Friday, 31 January 2025

Trump’s DOT head gave a political gut punch to the auto industry

by BD Banks

In an interview in the last days of the Biden administration, now-former U.S. Department of Transportation (DOT) secretary Pete Buttigieg expressed concern over the fate of one of his biggest focuses during his tenure: electric vehicle adoption.

One of the policies that President Trump promised his supporters was the scrapping of related transportation and environmental policy measures, which he coyly labeled the “Biden EV Mandate.” By swiftly dragging a Sharpie onto a paper inside a Presidential folio shortly after taking the oath of office, he cemented a promise that is set to undo a whole administration’s worth of work.

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“I’m not that worried about having an EV mandate since there isn’t one, but I am concerned that he might take steps to make EVs more expensive for American consumers. And that would be unfortunate,” the Former DOT secretary told The Verge.

“The work we’ve done to make EVs more affordable is part of why there are more and more jobs being created in the industrial Midwest, in places like where I grew up that are seeing a level of auto industry growth that we haven’t had since the ’60s,” he continued. 

“And I think that needs to be kept up, especially because there is clearly a ferocious innovation competition with China. They’re using all the tools in their tool kit to try to edge us out, and we can’t let that happen.”

Sean Duffy, former Republican Representative from Wisconsin and US secretary of the transportation nominee for US President-elect Donald Trump, during a Senate Commerce, Science, and Transportation Committee confirmation hearing in Washington, DC, US, on Wednesday, Jan. 15, 2025. 

Bloomberg/Getty Images

The DOT Secretary wasted no time in getting to work

Like the President he works under, the newly minted DOT Secretary Sean Duffy got right to work to make do on the administration’s promises. 

In a memo dated January 28—the same day he took his oath of office—the former “The Real World: Boston” star ordered the National Highway Traffic Safety Administration (NHTSA) to reevaluate Biden-era rules designed to make cars more fuel-efficient. 

Implemented in June 2024, the NHTSA under the Biden Administration set up the Corporate Average Fuel Economy (CAFE) standards. Under these rules, automakers were tasked with increasing the fleetwide average fuel economy of passenger cars by 2% per year between model years 2027-2031, while the fuel economy of light trucks will need to be improved by 2% per year between model years 2029-2031. 

These regulations were intended to cut greenhouse gases, help mitigate climate change, and encourage drivers to buy more fuel-efficient cars. The DOT aimed for the average car to achieve a fuel economy of about 50.4 miles per gallon by the 2031 model year.

More Business of EVs:

However, Duffy and the current administration contrast. 

Using two of Trump’s executive orders (EO 14148 “Initial Rescissions of Harmful Executive Orders and Actions” and EO 14154 “Unleashing American Energy”) and an appeal to the average consumer as his foil, the new DOT Secretary argued that not only are the lofty, Biden-era fuel economy standards impossible for automakers to meet, but they would also force drivers out of internal combustion engined (ICE) cars they want to drive and afford. 

“Artificially high fuel economy standards designed to meet non-statutory policy goals, […] impose large costs that render many new vehicle models unaffordable for the average American family and small business owner,” Duffy said. “They also put coercive pressure on automakers to phase out of production various models of popular ICE vehicles and reengineer their fleets in a way that reduces dramatically the power and durability of the ICE models they are able to offer, thereby fundamentally distorting the market and destroying consumer choice at the dealership.”

Additionally, he argued that such regulations would “also inevitably kill thousands of jobs for America’s autoworkers” and relegate Americans “to driving older and older used vehicles,” which he sees as “an unacceptable outcome that is contrary to [the] NHTSA’s mission of advancing highway traffic safety.” 

Duffy has a history of cynicism toward EVs, climate change

Before his new stint as the head of the DOT, Sean Duffy wore a variety of hats both in and out of the political sphere.

Previously, Duffy represented Wisconsin’s 7th district in the House of Representatives and also served as District Attorney for Ashland County in his native Wisconsin. Most notably, he is known for his television career. In 1997, he appeared on MTV’s The Real World: Boston and one of its spin-off shows. He was also an ESPN color commentator. 

However, his tenure on Fox has been credited with his appointment to the Trump administration. In January 2023, he and Dagen McDowell starred as co-hosts of Fox Business’s The Bottom Line, where he wasn’t shy to air his political opinions, including on EVs. 

Previously, Duffy labeled Biden’s EV-heavy climate plans as “an agenda of control.” Additionally, in an on-air segment in 2023, he referred to Biden-era rules regarding EV adoption as “the dumbest policy,” adding, “If Americans wanted electric vehicles—$60,000 a pop—they’d buy electric vehicles.” 

U.S. Sen. Bernie Moreno believes EVs are part of a bleak picture for the auto industry; Moreno spent many years working in “retail automotive” before being elected to the Senate. 

Kayla Bartkowski/Getty Images

Duffy assured key Senator about the “EV mandate” during confirmation hearing

During his confirmation hearing on January 15, Duffy appeared more demure and promised the Senate Committee on Commerce, Science, and Transportation that he would usher in “a golden age of travel.” However, in his grilling by the Senate committee, Duffy showed some conviction when the topic of electric vehicles and EVs was brought up, a sly departure from his predecessor. 

Notably, he agreed with Senator Deb Fischer (R-NE) on the topic of EV drivers paying their “fair share” of highway taxes (EVs do not run on gas; the Highway Trust Fund is funded by the gas tax) and also on the topic of EVs and vehicle choice, which was brought up by Senator Bernie Moreno (R-OH); a former auto dealer.

In his appeal to Duffy, he noted that “the automobile industry is near and dear to [his] heart” and that he spent his “entire adult life in retail automotive” before painting the existence of EVs as part of a bleak picture of the auto industry’s crisis.

“[…] it seems like in the last few years there’s been this idea that car companies, instead of listening to their dealers and their customers to dictate where they should go, where innovation should lead, is that somehow Washington D.C inserted itself in between the relationship between manufacturers and consumers. There’s no better example than the weighing of one particular powertrain versus another as to what should be incentivized or produced and made,” Moreno said. 

“[…] as a result, instead of investing in safety technologies and innovation that consumers want, they’re losing tens of billions of dollars to make cars that people just do not want to buy. So I would love to work with you to find a way to make America’s automakers thrive again in this country by allowing them and freeing them to make the cars the consumers truly want and are truly demanding.”

In response, Duffy said that he shared the same feeling, stating that “we should be able to buy the cars that we want.” 

“I think there’s room in this space for electric vehicles and gas-powered vehicles, and it might depend on your priorities, the places that you live, the temperatures of where you live. But I want to see a robust marketplace.”

Related: Sorry President Trump, most Americans want fuel-efficient cars

CR: Auto customers are on board with “EV Mandates” 

Though Duffy argued that the Biden-era CAFE standards were used to “force the electrification of the Nation’s auto fleets,” public sentiment shows that most Americans are on board with legal initiatives and government policies that help get them into more fuel-efficient cars.

According to a recent study conducted by Consumer Reports, 96% of American drivers say that fuel economy is a somewhat important factor when getting their next car, and 84% insisted that automakers must improve fuel efficiency across all vehicle types.

Additionally, 76% of the surveyed drivers said that they expect newer cars to be more fuel-efficient than their older counterparts, and 74% felt that automakers are responsible for improving the gas mileage of the vehicles they sell to consumers.

CR researchers also found that the fuel economy and emissions policies framed as “EV mandates” have helped drivers save money over the years. They found that car owners may be in for $6,000 in fuel savings over the next five years under Biden-era policies. 

However, if the CAFE Program rules were to disappear, the average American driver would have to pay an average of at least $8,000 more to fill up their cars by the end of the decade.

“The incoming administration has a choice to make. Do they stay the course, ensuring that automakers continue to innovate and deliver vehicles that are cheaper to fuel? Or will they shift into reverse, costing consumers more at the pump?” Consumer Reports senior transportation and energy policy analyst Chris Harto said. 

“Consumers have spoken clearly—they want stronger standards that will save them money.”

Related: Veteran fund manager issues dire S&P 500 warning for 2025

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