The car industry is undergoing its fastest transformation since the invention of the petrol car. Policy has been struggling to keep pace around the world. Now US President Trump is adding a new twist by loosening US fuel economy rules as a way to reduce the upfront cost of new cars, reversing a key policy of Joe Biden.
But the global effects of that decision run deeper than they appear. They will be felt far more sharply in Europe than in the US.
Trump has said the rollback could save buyers about $1,000 on the price of a car. Supporters argue it will make cars more affordable. But the real point is that it protects the profitability of petrol trucks and sport utility vehicles while weakening one of the few regulatory pressures that was compelling US carmakers to expand electric vehicle production. Trucks and SUVs make up 80 per cent of new vehicle sales in the US.