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The Trump administration’s plan to weaken U.S. fuel economy rules, claiming it will make new cars about $1,000 cheaper for consumers – presumably because automakers can use less sophisticated powertrains – ignores a simple fact: fuel-efficient hybrids, plug-in hybrids and electric vehicles cost a lot less to operate. It also won’t slow emissions of carbon dioxide from the transportation sector, the single biggest source of U.S. greenhouse emissions.
Certainly, the move benefits U.S.-based automakers that specialize in big, fuel-thirsty pickups and SUVs that are among the market’s top sellers and make those companies the most money. But it promises to widen the gap between the U.S. auto market and the rest of the world, which is rapidly switching to electric vehicles, especially those made by Chinese brands. Like Cuba in the Castro era, where classic 1950s land yachts stayed in use long after they’d vanished elsewhere, the lax Trump rules could turn the U.S. into a kind of automotive Jurassic Park, dominated by gargantuan vehicles not found in other markets. Transportation Secretary even advocates turning the clock back to an era before strict MPG regulations. “This rule will actually allow you to bring back the 1970s station wagon — maybe a little wood paneling on the side,” he told CNBC.
(Oddly, Trump also expressed admiration for Japan’s tiny, cute kei cars, claiming he authorized Duffy to let them be built in the U.S. The problem is they don’t comply with U.S. crash safety guidelines.)
“Globally, Europe, China, and other major markets continue to move forward with tighter efficiency rules and accelerated EV adoption,” said Jessica Caldwell, chief analyst for auto researcher Edmunds. “As U.S. standards shift, the domestic market may develop differently than other regions, which could influence the pace at which newer technologies or vehicle options become available to American consumers.”
Slashing the target for new vehicles to an average of only about 34 miles per gallon, versus 50 mpg under the current rules, means General Motors, Ford and Stellantis, which specialize in high-margin light trucks, won’t have to spend quite so much on new technology to make their vehicles more efficient. But they may not be able to sell those products in any other markets, clearing the field for automakers from China, Japan, South Korea and Europe to carve up the rest of the world. And the world is increasingly going electric, with new battery-powered and plug-in vehicles growing faster than demand for the gasoline-fueled variety.
The ultimate impact is tough to predict since U.S. CAFE rules have risen and fallen substantially over the past 20 years, tightening under Democratic administrations and loosening under Republicans. Smart companies will keep betting on efficiency.
The Big Read
L.A. Kicks Coal As It Fires Up The World’s Largest Green Hydrogen Power Plant
Los Angeles has officially stopped using electricity generated from coal and is about to fire up the first large-scale plant making power from both green hydrogen and natural gas as the second-largest U.S. city works to get all of its energy from carbon-free sources by 2035.
“I can officially say that Los Angeles is no longer powered by coal-fueled energy,” Mayor Karen Bass said at a briefing on Thursday, joined by the head of LADWP, the country’s biggest municipal utility, and other officials. “Last week, the Intermountain Power Project in Utah delivered the last coal-fueled energy to our city.”
Starting in the second quarter of 2026, that same facility in Delta, Utah, will instead send electricity to Los Angeles generated from turbines powered by combusting a blend of natural gas and hydrogen. Initially, the goal is to run a mix of 70% gas and 30% hydrogen. But over time, the city-owned utility plans to transition to 100% hydrogen, made from water and renewable power on site and stored in a vast underground salt cavern adjacent to the plant, said David Hanson, who manages power projects for the Los Angeles Department of Water and Power.
“We’ve used the Intermountain Power Project since the 1980s. It’s built on top of a salt cavern. They knew it all along, but no one really cared,” Hanson told Forbes. The utility’s partners in the project are already making hydrogen and storing it in the cavern, which Hanson said is about the size of the Empire State Building. “It makes an excellent, leak-proof storage place for hydrogen.”
Read more here
Hot Topic
Los Angeles Times via Getty Images
Mitch Lee, CEO and cofounder of Arc, on the benefits of battery-powered boats
Arc is an early mover in the space and has been in commercial production for a couple years. How is your lineup is evolving?
We make electric boats, but more specifically we make electric powertrains for boats. We started on the consumer side with kind of a Tesla Roadster-esque vehicle called the Arc One. That helped us develop a lot of the core technology. We got that to market within two years and then took that same technology and repackaged it, iterated on it, improved it, and packaged it into a wake sport boat, which we’re now scaling production of. That’s what most of our company attention is focused on. But that same technology can also be repackaged for other parts of the consumer segment and can scale up to the commercial segment.
You’ve also got some electric tugs in the Port of Los Angeles?
Yes. I like to say that electric boats make even more sense than electric cars.
Electric cars make a lot of sense. Electric boats make even more sense because gas boats are notoriously loud, they’re unreliable, they’re noxious. The best days of a boat owner’s life are the day you buy it and the day you sell it. Like they say, the best boat is a friend’s boat. Owning a gas boat is a huge pain. It’s kind of like a gas lawnmower or a gasoline blower. Going electric has all these benefits, all these advantages. The challenge is actually executing on that, getting the cost down low enough so that it’s competitive with gas boats.
What we’ve done is, thanks to all the R&D flowing into the automotive industry, we’ve been able to tap into those supply chains, tap into that technology and very rapidly bring that technology to the marine industry to a new application that makes even more sense and apply it pretty rapidly across these things. Wwhat we’re doing is taking that same automotive technology and scaling it up the power curve that brings in commercial applications. We are electrifying tugboats, workboats in harbors that need thousands of horsepower, that operate at a much higher scale than things you’ve see in automotive.
In the case of a boat, since you’re churning in water, you’re getting more resistance than drive a road. So how efficient is it to operate an electric boat versus using that same battery back for an EV?
Take the Arc Sport. It’s an electric wake sport boat designed for lakes and rivers all across the U.S. and Canada. It has a 230-kilowatt-hour battery pack in it. That’s about three times the size of an electric sedan. So you’re storing a lot more energy on the boat than you would in a car. That’s one of the challenges you need to solve in order to adapt this technology. Boats consume a lot of power or a lot of energy. They draw a lot of power. And so you need bigger battery packs, bigger sources of energy onboard.
EV makers talk about how much owners save on fuel. If you compare the cost of electricity for using an Arc boat versus one powered by gasoline, do you come out ahead?
If you think about it from a complete ownership perspective, what you care about is how much money am I spending to acquire the boat and then run it over time. In acquiring boat, we are directly competitive with other premium wake sport boats. You pay the same sort of price for one of our boats as you would for combustion boat. Then over time you’re paying less for electricity compared to marina gas prices. Not just gas prices at your local Shell station or something. At the marina it’s a premium because of a captured market. You’re paying $8 or $9 a gallon to fill a massive tank – 60 to 80 gallon gas tanks. And then you need to winterize it. Maintenance is a huge headache. You’re having to put a lot of dollars every year to just kind of keep it online.
So it pencils out that the Arc boat saves you money?
Oh yes.
What Else We’re Reading
The green economy is on track to surpass $7 trillion by 2030 (World Economic Forum)
In a Colorado town built on coal, some families are moving on, even as Trump tries to boost the industry (Associated Press)
EV sales are way down. Here’s why that might not be a big deal (Grist)
Climate change is reshaping Minnesota winters (MPR News)
Homeowners sue oil companies as climate damage drives up insurance rates (Inside Climate News)
Nature retracts flawed study predicting catastrophic climate change costs (New York Times)
Fired EPA employees file a First Amendment lawsuit against Administrator Lee Zeldin (Reuters)
More From Forbes
Source: https://www.forbes.com/sites/current-climate/2025/12/08/weak-fuel-rules-put-us-on-the-road-to-an-automotive-jurassic-park/
