The five companies account for about 30 percent of the U.S. auto market. Per California, they need to improve the fuel economy of their cars from the current average of about 38 miles per gallon to about 51 miles per gallon by 2026.
This spring, however, the Trump administration will roll back Obama-era regulations, which would require carriers to have an average fuel economy of 54.5 miles per gallon by 2025. They will only need to reach an average benchmark of 40 miles per gallon on average.
The administration also sought to prevent states from setting their own emission standards. California had an exemption from the Environmental Protection Agency to set its own benchmarks, but the agency withdrew that in September. In the same month, the Department of Justice launched an anti-trust investigation against the four companies that originally agreed to the California guidelines. The report reports the survey in February.
Should he emerge victorious in the presidential election, it seems likely that Joe Biden will try to restore the rules for the Obama-era emission. But regardless of whether Biden or Donald Trump wins the White House, those five motorists will follow California standards.
In addition, the companies have effectively made a nationwide commitment to sell cars that are more efficient and have lower emissions than required by federal regulations. It will be much easier for them to make cars that follow a single set of standards instead of splitting the market. Thirteen other states, including New York and Washington, follow California’s standards and will uphold the binding agreement.
Meanwhile, a lawsuit is underway that seeks to block the government’s federal rollback and / or guarantee that states can continue to impose their own, stricter rules. It appears likely that the Supreme Court will ultimately decide on the case.
