New Administration Focus on Environmental Issues Signals More Changes Ahead in Auto Industry

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Foley & Lardner LLPThe auto industry has been planning for the impact on a change in administration on many fronts.  As previously discussed, the new administration has a strong focus on environmental policy, and is expected to make sweeping changes.  What is potentially in store for the auto industry?  The first few days in office provide clues to what will be coming.

A week into office, the Biden administration has made the following moves, among others pertinent to the auto industry:

Rejoining the Paris AgreementThe Paris Agreement is an international treaty aimed at reducing greenhouse gas emissions. The Trump administration had withdrawn from the Paris Agreement.

Fuel Economy. Issuing an executive order for immediate review of agency actions taken during the Trump administration, including fuel economy.  This includes direction to consider suspending, revising, or rescinding the: “Establishing Ambitious, Job-Creating Fuel Economy Standards:  ‘The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program,’ 84 Fed. Reg. 51310 (September 27, 2019), by April 2021; and ‘The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021–2026 Passenger Cars and Light Trucks,’ 85 Fed. Reg. 24174 (April 30, 2020), by July 2021.”  Biden further ordered that “in considering whether to propose suspending, revising, or rescinding the latter rule, the agency should consider the views of representatives from labor unions, States, and industry.”  This follows a campaign promise to pursue more stringent fuel economy standards rolled back under Trump.

Electric Vehicles.  Issuing an executive order regarding transforming the federal fleet of vehicles to electric or clean energy vehicles, made in the US.  This follows announcements earlier this week by Biden that he intended to move the 650,000 federal fleet to EVs, in conjunction with his Buy American executive order. 

Charging Infrastructure. Focusing on building an electric vehicle charging infrastructure.  This goes hand in hand with the federal fleet but aims to transform the current charging station infrastructure to be broader and more accessible. 

California Emissions. The industry is also expecting Biden to reverse the Trump administration’s waiver on California to set stricter standards.  This had left the auto industry divided, with manufacturers picking sides in the battle.

In remarks on January 27 in conjunction with his climate change, Buy American, and environmental executive orders, Biden described his administration's goals as “one million new jobs in the American automobile industry.” As the administration continues ramping up its actions, we will continue tracking the developments and impact for the auto industry.

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