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US automakers still pursuing Obama-era fuel economy standards: SMDI

Chicago — The Trump administration's March 2017 announcement of a re-examination of fuel economy standards for cars and light duty trucks was seen as a positive for the US steel industry, as it would take some of the pressure off automakers to lighten the weight of their vehicles quickly.

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However, with the final rules still not in place, automakers are continuing to tweak production to meet the higher fuel economy standards laid out by the Obama administration, Jody Hall, vice president of the Steel Market Development Institute, said Thursday.

"The answer was supposed to come in early 2019 and we still don't have a final answer," Hall told the S&P Global Platts Steel Markets North America conference in Chicago.

Without clarity around what the new standards would be, automakers are continuing to focus on hitting the requirements issued by the Obama administration, which requires car and truck fleets to average 54.5 miles/gal by 2025, according to Hall.

"It was a little confusing to us because we knew that they wanted to have relaxation on the [Corporate Average Fuel Economy (CAFE) standards], but it turns out if you think about the timing ... it's 2019 and automakers are already designing 2022 vehicles. They can't wait, it's too late, so it doesn't really matter what happens because automakers have decided they have to err on the side of being conservative and going after what the original fuel economy standards were set."

As a result, automakers have become more proactive in focusing on electric car production to help offset the use of internal combustion engines, Hall said. Some automakers are expecting all of their vehicle models to be electric by 2025-2030.

"There's certainly been a lot of advancements in innovation and fuel economy continues to rise," Hall said.

-- Justine Coyne, justine.coyne@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com

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