On Thursday, President Trump and the Environmental Protection Agency revoked a long-standing greenhouse gas emissions finding that could have major ramifications on the U.S. auto industry.
First things first: Rollback tied to reversing the 2009 “endangerment finding,” the legal framework that allows the U.S. government to regulate the emission of greenhouse gases.
Many automakers have expressed relief about this development, arguing that U.S. emissions regulations have been too restrictive and favored electric vehicles.
But critics contend that abandoning more environmentally friendly cars could result in fewer options for U.S. buyers, and weaken American automakers’ global footprint in the long run.
What they’re saying: “We've been clear and consistent: The current CAFE rules finalized under the previous administration are extremely challenging for automakers to achieve given the current marketplace for EVs," said John Bozzella, president and CEO of the Alliance for Automotive Innovation, which represents several legacy automakers like General Motors $GM ( ▲ 1.4% ).
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Tesla $TSLA ( ▼ 0.12% ) on the other hand, argued that, “Reversing the Endangerment Finding would also deprive consumers of choice and extensive economic benefits, have negative effects on human health, and further impact the integrated North American automotive sector," in a letter to the EPA (via CNBC).
Why it matters: Dealers could see near-term relief from an EV-first tilted regulatory glidepath, but a prolonged legal fight and potential policy whiplash could complicate how stores message “future-proof” powertrain choices to shoppers.
Between the lines: President Trump has repeatedly called the engagement finding “a scam,” and openly rejects that climate change is a danger to public health. But multiple scientific studies have quantified the harmful nature of these greenhouse gases.
Looking ahead: Without a stable federal framework OEMs can plan for, the U.S. risks falling behind global markets that are locking in aggressive emissions targets. And automakers could once again find themselves navigating a patchwork of shifting rules rather than a clear path forward.
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