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Ford calls on automakers to support California fuel economy deal

The automaker thinks the deal, which it signed onto last year, could be a solid template for the incoming Biden administration.

Get on board, says Ford.
Jon Wong/Roadshow

Following General Motors' U-turn in supporting the Trump administration's efforts to strike down California's ability to set emissions standards, Ford signaled Monday it wants others to join them both. According to a letter seen by Reuters, the Blue Oval urged other automakers to support the compromise deal that it and a handful of other companies hashed out last year.

Ford declined to comment directly on the letter, but a spokesperson told Roadshow, "From the beginning we've said that our agreement with California is the best path forward for the environment, our customers and the short and long-term health of the auto industry. We believe this agreement should be the foundation for new regulations as the Biden administration considers stronger fuel economy standards in 2021."

If you don't follow regulatory changes to emissions and fuel economy every day, here's the lowdown. The Obama administration put into place Corporate Average Fuel Economy Standards that regulated automakers to increase fuel economy by 5% annually through 2026. It would have left carmakers with an average fleet-wide fuel economy rating of 54 miles per gallon. Instead, the Trump administration slashed the increases to just 1.5% each year, or 40.4 mpg in the same timeframe.

The voluntary California agreement worked out to fuel efficiency increases of 3.7% each year starting in 2022 -- lower than the Obama administration's goal, but far more aggressive than the Trump administration's. It's this framework Ford believes could serve as a blueprint for a single, nationwide regulation.

A rift opened last year, however, after the Trump administration moved to ban California's ability to set its own standards, which automakers have long loathed. Essentially, the companies must play by two sets of rules to meet both federal standards and California's standards, which are more stringent. Other states also follow California's regulations and their number continues to grow. Automakers chose sides in the fight, with major players like Ford, Honda, Volkswagen and BMW siding with California. GM, Toyota and Fiat Chrysler, among others, backed the Trump administration's litigation.

GM pulled support for the outgoing administration and invited its rivals to join it. GM hasn't explicitly thrown its weight behind the deal Ford approves of, but GM CEO Mary Barra cited President-elect Joe Biden's plans for investing in EVs, their production in the US and associated infrastructure for the change of heart. Toyota previously told Roadshow it was "assessing the situation" following GM's announcement.

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