marchionne to an audience. “I’m honest enough to tell you that.”
To make cars more fuel efficient, manufacturers have had to resort to crafting lighter cars that are smaller in size and have less steel content. (Engine and body redesigns can only shave off so much weight.) As a result, additional increases in mpg standards have been linked to there being more occupant fatalities and about 352,000 to 624,000 additional serious injuries. How many more deaths might occur if target levels remain at 54.5 mpg?
Not everyone is pleased with Pruitt’s move to change the Obama administration’s CAFE standards. For decades, California has been setting its own greenhouse gas emissions and fuel-efficiency standards, and California policymakers want to continue imposing a higher standard than most other states. A special carveout in the Clean Air Act allows the Golden State to submit waivers to EPA requesting in-state environmental guidelines that are often tougher than federal standards. Twelve states and the District of Columbia match California’s tougher state standards. California’s waivers have been approved more than 100 times, but the winning streak may end soon; Pruitt is considering rejecting the state’s next waiver in favor of one national standard.
Attorneys general in California and other Democratic-leaning states, as well as environmental groups, are revving up to litigate against Pruitt’s proposed changes. They argue weak emissions restrictions will contribute to climate change and cause air quality to worsen, among other things.
However, recent research could potentially throw a wrench into the plans of Democrats and environmentalists. According to an ADL study, the manufacture of EVs exposes human life, as well as animal and plant life, to higher levels of toxicity and emits more carbon dioxide than traditional combustible-engine vehicles do — a result of using electric battery packs.
Stringent fuel standards and electric cars provide few environmental benefits and impose additional unnecessary costs on consumers. Until technological improvements are made that make, without the use of taxpayer subsidies, low- or zero-emissions vehicles a cost-effective economic choice for consumers, legislators should avoid embracing strict, California-style fuel and emissions standards.
Ending the Clean Power Plan, withdrawing from the Paris climate accord, putting a stop to the use of “secret science,” and now a rollback of CAFE standards — it appears Trump’s EPA has not yet tired of winning.
[Originally Published at The Hill]