Pros and Cons of Proposed Fuel Economy Standards

 

That's not a very exciting headline, perhaps.  But the Trump administration's proposed changes to the so-called Corporate Average Fuel Economy (CAFE) rules have already drawn criticism from many quarters.  The Environmental Defense Fund, for example, claims in a headline that the changes will "cost Americans more for gas, weaken national security, and increase pollution."  If it's so bad, why is the administration doing it? 

 

At the news conference announcing the proposal, Trump was surrounded by representatives of several domestic automakers, who favor the move.  It is actually a further step in a series of actions that Trump has taken to step back from the Biden administration's CAFE standards.

 

Under the previous administration, each automaker had to ensure that the average "fleet" economy (all their current model-year production, basically) measured in miles per gallon, had to increase by 2% per year.  (Electric vehicles are assigned an equivalent value of fuel economy on the order of 140 MPG.)  Companies not meeting the standards pay fines or purchase credits from firms who exceed them. 

 

Already, the Trump administration has ceased levying the associated fines under the spending bill recently passed by Congress.  They are now proposing to lower the 2% figure to 0.5%, and roll back the "baseline" from which the percentages are calculated to 2022. 

 

Let's compare two cases:  the former policy with fines and the 2% rate versus the proposed policy.  And let's see how various constituencies are affected by the two cases.

 

In the former Biden-administration case, automakers faced the fact that in less than 10 years, the CAFE standards would require raising their average fuel economy by 20%.  Any time an engineering system has some of its performance mandated by law, engineers eventually run up against another law:  physical law.  While modern automobiles differ in thousands of ways from the typical 1955 car—computer-controlled engines, greater use of plastic for reduced weight, etc.—there is still only so much energy in a gallon of gasoline.  And beyond a certain point, the accessible design space shrinks as the required fuel economy rises.  What the old CAFE standards were doing in practice was to compel the auto industry to move toward smaller, lighter cars and more electric vehicles.

 

Yes, that would save people money in fuel costs, and make the U. S. more energy-independent, and reduce our carbon footprint.  But it also makes cars somewhat more expensive, at least at first, and gradually would eliminate certain larger sizes that consumers might want to buy.  So for automakers, the old rules meant compulsory redesigns against fundamental constraints that might eventually eliminate whole classes of vehicles.  For consumers, they meant more limited choices of somewhat more expensive cars, although ones that would be slightly cheaper to run.  And for the environment, it meant slower increases in carbon and other emissions, which are good things. 

 

The proposed reduction in CAFE increases to 0.5% means that the time to get to 20% higher than at present goes from 10 years to 36 years.  And in any case, there are no longer fines for violating the standards, so they are essentially an aspirational goal with no teeth in them.  Under the proposed rules, automakers will no longer be obliged to make cars steadily more fuel-efficient unless consumers ask for that.  Consumers will have a wider choice of cars that won't be more expensive simply because of the CAFE standards.  And while presumably we will have more carbon emissions than if the old standards were retained, unexpected advances in electric-vehicle technology may change this picture.

 

For example, in the December issue of Physics Today, the umbrella publication of the American Institute of Physics, researchers describe their work on solid-state lithium batteries that could vastly out-perform current lithium-ion batteries.  One radical improvement they hope to make is to replace the current graphite anodes, which can absorb only one lithium ion for every six carbon atoms, with solid-lithium ones, which raises the charge capacity of the anode by a factor of ten.  There are problems with solid-state battery technology, but if they are overcome, it might be possible to manufacture electric vehicles that are both cheaper to buy than gasoline-powered ones and travel farther on a charge. 

 

And if consumers are presented with such a choice, it's quite likely that the internal-combustion-engine-powered vehicles would be relegated to specialist uses in construction, etc., leaving most of the field to electric vehicles.  That would come about not because of any government mandate, but because competitive forces in the marketplace produced innovations that consumers genuinely want, and have the byproduct of increasing CAFE mileage and reducing pollution.

 

Obviously, there's no guarantee that solid-state batteries or any other innovation will ever make all-electric vehicles outperform gas-guzzlers in all significant ways:  first cost, performance (including range), and per-mile costs, including power and maintenance.  But it could happen, just as we saw a huge reduction in carbon emissions from power plants when coal was replaced by cheaper abundant natural gas, due not mainly to government mandates but to the privately-funded development of fracking technology. 

 

You can't count on these serendipitous things happening.  But it's equally short-sighted to think that the only good things that go on in a market are government-mandated changes. 

 

The CAFE changes proposed by the Trump administration are still open to comments before they are implemented.  I'm not holding my breath that the current regime will take negative comments into consideration, but it might happen.  Perhaps what is most harmful in this whole situation is the every-four-year policy shifts that manufacturers have been trying to deal with, as Obama was replaced by Trump, who was replaced by Biden, who was replaced by Trump again.  But a small-r republican form of government, as messy as it is, is better than being dictated to by a small group of powerful individuals with no term limits, which is how China is governed.  And for now, it looks like we may be reverting to more of a free-market model in the auto industry.  Consumers and manufacturers should enjoy it while they can, because it may not last. 

 

Sources:  I referred to an NPR report on the Trump administration proposed CAFE-standard changes at https://www.npr.org/2025/12/03/nx-s1-5630389/trump-administration-rolls-back-fuel-economy-standards.  I also referred to a webpage of the Environmental Defense Fund at https://www.edf.org/media/trump-administration-announces-plan-weaken-fuel-economy-standards-cars-and-trucks.  The Physics Today article "Solid-State Batteries:  Hype, Hope, and Hurdles" by S. Muy, K. Hatzell, S. Meng, and Y. Shao-Horn appeared on pp. 40-46 of the December 2025 issue.

Consumer Reports Says Electric Cars Have More Problems

 

In a comprehensive survey covering vehicle model years 2021 through 2023, the publication Consumer Reports found that electric cars, SUVs, and pickups had among the worst reliability ratings compared to either all-internal-combustion-powered vehicles or IC-powered hybrids (not plug-in hybrids, which were also problem-prone). 

 

Results varied by brand.  Tesla, the largest seller of all-electric vehicles, rose in the reliability rankings from 19th out of 30 automakers in last year's survey to 14th out of 30 in the latest study.  This reflects an overall tendency that is probably the main cause of reliability problems with electric vehicles (EVs):  inexperience.

 

The first time you do anything, you're not likely to do it perfectly.  Young people sometimes don't understand this basic principle of life, and it leads to unfortunate consequences.  My mother once sent me to take tennis lessons when I was about ten.  When I discovered I couldn't serve like a pro right off the bat (or the racket), I promptly lost all interest and closed myself off to a lifetime of tennis enjoyment. 

 

The same thing that is true of individuals learning how to do new things is true of automakers learning how to make EVs.  An Associated Press article on the Consumer Reports survey quotes Jake Fisher, their senior director of auto testing, as saying the situation is mainly "growing pains."  No matter how detailed and accurate computer models and laboratory prototypes are, a manufacturer can't simulate the myriad of unlikely situations that will arise when a product is made in units of thousands and sent out to the great unwashed public, who will do a lot of crazy durn things that the maker could never think of. 

 

This sort of thing has been going on with internal-combustion (IC) cars since before 1900, and the automakers are supremely experienced with what can go wrong with that technology.  It may be surprising to learn, but the reliability requirements of military-grade technology are nowhere nearly as rigorous and demanding as the requirements for hardware used in the automotive industry.  Jet aircraft are inspected and serviced every few hundred hours.  But Grandma just drives her car until it breaks, and expects that to happen very rarely. 

 

Combine that consumer expectation with a radically new powertrain, control system, and body, which is what EVs represent, and you're going to have problems, even entirely new types of problems.  The issue of autonomous vehicles is formally independent of EVs, but as some of the most advanced autonomous-vehicle systems are found in EVs such as Teslas, the two often go together.  And autonomous driving is only one of the multitude of new features that EVs make either possible at all, or a lot easier to implement.

 

An EV is more of a hardware shell for a software platform than anything else, and reliability standards for software are a different kind of cat compared to automotive reliability expectations.  Software is at fault in many issues involving EVs, although it can increasingly cause problems with IC cars as well.    

 

The hope expressed by many EV makers is that consumers will recognize the higher problem rate as something temporary, and won't allow it to tarnish the overall reputation of the technology.  This depends on the age and psychology of the customer to a great and imponderable degree. 

 

Just last night, for instance, I was talking with a friend who bought his first Tesla about five months ago.  If he's had any problems with it, he didn't mention them.  I asked about charging times, and he said it was no problem.  He can charge his Tesla at his house overnight, and he knows where there are supercharging stations that will do it in only 30 minutes.

 

His attitude reminds me of a scene in the Woody Allen movie "Annie Hall."  In a split-screen scene, Alvy Singer's therapist asks him, "How often do you sleep together?"  Singer replies forlornly, "Hardly ever.  Maybe three times a week."  In the other half of the screen, his partner Annie Hall gets asked the same question by her therapist, and Annie says with annoyance, "Constantly.  I'd say three times a week."

 

My friend, a power engineer and Tesla enthusiast, sees charging an EV in thirty minutes as wonderful, hardly any time at all.  Someone like me, who is a dyed-in-the-wool IC traditionalist, can't help compare that half hour to the five minutes I usually spend at the gas pump, and the Tesla suffers by comparison.

 

The true-blue EV proponents will undoubtedly overlook or tolerate minor issues with their vehicles and rightly regard them as temporary stumbling blocks that will grow less frequent as the makers learn from their mistakes and improve reliability overall.  The big question is, are there enough such proponents to support the overwhelming market share growth that the automakers hope for, and that the federal government is standing by to enforce with a big stick if it doesn't happen?

 

The same AP article notes that the initially explosive growth of EV sales has slowed by about half in the last year.  It's a genuine open question as to where EV sales will stabilize, if they ever do, with regard to IC sales.  The problem that the automakers face is that as things currently stand, they must comply with the so-called CAFE standards for overall fleet fuel economy, or else pay heavy fees for non-compliance.  And the Biden administration has proposed steep increases in the fleet-mileage numbers that will require a large fraction of all cars on the roadways to be EVs in the coming years. 

 

One can question the propriety of government interference in the auto marketplace.  If left alone, the market will let all the EV enthusiasts satisfy their wants without driving up the overall price of cars or causing artificial scarcities of IC vehicles.  Both of these downsides are likely if the government forces Adam Smith's famed invisible hand to deal only the kinds of cars the government wants, without regard to consumer preferences or needs. 

 

Electric cars will become more reliable, but it's by no means clear if consumers will want enough of them to warrant the current pressures to overthrow the century-long reign of IC cars. 

 

Sources:  The AP article "Consumer Reports:  Electric vehicles less reliable, on average, than conventional cars and trucks" appeared on Nov. 29, 2023 at https://apnews.com/article/electric-vehicles-consumer-reports-gasoline-vehicles-charging-eed9c3b8d86c1f7708b7c6e2d4dbf55e.  I also referred to IMDB for the "Annie Hall" quote at https://www.imdb.com/title/tt0075686/characters/nm0000095, and for CAFE standards at https://www.npr.org/2023/07/28/1190799503/new-fuel-economy-standards-cars-trucks.