Trump OKs Domestic Production of Ultra-Compact Cars


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- U.S. President Donald Trump on Wednesday (12/3) 
authorized domestic production of low-cost ultra-compact cars as part of a 
change in fuel economy rules.

   The announcement came as the White House rescinded fuel efficiency standards 
set by the Biden administration yesterday, a decision that the Trump 
administration says will lower technology costs for automakers, potentially 
translating into cheaper prices for consumers.

   "I believe our auto industry will be bigger than before," Trump said. He 
also predicted a "tremendous market" in the U.S. for ultra-compact cars, 
similar to the types he had seen in Asia.

   While there isn't any outright restriction on the manufacture of 
ultra-compact cars in the U.S., stringent crash tests and other safety 
requirements make it difficult and expensive for automakers to certify such 
tiny vehicles. Trump did not announce on Wednesday any particular waiver and 
incentive for ultra-compact cars.

   The Biden-era fuel efficiency standards rescinded by the current 
administration involves a mandate for automakers to achieve about 50 miles per 
gallon on new vehicles from 2031 onwards. Under revised rules issued Wednesday, 
automakers only have to achieve an average of 34.5 miles per gallon for cars 
and light trucks in model year 2031.

   On the first day of his second presidential term, Trump ordered the 
elimination of subsidies and all other federal measures supporting electric 
vehicles (EVs). The Republican-Congress followed by eliminating civil penalties 
for noncompliance with the earlier rules.

   In a coordinated effort, the administration and Congress have also 
eliminated federal tax credits for EV purchasers and moved to rescind 
California's ability to set its own strict emissions limits.




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