Automakers Agree to Tougher Emissions Deal with California

Ignoring earlier threats from President Donald Trump, the California Air Resources Board and several major automakers finalized agreements that would have the company’s cutting vehicle emissions on vehicles in the Golden State.

The move comes in direct defiance of the Trump’s administration for lower emissions standards, claiming they will make the roads safer and save money for consumers. The automakers engaged in talks with California were subjected to an antitrust investigation by the Justice Department. No actions resulted from the probe.

The deal has Ford Motor Co., Volkswagen AG, Honda Motor Co., BMW AG and Volvo Cars agreeing to cuts that are more substantial than the 1.5% improvements required by the Trump administration. Those mandates changed the requirement implemented by the Obama administration, which pushed for a 5% improvement.

(Four automakers sidestep Trump, make fuel economy deal with CARB.)

The deal with CARB has vehicles getting “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 organization noted.

“The framework agreements are voluntary commitments that support continued annual reductions of vehicle greenhouse gas emissions through the 2026 model year, encourage innovation to accelerate the transition to electric vehicles, provide industry the certainty needed to make investments and create jobs, and save consumers money,” officials added in a release.

While the deal mirrors the path for improvements laid out by the Obama administration, they are not as stringent — a happy middle ground. In addition to the emissions cuts, the automakers have also agreed to electric vehicle commitments.

(California regulators order massive shift to battery, hydrogen power for vans, trucks.)

The settlement agreements say California and automakers agreed to resolve “potential legal disputes concerning the authority of CARB.” The deal can be viewed as precedent setting as more than a dozen other states have adopted California’s standards.

These states joined together in a lawsuit – 23 in all – challenging the current administration’s emissions rules. The “final agreement will reduce emissions in our vehicles at a more stringent rate, support and incentivize the production of electrified products, and create regulatory certainty,” Ford officials noted.

While the deal does represent a significant move by automakers, there are several large automakers, including General Motors Co., Fiat Chrysler Automobiles N.V. and Toyota Motor Corp., that did not join the California agreement, saying they would adhere to the more lenient standards set forth by the president.

(West Coast group outlines plan for 1,300-mile EV charging corridor.)

Although the deal does put the automakers in a positive light, the bottom line also played a role in the move by at least automaker. “By setting these long-term, predictable, and achievable standards, we have the regulatory certainty that is necessary for long-term planning that will not only reduce greenhouse gas emissions but ultimately benefit consumers as well,” BMW officials told Reuters.