Markets, not mandates, to drive national auto policy Image By EPN Staff California’s authority to mandate aggressive zero-emission vehicle sales targets – and effectively shape national auto policy – was revoked under legislation recently approved by bipartisan majorities of Congress. The measure effectively dismantles California’s Advanced Clean Cars II (ACC II) regulation, which called for all new passenger vehicles sold in California and other participating states to be zero-emission by 2035. Why it matters California had exercised its authority under the Clean Air Act to seek EPA approval to establish stricter vehicle emissions rules than federal standards, and that approval was granted in 2022 for ACC II. Seventeen states adopted California’s model or indicated plans to do so, collectively representing nearly half of the U.S. auto market. The regulation would have forced automakers to significantly ramp up electric vehicle production over the next decade to satisfy those states’ mandate, despite lagging consumer demand, limited charging infrastructure and the prospect of fewer subsidies to incentivize sales. The bigger picture According to recent industry data, EVs represented less than 10% of all new light-duty vehicle sales in 2024. California, however, continued to lead the nation in EV adoption with a market share of more than double the national average. The vote highlights the influence of the auto industry in shaping national policy. Major automakers such as Toyota and General Motors supported the resolution, citing lagging EV demand, high production costs, and limited charging infrastructure as obstacles to meeting California’s targets. The National Automobile Dealers Association also supported repeal of the California regulation. What others are saying Environmental groups and California officials denounced the move, saying it undercuts long-term climate goals and state authority. Other lawmakers and trade associations praised the legislation as a necessary check on regulatory overreach and an important effort to prevent one state from distorting the market and setting national auto policy. Additional context President Trump is expected to sign the measure. His administration has previously expressed support for reducing regulatory burdens on automakers and limiting California’s environmental authority. California officials have pledged to challenge the law in court, arguing it undermines the state’s Clean Air Act waiver. The California Air Resources Board (CARB) emphasized that the rule was designed with flexibility and phased implementation beginning in 2026. The resolution was introduced through the Congressional Review Act (CRA), a mechanism that allows Congress to reverse federal agency decisions.
