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Analysis: Trump's Auto Industry Decisions Divide OEMs, Oil Companies

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Aug. 9, 2018—President Donald Trump’s administration has taken on California in a looming battle that oil giants want but automakers do not. And that should make the overall auto industry fascinating to watch in the coming weeks, noted Business Insider.

Thanks to language in the 1970 Clean Air Act, California has long set its own fuel economy standards. Fifteen other U.S. states have adopted similarly strict standards, meaning that California’s fuel economy rules affect more than 40 percent of the U.S. population.

California is adamant about not backing down from its EPA exception, and automakers don’t want it to, businessinsider.com noted. If compelled to chose, OEMs would back California, considering the nightmare of meeting two national standards, or trying to figure out what to do with regard to future product planning.

This situation illustrates a significant misalignment between OEMs and big oil, the business website added. While the two are often assumed to be partners, that doesn’t entirely seem to be the case these days. After all, automakers are deeply invested in technological innovation, much of which is focused on improving the fuel efficiency. 

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