Volkswagen Partners with Ford, Honda and BMW

Yes you have read that right. Volkswagen has joined the forces of Ford, Honda, and BMW to address California’s fuel economy and emission standards. These auto makers make up about 1/3 of the US market and over the next seven years have committed to manufacturer more efficient and cleaner vehicles than the current administration would require.

So why the partnership?

The move by the auto makers is an attempt to defy the administrations attempt to freeze and rollback the prior office’s standards which would make many vehicles too expensive.

Under this new administration the US Environmental Protection Agency and the National Highway Traffic Safety Administration wants to freeze fuel economy standards at the current 37mpg fleet average target for 2020 through 2026.

In 2012 the prior presidential administration set a fleet average goal of 51mpg by 2026. Under this new agreement with California the automakers pledge to improve their fleet average by 3.7% each year which is slightly less than those 2012 target goals.

By getting ahead of the curve the auto makers are able to plan accordingly knowing the certainty of both federal and state requirements with a single national fleet and avoiding a somewhat patchy regulation structure.

One thing the automakers realize is this agreement could put pressure on all the other auto manufacturers as 13 others states and the District of Columbia have stated they will follow California’s lead on the initiative.