Auto executives descend on New York’s annual auto show this week amid cooling demand for new cars and trucks. But getting buyers to open their wallets could be a breeze compared with the emissions battle the executives face in the Empire State.
New York is one of a dozen states that follow California’s vehicle-emissions standards, which are set separately from Environmental Protection Agency regulations. The states make up roughly 40% of the US car market.
New York and California officials bristled when the Trump administration, after weeks of industry lobbying, reopened a review of stringent federal emissions standards that are currently aligned with their rules. They have criticized auto makers for running to the White House for relief, and suggested they will wage legal battles to keep their regulations strict.
“The Trump administration’s attempts to roll back readily achievable vehicle emission standards is a dangerous attack on the decades of progress we’ve made in cleaning up our air,” said New York Attorney General Eric Schneiderman in a statement. States have clear rights to adopt stricter pollution standards and New York “won’t hesitate to fight back” against efforts to undermine them, he said.
Auto makers want to relax federal rules, saying that low gasoline prices are pushing consumers toward fuel-thirsty pickup trucks and sport-utility vehicles that now account for 60% of US sales. That makes it harder to sell electric cars and other more-expensive cleaner technologies that help car makers meet gas-mileage standards, they say.
Car companies toe a careful line at auto shows: They are trying to woo buyers while also impressing regulators or investors who want to see progressive technology, even as manufacturers lobby against government rules meant to speed their adoption. Once primarily a showcase for fresh sheet metal, they have increasingly become displays for futuristic rides, such as self-driving cars years away from hitting dealerships.
Among this year’s moonshots: Honda Motor Co. is showcasing its Clarity electric car and BMW AG’s iPerformance plug-in hybrid vehicle lineup will also be displayed.
New York’s exposition at the sprawling Javits Center is the first major US car show since the Trump administration reopened a review of federal targets that require auto makers sell vehicles averaging 54.5 miles a gallon, or 40 mpg in real-world driving, by 2025. California sets its own standards under a waiver from the EPA, and most of the states that align with it went for Democrat Hillary Clinton in the November presidential election.
“California’s not alone,” said Margo Oge, who headed the EPA’s transportation and air-quality office for 18 years until 2012. “Industry and this administration must work with California. They have no choice.”
New York has joined California as part of a broader resistance to President Donald Trump’s effort to reverse the Obama administration’s climate-change agenda. The Democratic governors of both states in March vowed to exceed targets for curbing carbon pollution from utilities after Mr. Trump signed an executive order aimed at undoing former President Barack Obama’s Clean Power Plan. California in late March upheld its own vehicle-emissions standards, which emulate the current federal targets and start climbing sharply in five years, furthering the potential of a future showdown.
In a March 23 letter to White House Economic Council Director Gary Cohn, auto makers signaled they were hoping to avoid a confrontation.
“We were pleased to see that the White House indicated a desire to bring all relevant stakeholders, including California, to the table in a genuine, serious and constructive effort to build consensus,” wrote Mitch Bainwol, head of a Washington industry lobbying group. Auto makers want to keep California on board with US rules, avoiding different standards across state lines.
Car companies have pointed to stretching the timeframe for meeting the standards, and receiving more credits for certain technologies, as possible changes that would ease compliance. They estimate current rules will cost them $200 billion.
“California is not moving from the path it has been on for a long time now,” said Mary Nichols, chairwoman of the Air Resources Board, the state agency policing tailpipe emissions, in an interview. “We have an economy which is moving in the direction of being less reliant on petroleum.”
At a March hearing, she criticized industry lobbyists in Washington. “What were you thinking when you threw yourself upon the mercy of the Trump administration to try and solve your problems?” she said.
Should California retrench in the reopened review of the US regulations, the EPA could weigh rescinding its waiver under the federal Clean Air Act to stop the state from enforcing its own rules that are followed elsewhere.
But that would be an unprecedented move likely to spark litigation that could consume the rest of Mr. Trump’s term—and sow uncertainty for car companies. The EPA had no immediate comment.
California would face some uncertainty in any court battle resulting from the EPA deciding to rescind the state’s waiver. State lawmakers enlisted former Obama administration Attorney General Eric Holder to fight possible legal battles. While against watering down standards, Daniel Sperling, a member of California’s Air Resources Board, said during the March hearing “some changes should be made.” Credits auto makers receive for electric cars could be extended beyond a 2021 expiration, for example.
Auto makers also want the EPA’s regulations better aligned with separate fuel-economy rules set by the National Highway Traffic Safety Administration. The agency in February released preliminary data showing auto makers falling short of mileage requirements.
The EPA and California officials have found auto makers in recent years beating targets, with costs for technologies needed to meet them declining. Auto makers can meet future standards with 93% of vehicles featuring gas-powered engines, while electric cars and hybrids maintain small market shares, according to California regulators.
Low charge
California and New York opposed the Trump administration reopening a review of US vehicle-emissions standards. But the so-called zero-emission vehicles, including electric and fuel-cell cars, aren't hot sellers in the country.