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6 Major Automakers Finalize Stricter Emissions Deal in California

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【Summary】Going directly against the Trump Administration, six automakers have agreed to abide by California’s stricter emissions regulations going forward.

Original Vineeth Joel Patel    Aug 24, 2020 5:00 AM PT
6 Major Automakers Finalize Stricter Emissions Deal in California

Rolling back fuel economy regulations and emissions were a few things President Donald Trump ran on. During the coronavirus crisis, President Trump went ahead with plans to roll back fuel economy standards for passenger vehicles in the U.S. 

The new regulations, which are known as "Safer Affordable Fuel-Efficient (SAFE) Vehicles," will help the administration dismantle fuel economy rules former President Obama originally announced back in 2011. While some automakers are for following Trump's proposed regulations, others have taken it upon themselves to commit to stricter emissions regulations by striking up their own deals with California.

Six Automakers Make Deals

As Reuters reports, the California Air Resources Board (CARB) announced that it has finalized binding agreements with six automakers to cut vehicle emissions in the state. The 13 other states that follow California's emissions standards reportedly stated that they also support the agreements. The decision comes as a direct defiance to the Trump Administration. The automakers that have entered into agreements with California include Volkswagen (including Audi), Ford, Volvo, Honda, and BMW (including Rolls-Royce).

CARB, according to the outlet, believes stricter regulations will "encourage innovation to accelerate the transition to electric vehicles, provide industry, the certainty needed to make investments and create jobs, and save consumers money."

The agreements aren't as difficult as the ones the Obama Administration proposed, but aren't as lenient as the Trump Administration's. So, it's a nice middle ground for those that signed. The deal will see the signed automakers make vehicles that get "cleaner through 2026 at about the same rate as the former Obama-era program, preventing hundreds of millions of tons of greenhouse gas emissions over the lifetime of the agreements." The agreements also include some kind of commitment to electrified vehicles.

Why Making A Deal Makes Sense

The automakers that have signed with California have put themselves into a good position. In case the Trump Administration's SAFE regulations don't make it past future court appeals or a future administration, these automakers are already on a path to manufacture efficient vehicles. 

California and the 13 other states that follow the same emissions regulations, make up roughly 40 percent of the new-vehicle market. Not being able to sell vehicles in that large of a segment could spell disaster for other automakers.

Ford, Honda, BMW, and Volkswagen have long sided with California, though brands like General Motors, Toyota, Hyundai, and Fiat Chrysler Automobiles have sided with the Trump Administration. Of those automakers, GM's decision to side with the President makes sense. The American automaker has a lineup that's filled with gas guzzlers. 

From powerful sports cars to massive pickups and SUVs, GM offers numerous vehicles with inefficient V8 engines. To meet regulations set forth by the Obama Administration, it would have to make drastic changes that would cost millions. With cross-town rival Ford embracing California's regulations, it will be interesting to see what GM, and other automakers, does going forward.

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