Policy Alert: California EV Mandate Targeted for Repeal

Action: The Senate passed a joint resolution of disapproval to repeal California’s EV mandate, sending it to the President for signature. The measure, supported by the Administration, would rescind the Biden Administration’s waiver allowing California to mandate that a certain share of new car sales meet zero-emission standards. However, the law is likely to be challenged in court as exceeding Congress’ authority under the Congressional Review Act.

Key Insights

• California’s Advanced Clean Cars II regulation was first approved in 2022, requiring that 35% of new car sales be zero-emission by 2026. By 2035, the mandate for new zero-emission sales would ramp up to 100%, effectively phasing out the sale of traditional internal combustion engine (ICE) vehicles. While over a dozen states have adopted the California mandate, in recent months, several have reversed or delayed adoption citing the increased economic uncertainty facing automakers.
• The Administration’s Executive Order on Unleashing American Energy intended to eliminate the mandate; the new law once signed will provide a definite repeal. The House advanced the measure in April with support from both parties while the Senate voted along party lines.
• However, the Government Accountability Office determined in March that Clean Air Act waivers for California did not constitute “rules” under the Congressional Review Act (CRA), following precedent. The Senate Parliamentarian affirmed this determination in early March. Senate Majority Leader John Thune (R-SD) criticized this decision and accused her of deferring to GAO, characterizing it as “unprecedented interference.”
• These determinations potentially leave the bill open to legal challenges.
• US sales of EVs, both total sales and as a share of new vehicle sales, have grown in recent years. However, US automakers rallied in support of repealing the mandate, citing that the standards undermine consumer choice, affordability, and run contrary to current market conditions facing the industry.
• China continues to dominate EV manufacturing globally, producing cheaper vehicles on average than American and European automakers amidst ongoing trade disputes with both the United States and Europe.