This post is the second in a series. Click to read Part I.
Proposals for Regulatory Change
As described in Part I, President Trump’s attack on clean vehicles, introduced in his executive order on “Unleashing American Energy,” will undermine progress in achieving healthy air and reducing climate emissions. The executive order requires the U.S. Environmental Protection Agency (EPA) and the Department of Transportation (DOT) to consider regulatory changes to vehicle emission standards that would eliminate what he calls the “EV mandate.”
Vehicle emission standards require manufacturers to produce fleets of vehicles that, by category, do not exceed a certain level of emissions per mile. Two types of standards are at stake. One consists of federal vehicle standards for various categories of cars, trucks, and other mobile sources. Another set consists of more stringent standards set by California and adopted by many other states.
Federal Vehicle Standards
Federal vehicle emission standards have see-sawed through presidential administrations. Most recently, in 2024 the Biden administration adopted multi-pollutant standards covering conventional and greenhouse gas emissions for light-duty vehicle standards and medium-duty vehicles like large pick-up trucks and vans. In addition, EPA set greenhouse gas emission standards for heavy-duty vehicles like trucks and buses.
The regulations do not mandate electric vehicles (EVs), but EVs are likely to play a significant role in helping manufacturers achieve the standards. EPA anticipates that, due to the rules, by the early 2030s, 30 to 56 percent of new automobiles are likely to be battery-electric. They estimate that 20 to 32 percent of medium-duty vehicles offered for sale will likewise be battery-electric by that time.
EPA emphasized that the standards will give “Americans unprecedented flexibility” in vehicle choice. For heavy-duty vehicles, EPA notes that the greenhouse gas standards are “technology neutral,” and that manufacturers can combine technologies, including advanced internal combustion vehicles, hybrids, battery-powered vehicles, and hydrogen fuel cell vehicles.
More Stringent Alternative Vehicle Standards (California Standards)
Trump’s executive order also proposes eliminating a stricter set of emission limits, set by California, that have historically run parallel to EPA’s standards. Section 2(e) says, “[i]t is the policy of the United States … (e) to eliminate the ‘electric vehicle (EV) mandate’ … by terminating, where appropriate, state emissions waivers that function to limit sales of gasoline-powered automobiles ….”
Although the federal Clean Air Act generally preempts states from setting their own vehicle standards, the law instructs EPA to “waive” that preemption for California if the state meets certain criteria. Other states can then choose whether to adopt the federal standards or the more stringent California standards. To meet their air quality challenges and climate goals, 17 states have adopted at least some of the California standards, representing a sizable share of the U.S. vehicle market. California estimates that 40 percent of national car sales and 25 percent of new heavy-duty trucks meet the state’s vehicle emission standards.
Given its need for stringent vehicle standards to protect public health and mitigate the state’s contribution to climate change, California has obtained dozens of waivers over the years. In 2024, EPA granted a waiver for the state’s multipollutant Advanced Clean Cars II regulations, which address conventional pollutants, toxic pollutants, and greenhouse gases. The regulations require increasing sales of zero-emission vehicles, culminating in 100 percent zero-emission sales by 2035.
Trump’s ascension is also stalling California’s further progress in transitioning to clean transportation. A week before the president’s inauguration, the state withdrew two waiver requests for cleaner truck fleets and trains. According to the American Lung Association, these regulations would have provided substantial health benefits — four times the health benefits associated with the clean car rule that received the recent waiver.
The Legal Pathway to Rollbacks
Trump’s executive orders are the first foray, but they can only do so much: they set policy but cannot, themselves, undo laws and regulations. To roll back these protections, the agencies must propose new regulations and allow an opportunity for public comment before finalizing them. Environmental advocates are then likely to challenge the new standards, asserting that they represent an arbitrary change.
Although these processes will take time, the Trump administration appears primed and ready to go. The first Trump Administration invalidated all waivers for California’s greenhouse gas and electric vehicle requirements and rolled back Obama administration vehicle emission regulations through the Transportation Department’s fuel economy authority.
And through a novel legal interpretation, EPA has announced that its California waivers are “rules” that are subject to the Congressional Review Act. EPA is transmitting several of the Biden administration’s consequential waiver decisions to Congress, where the Republican majority could speedily invalidate them, frustrating California’s and other states’ efforts to transition to cleaner cars and trucks.
Impact on a Clean Transportation Transition
The initial electric vehicle rules from California and, later, from the federal government, pushed U.S. automakers to invest in electric vehicle research and, ultimately, production. A key question is the degree to which the momentum toward electric vehicles will continue, even as vehicle standards weaken. A number of factors are at play.
One is the investments that automakers have already made or are planning to make in EV production. According to a 2023 Atlas Public Policy study, auto manufacturers and battery makers have announced investments of more than $150 billion in the U.S. since 2021, with more expected. The study observed that over half of the investments had already been allocated to specific manufacturing facilities. These existing investments could lead to increasing production even without regulatory requirements.
In addition, electric vehicle manufacturing has not only been pushed by regulatory requirements, but also pulled by the Inflation Reduction Act’s substantial tax credits and loans. The Inflation Reduction Act provided billions of dollars in tax credits and loans for electric vehicle manufacturing and mattery manufacturing facilities, helping to drive what the Center for American Progress terms a “U.S. Manufacturing Renaissance.”
The IRA’s $7,500 tax credit for EV purchases also helps drive the market for EVs. Although the “Unleashing American Energy” executive order calls for “considering the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs …”, Congress mandated these incentives, and only Congress can undo them. (I discuss the status of federal investments in Part III of this series.) It is not clear that congressional members will act to undo manufacturing opportunities that are directly benefiting their districts.
Moreover, voluntary agreements between automakers and California may also preserve clean car investments notwithstanding regulatory changes. When Trump revoked California’s clean car waivers during his first term, several automakers entered into voluntary agreements with California to continue reducing greenhouse gas emissions through the 2026 model year.
Lastly, automakers globally are transitioning to electric vehicles in response to clean energy policies elsewhere in the world. The auto industry may continue its EV investments in order to remain competitive in the global market.
Conclusion
As explained in Part I, transportation emissions have significant adverse health impacts and are the United States’ largest contributor to climate change. Rolling back federal vehicle standards and revoking California’s waivers could threaten progress in meeting public health standards. At the same time, a variety of forces may induce automakers to continue investing in EVS and encourage consumers to keep buying them.
For a deeper dive into the first Trump administration’s rescission of California’s authority to regulate vehicle emissions, see Alice Kaswan, Statutory Purpose in the Rollback Wars, published in the Hastings Law Journal in 2020.
