Today, Explained - Where we’re going, we still need roads

Episode Date: July 29, 2019

Four of the world’s biggest carmakers have secretly negotiated an emissions deal with California, circumventing the Trump administration. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Everyone loves a good secret. And at the end of last week, we found out about a big one that involved four of the world's biggest car companies and their favorite state. California has cut a deal with some major automakers to get around the Trump administration's plan to roll back emission standards. Ford, Volkswagen, BMW, and Honda have all agreed to increase gas mileage and reduce greenhouse gas emissions. Anna Phillips has been covering the secret for the LA Times. She says this all starts with an ambitious plan. Maybe too ambitious. The rules that we have right now are put in place under President Obama.

The companies here today have endorsed our plan to continue increasing the mileage on their cars and trucks over the next 15 years. We've set an aggressive target and the companies here are stepping up to the plate. By 2025, cars and SUVs, light-duty trucks that are sold in the U.S. have to reach an average fuel efficiency of about 50 miles per gallon. This agreement on fuel standards represents the single most important step we've ever taken as a nation to reduce our dependence on foreign oil. Think about that. And there are ways for car companies to meet those standards by earning credits by selling electric vehicles. How did automakers feel when the Obama administration imposed those higher standards?

They weren't necessarily imposed. Automakers were part of the negotiations when this took place. So was California. What happened is that as time passed, automakers became increasingly frustrated with the standards. The electric vehicle sales weren't taking off as expected. And Americans like to buy big cars. We buy big gas guzzling vehicles. Because only the Ford F-150 with the high strength military grade aluminum alloy body gives you best in class torque. Best in class. Americans were just buying a ton

of SUVs. So they got frustrated. They became concerned these standards were no longer feasible. And in the early days of the Trump administration, they appealed to the president and said, we'd like you to revisit these standards and lower them. As you know, I'm here to announce that those standards that were set, that we are obligated to evaluate, we are determining, I am determining that those standards are inappropriate and should be revised. The problem is they got a lot more than they bargained for. They were not expecting the president and the EPA to come out and say, we're going to freeze the standards in place at 2020 levels and we're not going to have these gradual increases over time. That surprised them. And when they were caught by surprise, they found that they had this political storm on their hands that they hadn't been expecting because they didn't want to appear to the public as though they were against the

idea of fuel efficiency or against the idea of making cleaner cars. So these car companies went to the Trump administration saying these standards are too much, and then they got, what, too much of what they wanted? Exactly. They were essentially asking for what they would probably categorize as a tweak. Yeah. And what they got was an overhaul. And why wouldn't the car companies just want the lowest standards possible? Well, for one, consumers prefer higher fuel efficiency standards. It's also the case that these are global companies. They're not just responding to

demand to the United States. They have to respond to customers in Europe and in Asia, where increasingly stringent standards are being put in place to avert the worst of climate change. So it's not like they can just respond to the standards in the U.S. They have to meet the global market. So even though what the Trump administration is essentially saying is, you know, there are no standards, don't worry about it, that doesn't necessarily make life easier for these major car manufacturers. In some ways, it makes it more complicated for them.

It divides the market in the United States, and it also separates them from where car manufacturers are heading globally. And this is how we get this not-secret-anymore deal the automakers struck with California. What exactly is in it? The California Compromise is essentially a middle way. Its goals for fuel efficiency standards and for greenhouse gas emissions are not as aggressive as what the Obama administration had put in place, but they're not as low as what the Trump administration has proposed. So what they are saying is that instead of having until 2025 to produce cars that meet the 50 miles per gallon

standard, you have until 2026. And we're going to give you some new tools. Some people describe them as loopholes, but some new ways of reaching that standard. So just that one extra year and a bit of help is what they're offering. Yeah, the help is more than a bit. Okay. They're essentially offering to take the credits that car makers can earn by selling electric vehicles and essentially give them more weight. It's almost as though you can accumulate points and then you can apply those points or those credits to the overall standard that you're required to meet. What gives California all of this power to sort of have this side negotiation with the automakers? Is it just the fact that there's a ton of drivers in California, so it's a huge market? That's a small part of it, but a much bigger part is that historically, California has had legal authority that other states haven't had.

Because we have had such extreme problems with air pollution and smog dating back decades, when the Clean Air Act was put in place, California was given special permission to set its own more stringent fuel efficiency standards. And so that's made California unique. And it means that they have a seat at this negotiating table that other states don't have. It's also made them a very direct target of the Trump administration because the administration has sought to take away that authority from California so they would no longer be able to set their own standard. So when does this Trump fuel standard rollback take effect?

It's supposed to be announced sometime this summer. Oh, it hasn't been announced yet. Only that the draft, the sort of initial outline of the plan. Okay. They haven't formally come out and said, here's what we're officially going to do. That could happen in the next couple of months. And once it does, it's not as though this change goes into effect immediately. California has already said, if the Trump administration proposes to freeze these standards in place, we the Trump administration proposes to freeze these standards in place, we're going to take them to court. So they're ready to sue. And there are 13 states in the U.S. that follow California's fuel efficiency standards, and they're prepared to go

to court as well. If and when this rollback does happen, does California have the authority to actually enforce a higher standard than the federal government? This compromise that California has reached with these automakers, it's purely voluntary. There's nothing enforceable in it right now. That could change in the future depending on how they structure this arrangement. them to in releasing this rollback, you're going to see California taking the administration to court. And this is all going to wind up as a fight between lawyers for a very long time. Is the deal that the automakers have made with California kind of like their way of betting on California to win a potential legal fight? That's exactly what they've done. They have allied themselves with California

voluntarily, essentially saying, we're going to ignore what the Trump administration to strike a deal. It seems sort of like a desperate situation. I mean, I think what it tells you is how anxious they are right now. They have come out and said, we think this is going to hurt us financially. Please don't go forward with this. And the administration is doing it anyway. This is their only other avenue to try and carve out kind of a safe haven for themselves. So California's governor, Gavin Newsom, said that he is very confident that more automakers are going to join this agreement, that California

was already reaching out to other ones. But that remains to be seen whether they'll join this agreement or go their own way. Back before Honda and Volkswagen and BMW and even Ford, the world almost avoided this situation. The standard American car could have been an electric one. That's after the break on Today Explained. Bye. What are you doing? What are you doing? What are you doing? You don't know what you're missing You don't know what you're missing

What are you doing? Five stars Dan Albert, you just published a book called Are We There Yet? It's all about the history of cars in America. What about that history is most relevant to this emission situation we find ourselves in now? If we go back to the early days of the automobile, the emissions that people were worried about were emissions from horses. You mean gas? People were worried about horses and their gas? Mostly more solid emissions. So tons and tons of horse manure in a place like New York City.

Urine, dead horses even in the streets, really not a pleasant thing. And so the automobile, as it came in in a more mass way, really was a cleaner machine. And also the flip side of that is very early on, there were electric cars. What? At the start we had electric cars? Yeah. The earliest census of automobiles included more steam and electric cars, particularly than gasoline motors. What exactly is the era we're talking about here? From 1899 to about 1910, there's a decent market for electric cars. You did not generally plug them in at home because it was a fairly complicated operation.

Now, battery swapping was common and also alternative business models. And one of the most interesting things to me is that the very earliest cars in New York City, for example, were electric taxi cabs, but you could also rent them on a weekly basis. And you tended to have some sort of expert who helped you charge it. How did those old school electric cars perform relative to gas powered cars? Well it's in a lot of ways the same as today Very good torque So in other words they started up very quickly And if you compare that to a gasoline car of the day You had to shift gears

And that was not nearly as easy as it is today I think even a lot of people today have never driven a car with a clutch and a stick shift. And also, they stopped fairly easily. They were very quiet, very clean. And they quickly became a ladies' car, which is not to say that women liked them better, but that they were marketed to women as a second car, as a more elegant car. It's funny, Henry Ford, who we all know, bought his wife Clara an electric car,

and it had vases in it. It had kind of drawing room seats with tufted upholstery. Wow, I cannot imagine Chevy Volt putting out a ladies' electric car now. I think they'd get crucified for that. Yeah, exactly. So how exactly did the electric car fall out of fashion and the gas car come into its prominence? I guess two things. One is, and it's a very interesting article by a guy in electrical engineering saying, you know, even if we put charging stations every few miles out into the suburbs. People don't want that of their car. They want a journey not fully arranged ahead of time. In other words, they don't want to have to

follow the roads where the charging stations were. So I think that was important. The other thing, I've just spoken about drawbacks to the gasoline car. Greasy, smelly, explosive, difficult to operate, difficult to start. In a lot of ways, that was a feature for early automobilists, particularly men, especially young men, considered handling machinery a very manly thing to do. And so that adventuring, that ability to go pretty much anywhere you wanted, and also that manliness, if you will, really helped it take over. And then Henry Ford comes along and there's no looking back. I know you mentioned him and his wife's electric car, but at what point exactly does the assembly line totally

change the game? So Ford comes up with the Ford Motor Company and it's in October of 1908 that the first Model T rolls off the assembly line. And he's very open and willing to share that with the rest of the industry, his manufacturing techniques. The Model T was a great car in a lot of ways, but it was really the fact that he could just churn them out at a low price and in huge numbers that transformed America from a place with, you know, a few thousand cars to millions of cars, so that by the time we get to 1920, we're really a fully motorized American economy and culture. So what does this motorized American economy look like? After Henry Ford, we get the period of General Motors, and this starts about 1925,

1927, where the car becomes very much the center of consumerism. It's the first product that people take out loans to be able to afford. It's the first product that really holds pride of place, that signals your position in the middle class, your achievement of middle class status. And then what was genius about General Motors was you start with a Chevrolet, you hopefully make your way up to an Oldsmobile, a Buick, and then a Cadillac. But also, every September, the new cars would come out. New colors, new styles. The term is planned obsolescence. Oldsmobile's B44 is not only better looking, it's better built and better lasting.

Here's beauty with a double duty. Double duty bumpers that give double protection and are doubly good looking. You end up on this hamster wheel of constantly trying to get a new car. And what does that do to the American landscape? There is an absolute transformation of the country to service the automobile. In part because of Ford's effort to sell out into the countryside and out into the suburbs, the automobile took off very quickly. So you had an enormous amount of economic activity, not just from the automobile production

itself, but also if you think about it, you got to build roads, you got to put in gas stations, you begin to consolidate from the little red school to a nice, big regional school where kids get, in a lot of ways, a better education separated by grade. You build the suburbs. You build shopping malls and homes and commercial businesses out into the landscape, ready to be consumed and turned into productive economic uses. How should we think about this transformation? I mean, it fundamentally altered the course of this country, right?

Absolutely. And everything about America is connected to the automobile. American history runs through the automobile. And it feels like not only California, but even the automobile industry is having to reckon with the results of that right now. Was this ultimately a net positive or a negative? Yeah, that's been the most difficult part, I must say, between writing my book and also the response to the book, I refuse to say the car is

good or bad because I don't think people in the past thought of the car as bad. And even today, even with all of our consciousness about the automobile, and even with a lot of people saying quite correctly that really we should have high-speed trains and we should be on bicycles and we should be walking more, for a lot of people, that sprawl, that living in the suburbs, that nice school, that nice front yard for the kids to play remains a good thing. But I do think the way we've essentially overused the automobile, I think, is what's so fundamentally disastrous. You know, that we're trapped in our cars, that commuting times creep up, annual miles traveled creep up. But, you know, the bottom line is we've become very divided so that we have people who are

defending the pickup truck as American and other people who just think SUVs are evil and everybody should be on a bicycle. And that divisiveness, I think, makes it difficult for us to understand really where we are and then obviously where we might be going. How much has the United States' car-centric lifestyle influenced the rest of the world? There is no doubt that people all over the world, particularly in developing nations, want automobiles, want to follow the American model. Certainly China is pushing hard for electric vehicles over gasoline vehicles. We shouldn't think, though, that it's because of some government or popular concern about climate change. They have a horrible problem with air

quality in their cities. They also are hoping to overleap the Europeans, the Americans by going to the next technology. They see electric cars coming. And so their feeling is, well, we can dominate the electric car industry in a way we couldn't the gasoline car industry. And for the United States, does this move now towards more electric cars, towards self-driving cars even? Does that represent sort of a new beginning for the automobile industry in this country? I think new beginning may be a little bit of a stretch, but it certainly begins a new chapter. Electric cars have always made sense. Now we have new battery technology and new electronics that make them able to operate in the world that the

gasoline automobile created. But the idea that that would transform America and the car culture, I think is tricky because on the one hand, you know, the sound of the engine, the roar, all of those things that were true back in the day, the kind of obnoxious, truly violent elements of the automobile become very different in an electric car. I built an electric car. I've driven an electric car. It just doesn't have that visceral experience. I think as we move to driverless cars, that doesn't matter so much. You know, what do I care what the pod that's driving me around sounds like? So now if you think about a company like General Motors or especially Uber deploying driverless taxis and driverless ride-hailing fleets, they're not going to do that with gasoline cars.

They're going to do that with electric cars, because that's the business model that makes sense. But it will be a very long time before we are completely transformed from the American automobile culture that we have right now by sheer numbers. I mean, there are more cars than there are drivers to drive them in America. But a lot of the cultural associations that desire for a new car are already changing very rapidly. And it's becoming more and more difficult for the car companies to actually make money. Dan Albert writes about cars and culture for N Plus One magazine.

I'm Sean Ramos for him. This is Today Explained. Today Explained.