Car companies are facing major disruptions to their business models, because of new transportation entrants like Uber, climate change and the rise of electric vehicles, and changing customer tastes. The uncertainty caused by regulatory tumult threatens to set them back.
A group of 17 leading automakers from around the world wrote to President Donald Trump on Thursday asking him to abandon his plans to scrap the emissions standards. Instead, it wants the administration to restart talks on a compromise with a group of 13 states — led by California — that are committed to tougher standards.
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The automakers had initially supported the tougher standards, which were first announced in 2011, but the companies raised questions before President Barack Obama left office. The central issue is: Are the rules still practical given relatively low gasoline prices and car buyers’ preference for SUVs? Despite the industry objections at that time, the Obama administration confirmed the standards just before leaving office.
So the automakers asked the Trump administration to reconsider implementing the tougher rules. And the incoming administration quickly agreed to do so.
But the automakers are spending billions to develop electric vehicles and more efficient gasoline cars. They fear the regulatory uncertainty that could come from years of litigation, especially if it resulted in two different sets of emission rules for different parts of the country.
Source: 17 of the world’s leading automakers to Trump: Drop emissions plan
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