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Trump’s False Auto Industry Tweets

In a series of tweets aimed at the auto industry, President Donald Trump inaccurately said that his fuel efficiency plan would reduce the cost of cars “by more than $3000” and make them “substantially safer.” Even going by his administration’s analysis — which many experts doubt — he inflated the savings and is wrong about car safety.

The tweets, which began the morning of Aug. 21, followed last month’s announcement that four major auto companies had signed a deal with California to largely adhere to the fuel economy standards the Obama administration had put in place, although with slightly less stringency and more flexibility.

Trump’s plan, which has not yet been finalized, calls for freezing the standards at 2020 levels through 2026. It also revokes California’s ability to set stricter standards. The auto companies struck a deal with California to avoid two sets of standards in the country after talks between the Trump administration and the state broke down.

Later in the day, Trump’s attacks continued as he named specific companies.

“Henry Ford would be very disappointed if he saw his modern-day descendants wanting to build a much more expensive car, that is far less safe and doesn’t work as well, because execs don’t want to fight California regulators,” Trump added in a third tweet.

Alfred P. Sloan, it should be said, didn’t found General Motors, although he was one of the important leaders of the company for more than a quarter century. GM, at least so far, is not one of the companies to have officially made a deal with California; those automakers include Ford, Honda, and the U.S. divisions of BMW and Volkswagen.

Trump’s central claims about car safety and cost savings are reminiscent of the key arguments his administration has used to justify the rollback, known as the Safer Affordable Fuel Efficient Vehicles rule, or SAFE. We’ve written before that experts are skeptical of those ideas. A group of researchers, for instance, published a paper in Science last December documenting numerous errors and faulty assumptions with the administration’s analysis. But Trump’s tweets are incorrect even taking that analysis at face value.

Consider Trump’s claim that new cars under his proposal would be “substantially safer” or that automakers, by signing a deal with California, want to build cars that are “far less safe.” According to calculations by the Environmental Protection Agency and the National Highway Traffic Safety Administration, compared with leaving former President Barack Obama’s standards in place, a 2020 freeze would save 12,700 lives over the lifetime of vehicles through model year 2029. Experts, as we’ve explained, doubt that tally. But even assuming it’s accurate, almost all of those saved lives come from people driving less and having newer model cars — not from car makers making safer vehicles under the frozen standards. EPA/NHTSA documents show that only 160 of the 12,700 lives, or a little more than 1%, would be due to physical changes to the cars themselves (see Table II-73, p. 43152).

The rationale for the 160 extra deaths is that some automakers would reduce the weight of their vehicles to meet the fuel economy standards. But as we’ve written, while reduced weight might be bad in a collision with a heavy truck, it would be beneficial for the other party when colliding with a smaller car. On net, it’s not clear how weight changes as a result of stricter fuel efficiency standards would affect safety.

Kenneth Gillingham, a Yale economist and a co-author of the Science paper, told us in an email that there’s no basis for the idea that cars with lowered fuel efficiency standards would be “substantially safer.”

“The cars will all have the same safety equipment regardless of the standards and the effect of the change in the standards on the weight of vehicles and thus accident fatalities is ambiguous in the academic literature,” he said. “Some work, including my own, suggests that the standards may even save lives because of how they change vehicle attributes.”

Gillingham has previously worked for the California Air Resources Board, which is the entity in California that struck a deal with automakers. He was also on the Council of Economic Advisers under President Obama.

On average car cost, Trump also goes beyond what his agencies state. In the proposed rule, there are numerous estimates for how much less an average vehicle might cost if fuel economy standards stayed fixed at the 2020 level. None of them, however, are more than $3,000 — and those figures don’t include fuel savings.

The number the agencies highlight in the text of their proposed rule is $2,100. “[C]ompared to the proposed standards today,” the overview section reads, “the previously-issued standards would increase average vehicle prices by about $2,100.”

It’s not entirely clear where this number comes from, but it’s also listed as the average price increase for vehicles in 2026, which is the last year in which the Trump rollback would apply (see Table VII-5, p. 43265). The number only refers to a price increase and does not reflect any benefits as a result of added fuel efficiency.

The figure that EPA and NHTSA have used on their fact sheet is a $2,340 reduction in total ownership costs on a 2030 vehicle. That includes $1,850 less for technology costs — or how much the car’s price would fall — and $490 less for things such as financing, taxes and other fees.

However, that ignores the fact that a car with greater fuel efficiency would be cheaper to operate at the pump. The agencies estimated the average vehicle would reap $1,950 in fuel savings and other benefits. That means, according to the government’s calculations, the rollback would save someone just $390, on average, over the lifetime of a 2030 vehicle (see Table VII-71, p. 43323).

When we asked the Department of Transportation for an explanation for Trump’s $3,000 figure, a spokesperson directed us to a table in the Obama administration’s 2012 analysis, which shows increased lifetime costs of $3,100 to $3,200 for a vehicle in 2025 (see table 7.4-10 on p. 7-36). But that includes the costs associated with both the 2012-2016 and 2017-2025 fuel economy standards, not just the last few years of the program. The same table also points out that the lifetime fuel savings would be more than $10,000, and that on net, the rules would save consumers at least $7,200.

Gillingham, the Yale economist, told us that the DOT-referenced numbers would not be the correct ones to use. He said he had “no idea” where Trump’s figure could have come from unless the president was cherry-picking estimates of price drops for individual automakers in certain years.

Under the rollback, for example, the average price of a Ford would be $3,000 lower in 2024 (see table VII-4, p. 43263). A Fiat Chrysler or a Volkswagen also would be more than $3,000 cheaper in some years, according to the administration’s estimates, but prices for a dozen other automakers wouldn’t fall by that much. 

That could explain the president’s Ford-specific tweet, but it does not support Trump’s claim that his proposal would “lower the average price of a car to consumers by more than $3000.” According to that table, the average for all automakers in 2024 is $1,850 in savings, and it maxes out at $2,000 in 2026.

It’s worth noting that the Obama administration also predicted that upfront vehicle costs would increase under more stringent fuel economy standards. But its analyses generally estimated lower prices and always showed that the benefits would outweigh the costs for consumers.

Gillingham said, too, that many analysts think the Trump administration has overestimated the costs of adding fuel-efficient technology.

This month, Consumer Reports released its own analysis of the rollback, and found that freezing the standards would ultimately cost — not save — consumers $3,300 per vehicle, when “taking into account fuel costs and vehicle costs, among other factors.”