The California Air Resources Board announced Monday that it has finalized five individual agreements with automakers pledging to adhere to annual reductions of passenger-vehicle greenhouse gas emissions.
The terms, negotiated with BMW (including Rolls-Royce), Ford, Honda, Volvo, and Volkswagen Group (including Audi)—six automakers, as California tallied it—are claimed to be a compromise. They’re more lenient than what was originally required by the state but stricter than the new U.S. EPA rule.
2020 Rolls-Royce Ghost Zenith Collection
Like existing California Clean Cars standards, the agreement prioritizes putting more zero-emissions vehicles on the road. The exact method as to how each automaker complies with California is left out as an unpublished appendix to preserve confidential business plans and future products.
The companies agreeing to meet California emissions standards also essentially get an extra year to fall in line with former Obama-era national targets for fleetwide tailpipe emissions—corresponding to net improvement in fuel economy of about 3.7% each year from 2022 to 2026. The new contract with automakers begins with vehicles for the 2021 model year.
“The auto companies party to the voluntary agreements will stay on course to make cleaner cars consistent with their individual production plans to substantially electrify their respective fleets and cut greenhouse gas emissions,” CARB saud, adding that the states that have previously adopted California standards have said they’ll support the agreements.
The volunteer agreements continue to use a credit system, with cars and trucks treated separately, as well as vehicle footprint.
2021 Ford Mustang Mach-E First Edition
The negotiation stems back to summer 2019, after the Trump administration threatened to freeze federal fuel economy standards at 2020 levels. Originally, Ford, Volkswagen, Honda, and BMW announced that they would voluntarily seek a deal for tighter standards with California, with Volvo joining later. That led to the bluster of a Justice Department antitrust probe that resulted in no action.
California and the states that follow California emissions add up to more than 40% of the U.S. new vehicle market. Meanwhile, the Trump administration’s September 2019 revocation of California’s Clean Air Act emissions waiver, permitting it to set its own emissions rules, puts manufacturers in a regulatory limbo while the case is being resolved.
The agreements, which California has indicated would be offered to other automakers, help “support the development of streamlined application processes for MY2027 and later vehicles,” and they lay out a course through which other automakers might potentially resolve things with the state.
General Motors and Toyota are among the companies that have actively chosen a different path, siding with the Trump administration in a court battle over whether the federal government can revoke California’s power to set vehicle emission requirements.
2020 Chevrolet Suburban
Even in recent months, GM has sided with the federal government in hopes of its “one national plan” vision supporting EVs—even when it was clear there was going to be no such thing. That’s put GM in a figurative self-imposed brownfield, as crosstown rival Ford is embracing the challenge on paper with California states for more zero-emission vehicles and the state of Michigan is part of a wider group of 23 U.S. states—plus some major cities—filing a suit challenging the revocation.
In retaliation, California announced last November that it would boycott those automakers for the state’s fleet purchases.
As a further wildcard to add to the mix, the federal standards might not hold either. Last month, the EPA inspector general announced that it would review the EPA’s rule-making process, after the EPA’s own internal analysis contradicted the final rule that was pushed through—allegedly just in time to keep it from being easily overturned.