Car Makers Ignore Trumps Advice To Lower Fuel-Efficiency Standards (#GotBitcoin?)

Impasse between White House, California has auto makers scrambling for an alternative. Car Makers Ignore Trumps Advice To Lower Fuel-Efficiency Standards (#GotBitcoin?)

Major car makers are caught in the crossfire between the Trump administration and California over U.S. tailpipe-emissions rules, leading them down different paths in how to respond to the standoff.

The White House last year proposed easing the Obama-era fuel economy standards, freezing them at 2020 levels, or around 37 miles a gallon, through 2026. The move came after car companies had pressed for years for more flexibility on the existing rules, which were agreed to in 2012 and call for increases in fuel economy annually through mid-decade to an average of about 50 miles a gallon.

Car industry executives have argued the current fuel-economy requirements are too strict and don’t take into account the shift in consumer preference to larger, less-fuel efficient trucks and sport-utility vehicles. When President Trump came into office, they raised the issue in a White House meeting the week after his inauguration.

But the rollback being pushed by the administration is so extensive that car companies are worried it will set off a protracted legal battle with California—the nation’s most populous state and the biggest auto market—and ultimately conclude with manufacturers having to meet two different sets of requirements for selling cars in the U.S. Auto makers have warned the continuing tussle could hamper planning.

In a tweet Wednesday, Mr. Trump defended his plan, saying it would lower the average price of a car by $3,000 and have little impact on the environment.

Earlier this summer, four car makers— Ford Motor Co. , Volkswagen AG , Honda Motor Co. and BMW AG —splintered from the rest of the industry, striking a side deal with California to meet new standards that are tougher than the Trump administration’s proposal but less stringent than the Obama-era ones. For decades, California has had the legal authority to set its own requirements. Thirteen states now follow California’s rules, a number that has grown over time.

The car companies reasoned that even if the White House prevails in freezing the targets they could still be stuck with paying the added cost of building cars to meet California’s stricter standards, say people familiar with their thinking. California has sued the Trump administration trying to block its efforts and a legal battle could take years to resolve, prolonging uncertainty about the rules.

But other auto makers have been reluctant to join the California pact, preferring instead to wait for a final rule, which is expected to be made public later this year. Some foreign-based car manufacturers are also worried a public stance against the rollback would only embolden Mr. Trump to carry out his threat to impose tariffs on imported cars, according to one person close to the fuel-economy discussions.

General Motors Co. , meanwhile, doesn’t think the California proposal gives enough credit for sales of fully electric vehicles, an area where it is investing heavily, people familiar with GM’s thinking say. The Detroit auto maker is pushing for rules to require car companies to sell battery-powered cars across all 50 states.

Such a divergence is unusual for the auto industry, which has been mostly aligned on fuel economy in the past, say industry executives, former regulators and analysts.

“We tend to think of the industry as monolithic,” said Brett Smith, a director at the Ann Arbor, Mich.-based Center for Automotive Research. “But it is increasingly very different companies with very different goals.”

The administration views the regulatory rollback as a way to help car makers lower costs and adjust to the shifting demand for bigger vehicles. It also wants to revoke California’s federal waiver to set its own emissions standards.

California has already filed a lawsuit to prevent the White House from moving forward with its efforts and threatened more legal action if the existing rules are changed.

A U.S. Transportation Department spokesman said any car company that wants to exceed the proposed standards is free to do so if they can find enough buyers. “But California does not have the legal authority to, and should not, push the U.S. auto market to electric cars to serve its own political agenda,” he said.

A spokesman for California Gov. Gavin Newsom said in an email that California’s agenda is to clean up the air, fight climate change and protect the health of children.

The rift has left auto makers in the middle but with differing agendas. Some car companies have already made large investments in electric vehicles, putting them in a better position to comply with the existing standards, while others are more dependent on trucks and SUVs for the bulk of their sales, making those targets harder to reach.

“No two car companies are totally aligned,” said Mandy Gunasekara, a former Environmental Protection Agency official who had worked on the proposed rollback and left the administration this year.

Ford, Honda, BMW and VW had hoped for a truce between the administration and California. This spring, the companies and 13 other auto makers signed a letter urging Mr. Trump to personally find a compromise with California.

That letter was “summarily dismissed” by the administration, said an executive for one auto maker. The four car companies—representing about 30% of all U.S. vehicle sales—then forged their own agreement with California, working behind the scenes for more than a month and willing to risk political backlash from the White House, say people involved with the effort.

The voluntary pact with California was signed in July.

“In this case, deregulation doesn’t produce lower costs. It produces higher costs,” this executive said.

Since then, no other car company has publicly revealed plans to join the California deal.

Auto makers, such as Fiat Chrysler Automobiles NV and Kia Motors Corp. , say they want one set of federal standards on fuel economy but declined to comment further.

GM has proposed its own plan to revise the Obama-era regulations, backing a proposal to increase fuel economy by about 1% annually through mid-decade, short of the 3.7% under the California agreement. The largest U.S. auto maker by sales is also pushing for federal rules requiring car companies to sell a minimum number of electric vehicles across all 50 states.

Mark Reuss, GM’s president, said last fall a federal program for requiring electric cars would foster a market for these vehicles and help manufacturers better plan for the future.

“We’re making bets now on a lot of uncertainty, which is highly destructive to capital,” he said.

Updated: 9-19-2019

Trump Administration Takes Step Toward Loosening Vehicle Emissions Standard

Move marks another step in easing requirements set under the Obama administration.

The Trump administration took a step toward loosening emissions rules for vehicles sold in the U.S. by moving to strip California’s ability to set its own tougher requirements, which officials said will give drivers access to cheaper, safer cars.

Officials from the Environmental Protection Agency and the Transportation Department said Thursday they issued a final action on a rule that will unify the country’s fuel-economy and greenhouse-gas-emissions standards. The announcement, which had been previewed by President Trump and other officials earlier in the week, marks another step in easing requirements set under the Obama administration in 2012.

The actions ensure that “no state has the authority to opt out of the nation’s rules, and no state has the right to impose its policies on the rest of the country,” said Secretary of Transportation Elaine Chao.

Critics say the administration’s moves will hurt air quality and the fight against climate change.

“You created chaos here because the auto makers are not going to know what to do,” said Rep. Zoe Lofgren (D., Calif.) at a hearing on Capitol Hill following the announcement. “This is going to be tied up in court for the foreseeable future.”

EPA Administrator Andrew Wheeler said that the action will provide certainty for auto makers as they prepare to comply with stronger standards designed to cut air pollution.

“Most auto makers can’t comply with the trajectory of the current standards,” Mr. Wheeler said at a press conference Thursday morning.

In the press conference, Ms. Chao called the standards set by the Obama administration “unattainable” and said they made the price of new cars unaffordable for some families. “The rule will not force auto makers to spend billions of dollars developing cars that consumers do not want to buy or drive,” she said.

California has long had the authority to set its own rules on limiting air pollutants from cars, but the Trump administration believes such requirements should be set by the federal government. California has already taken legal action to block the White House’s efforts to take away its waiver to set its own standards, and top state officials threatened more lawsuits on Wednesday.

Federal officials said they are still working on additional rules that will give auto makers the full scope of requirements and expect to release those details later this year.

Rescinding the California waiver would fulfill a longstanding goal of the administration to curb California’s influence over the car industry with its ability to set more stringent emissions rules than federal mandates. In July, four car companies— Ford Motor Co. , Honda Motor Co. , Volkswagen AG and BMW AG —signed an agreement with California to meet tougher emission requirements than those proposed by the Trump administration.

In previewing the planned action, Mr. Trump tweeted Wednesday: “Auto makers should seize this opportunity because without this alternative to California, you will be out of business.”

Led by California, States Sue EPA Over Tailpipe-Emissions Dispute

Move comes a day after the Trump administration announced new regulations to strip away California’s authority.

California, joined by 22 other states and the District of Columbia, sued the Trump administration Friday in a bid to preserve the state’s power to set tougher vehicle-emissions standards for the country’s auto industry.

California Attorney General Xavier Becerra filed the lawsuit in a Washington, D.C., federal court the day after officials from the Transportation Department and the Environmental Protection Agency announced new regulations to strip away California’s authority.

“California has been regulating vehicle emissions since 1959. Its authority to do so has been repeatedly recognized, reaffirmed, and even expanded by Congress,” the states said in the lawsuit. The new Trump administration effort “flies in the face of this history,” the states said.

California’s authority to set its own greenhouse gas emissions standard exists in the form of a waiver to the Clean Air Act. Thirteen other states follow California’s rules—representing roughly one-third of overall U.S. auto sales last year—giving California’s air regulators wide power over national standards.

Federal regulators are working on their own tailpipe-emission rules that could ease requirements set under the Obama administration in 2012. Their efforts, they said, would give drivers access to cheaper, safer cars while providing certainty to auto manufacturers as they engineer future models of cars that comply with anti-air-pollution rules.

The administration’s moves against California, critics say, will hurt air quality and the fight against climate change.

California’s rules got some industry support earlier this year. In July, four car companies— Ford Motor Co. , Honda Motor Co. , Volkswagen AG and BMW AG —voluntarily signed an agreement with California to meet tougher emission requirements than those proposed by the Trump administration. The companies said the agreement is intended to show support for a single, nationwide vehicle-emissions standard.

Specifically, the auto makers agreed to improve average fuel efficiency by 3.7% annually from model years 2022 to 2026. They would get some credit toward that goal for selling electric vehicles.

Updated: 10-31-2019

White House Backing Off Proposed Fuel-Efficiency Freeze

Trump administration plans for annual efficiency increases of 1.5%; rule likely to come by year’s end.

The Trump administration is backing away from a plan to freeze tailpipe-emissions targets for new vehicles through 2025, say people familiar with the process.

The administration is now considering requiring a 1.5% annual increase in fleetwide fuel efficiency, using an industry measure that takes both gas mileage and emissions reductions into account, the people said. The target moves the number closer to the Obama-era rules calling for 5% gains but still provides auto makers with significant relief and would allow cars to emit more pollution.

The new final number for annual increases could change, as the rules remain under review, one of these people said. In addition, the administration’s number is expected to be challenged in court by California and other states, which favor tougher regulations.

President Trump has been trying for years to soften a set of stringent targets to reduce greenhouse gas emissions first agreed to in 2012 by the Obama administration, California and much of the automobile industry. The move to 1.5%—expected to be announced by year’s end—comes after intense industry lobbying, which opposed the Trump administration’s original plan to freeze targets at 2019 levels, around 37 miles a gallon.

The process has cleaved an auto industry traditionally united on emissions policy, with some companies siding with California and some with the White House over who should set the standards and what they should be.

California’s Air Resources Board said that a 1.5% annual increase wouldn’t be enough for the state to meet federal air quality standards.

A coalition of companies including General Motors Co. , Toyota Motor Corp. and Fiat Chrysler Automobiles NV filed Monday to intervene in a lawsuit over the standards, lending support to the Trump administration’s argument that the federal government set emissions targets. In July, Ford Motor Co. , Honda Motor Co. , Volkswagen AG and BMW AG agreed to recognize California’s authority to set its own targets, which would be more stringent than those proposed by the federal government and are followed by 13 other states.

“The Trump Administration is focusing on finalizing [its] rule which will deliver one national standard to the American auto market,” Environmental Protection Agency spokesman Michael Abboud said in response to questions.

The agency’s administrator, Andrew Wheeler, hinted last week in Detroit that the final rule would be more restrictive than the proposed freeze, in part because of industry feedback, but declined to provide details. He said the agency expects to publish the new requirements by year’s end and hoped they will appease both auto makers and California.

“I’m, again, the eternal optimist: Once everybody sees our final CAFE regulation, everybody will see that it makes sense and maybe we won’t have litigation on that part of it,” Mr. Wheeler said, referencing the acronym used for federal fuel efficiency standards.

A regulation satisfying all parties seems unlikely considering the long and contentious rule-making process so far. The administration first proposed freezing the Obama standards at their current levels in August 2018, triggering fears in the industry of disrupted product planning and prolonged uncertainty pending rulings by the courts.

Those anxieties pushed Ford, Honda, BMW and Volkswagen to strike their deals with California, people familiar with those companies’ thinking said. The move angered the White House, and the Justice Department has opened an investigation into whether the four companies violated antitrust statutes in negotiating with California.

In September, the administration moved to revoke California’s ability to set its own standard under a federal waiver granted through the Clean Air Act.

But the emissions targets themselves have been delayed, as the data analysis supporting the rule change has been redone, according to people briefed on the process.

The administration initially justified freezing the standards by arguing that improvements in technology have made new cars safer and that any emissions improvements would raise the prices of new cars. According to the analysis, people would consequently keep their older cars on the road longer, leading to increased deaths and injuries from crashes.

The initial analysis showed that the most social and cost benefit would come from eliminating the emissions-target increases entirely, a former EPA official involved in that effort said.

Opponents of the proposal have focused much of their criticism on the assumptions and data underpinning the administration’s analysis.

Since then, changes have been made in the modeling of the data that show room for an increase in the efficiency targets, people briefed on the matter said.

“It’s not as cut and dry anymore,” the former EPA official said.

Updated: 2-29-2020

Push To Roll Back Auto-Emissions Rules Hits A Roadblock

Friction between the federal agencies drafting the regulations threatens further delays, frustrating auto makers.

Two federal agencies are struggling to finish new rules to roll back auto-emissions regulations, according to auto industry lobbyists and government officials with knowledge of the process.

The Environmental Protection Agency and Transportation Department are clashing over the underlying rationale for the new regulations, which are aimed at reducing requirements set under the Obama administration, these people say.

The new rule will set requirements for tailpipe emissions and fuel economy for vehicles built through mid-decade. Administration officials hope to complete the rule by April 1, but are likely to miss that target, the people say. The delays could further prolong uncertainty for the auto industry, which is trying to lock in plans now for new models due out in the coming years.

The rule requires the agencies to produce hundreds of pages of technical analysis, explaining its predicted impact on everything from the environment to highway safety and the U.S. labor market.

Some EPA staff have challenged the DOT’s analysis and don’t feel the agency has had adequate say in how the new regulations are being crafted, some of the people say.

The National Highway Traffic Safety Administration, the DOT’s primary agency on auto regulations, has been charged with taking the lead on the rule, according to a senior White House official involved in the process. He defended the agency’s analysis.

This tension has left critical parts of the draft rule unfinished as the deadline nears and a lack of input from the EPA could make the rule vulnerable to legal challenges down the line, Sen. Thomas Carper, (D., Del.), warned in a letter sent Wednesday to the EPA’s inspector general.

Mr. Carper, a ranking Democrat on the Senate’s environmental policy committee and an opponent of the rollback effort, called on the agency’s inspector general to open an investigation into whether the rule-making process is being conducted properly and transparently, according to the letter viewed by The Wall Street Journal but not yet made public.

NHTSA said in a statement that it is working closely with EPA and expects the rule to be published soon but declined to elaborate further. The EPA, in a statement, said it is focused on working with NHTSA to ensure the rule is completed.

The White House deferred comment to EPA, NHTSA and the Office of Management and Budget, which is overseeing the rule’s final review. A spokesman from the budget and management office declined to comment, citing its policy of not commenting on rules under review.

Car executives say the uncertainty has left them in limbo, not knowing if they should engineer cars for the stricter Obama-era rules, the easier standards favored by the Trump administration, or somewhere in between. They fear the prospect of having to develop separate versions of the same model for different parts of the country. California has a waiver under the Clean Air Act to set its own auto-emissions requirements separate from the federal mandates, and those rules are followed by 12 other states.

“You can’t do business that way. It’s just ludicrous,” said Steve Center, head of U.S. sales at Honda Motor Co. in a recent interview.

Absent clarity, many auto makers are trying to put in contingency plans for different scenarios, said Brett Smith, director of technology at the Center for Automotive Research in Ann Arbor, Mich. “If you aren’t ready, you’re going to be in a lot of trouble,” he said.

The interagency strife is the latest obstacle in the now yearslong push by the Trump administration to weaken environmental regulations for the U.S. auto industry set under the Obama administration and agreed to by most auto makers and California in 2012.

That effort began shortly after car companies asked President Trump to revisit the rules agreed to under President Obama, which called for a 5% annual greenhouse-gas reduction.

Within days of him taking office, auto executives met with Mr. Trump, arguing they needed relief because the current requirements were out of sync with what many customers were buying, namely bigger, less fuel-efficient trucks and SUVs. But the effort has now stretched on for nearly three years and divided the auto industry over how to respond with some car companies advocating for stricter mandates than proposed by the administration.

In August 2018, the Trump administration proposed freezing the current regulations altogether at 2019 levels. His administration has since settled on a less-drastic cut, mandating car companies reduce greenhouse-gas emissions by 1.5% each year, people close to the process have told the Journal.

White House officials have argued the rollback would save lives by reducing prices for new cars with more safety features. But the auto industry worried it was too drastic and would be struck down in court.

Last summer, Ford Motor Co., Honda Motor Co., Volkswagen AG and BMW AG agreed with California, to meet 3.5% annual targets in reducing emissions in hopes of striking an industry-driven compromise. The move angered the White House. The Justice Department opened an antitrust investigation into the four auto makers, which has since been dropped, and Trump administration officials accelerated efforts to revoke California’s ability to set the standards.

In October, General Motors Co., Toyota Motor Corp., Fiat Chrysler Automobiles NV and other auto makers sided with the Trump administration in a lawsuit over California’s mandates arguing the federal government alone should set emissions regulations.

Those auto makers and others that haven’t sided with California met with officials from EPA, NHTSA and the OMB to discuss it last week. Industry executives at the meeting stressed their desire for a robust rule that will provide certainty for their new-model planning moving forward, according to two people briefed on the meeting.

Updated: 5-27-2020

States Sue Trump Administration Over Easing of Auto Standards

Lawsuit argues March action by administration violated law and was based on faulty analysis.

A coalition of 23 states filed suit Wednesday against the Trump administration’s March easing of tailpipe-emissions standards, arguing that it violated the law and was based on faulty analyses.

The Environmental Protection Agency and National Highway Transportation Safety Administration in March significantly cut back on clean air rules for cars, including increased mileage standards, that were put in place by the Obama administration in 2012 with the aim of reducing greenhouse-gas emissions and improving fuel efficiency.

The Trump administration argued that its new rule would boost car sales and save consumers money by cutting the sale price of new cars by about $1,000. The move was criticized at the time by environmentalists.

The White House and the Justice Department didn’t immediately respond to a request for comment about the lawsuit. Most of the states backing it are led by Democratic governors, including California, Michigan, New York and Colorado. The suit was also backed by the District of Columbia, the cities of New York, Los Angeles, Denver and San Francisco, and the counties of Denver and San Francisco.

California Attorney General Xavier Becerra called the rule a “job-killer and public health hazard.”

“It will increase costs to consumers and allow the emission of dangerous pollutants that directly threaten the health of our families,” said Mr. Becerra, a Democrat who is battling the Trump administration in court over a variety of issues, including environmental regulation, immigration and health care.

The states argue in their suit that the Trump administration relied on an error-prone analysis that included omissions to justify the rule change, particularly in asserting that the changes would save consumers money over time, according to some of the attorneys general involved. The suit also argues that the rule violates federal requirements to reduce air pollution and increase vehicle efficiency, they said.

The Alliance for Automotive Innovation, the trade group representing the industry in Washington, hasn’t yet seen the lawsuit but will review it, a spokesman said.

The emissions issue has divided the auto industry during Mr. Trump’s tenure. Car executives long believed that the Obama-era rules were too stringent and not achievable during a protracted period of low gas prices, and lobbied the administration early on to roll back the standards.

But an earlier Trump administration plan to essentially freeze fuel-efficiency standards at 2020 levels, without requiring annual improvements, went further than many in the auto industry had expected. Some executives worried that watered-down U.S. standards would be out of step with more-stringent rules in China and Europe, complicating their vehicle-planning efforts.

General Motors Co., Toyota Motor Corp. and most other major car companies warmed to the final rule, which calls for 1.5% annual fuel-economy gains.

But another group, including Ford Motor Co. and Honda Motor Co., settled on a middle ground, voluntarily agreeing with California to meet standards that are stricter than the Trump administration’s proposal, but looser than the Obama-era ones. BMW AG , Volkswagen AG and Volvo Cars also are part of that group.

Updated: 9-24-2020

California To Ban Sales Of New Gas-Powered Cars Starting In 2035

Governor says widespread adoption of zero-emission vehicles will reduce greenhouse-gas emissions and help to combat climate change

California Gov. Gavin Newsom signed an order Wednesday that aims to end the sale of new gasoline and diesel-powered passenger cars in the state by 2035.

It is an ambitious attempt to bolster electric vehicles in the largest car market in the U.S., as well as a bid to tackle emissions that most scientists say contribute to climate change. Transportation is responsible for more than half of carbon pollution in California, the governor said.

More than 11% of all light vehicles in the U.S. last year were registered in California, according to IHS Markit.

California is the first state in the nation to commit to such a goal, but could serve as a spark for other left-leaning states to follow, given its size and historic leadership on regulatory issues.

Seventeen countries including France, the U.K. and Germany have adopted goals to phase out internal combustion passenger cars, according to the International Council on Clean Transportation, a nonprofit that supports decarbonizing fuels.

Through July, 6.2% of light vehicles registered in California were electric powered and 1.6% in the entire U.S., according to IHS Markit.

“Of all the simultaneous crises that we face as a state…none is more forceful than the issue of the climate crisis,” Mr. Newsom, a Democrat, said while standing in front of several electric cars. “What we’re advancing here today is a strategy to address that crisis head on, to be as bold as the problem is big.”

The order also says that, “where feasible,” medium- and heavy-duty vehicles such as trucks and construction equipment should be zero-emission by 2045.

Mr. Newsom has emphasized climate change as a key cause of the historically disastrous fires that have ravaged the state in the past month. Scientists have said California has become more susceptible to fast-moving, destructive wildfires due in part to a warmer climate, which causes trees and plants to dry out and become more flammable, as well as overgrown forests and an increase in housing in fire-prone areas.

The announcement spurred criticism from the Trump administration. “This is yet another example of how extreme the left has become,” said White House spokesman Judd Deere. “They want the government to dictate every aspect of every American’s life, and the lengths to which they will go to destroy jobs and raise costs on the consumer is alarming. President Trump won’t stand for it.”

The Trump administration is already waging a legal battle against California over its special authority to regulate tailpipe emissions, established under the Clean Air Act of 1970. The case is currently before a federal appeals court in Washington, D.C.

California’s authority to enforce Mr. Newsom’s new mandate would come from that same part of the law, likely making it highly dependent on the outcome of November’s presidential election, said Bob McNally, a former energy adviser to then-President George W. Bush who is now a private energy consultant.

If Mr. Trump’s nominee to replace Ruth Bader Ginsburg is confirmed and he remains in office and challenges the order, a conservative majority on the Supreme Court could potentially strike down the California program, Mr. McNally said. If Mr. Biden wins, he likely wouldn’t proceed with a case, he said.

In a sign that left-leaning states might follow California’s lead on ending the sale of gas-powered vehicles, Oregon Gov. Kate Brown praised Mr. Newsom’s announcement. “I will do all I can to accelerate electrification here,” the Democrat wrote on Twitter.

John Bozzella, chief executive of the Alliance for Automotive Innovation, a trade group that represents major U.S. and overseas-based auto manufacturers, said his members are committed to expanding their electric-vehicle offerings, but mandates like the one issued by Mr. Newsom aren’t the best way to do so.

“What builds successful markets is widespread stakeholder engagement,” among governments, auto makers, utilities, infrastructure providers and others, Mr. Bozzella said in a statement.

A spokesman for Ford Motor Co. said: “We agree with Gov. Newsom that it is time to take urgent action to address climate change….Progress requires public-private partnerships, smart infrastructure and key resources that encourage consumers to invest in electrified products.”

The order is aimed at new-car sales and won’t prohibit Californians from owning or selling existing gas-powered cars, Mr. Newsom said.

Brian Maas, president of the California New Car Dealers Association, said his organization respects Mr. Newsom’s ambitions to combat climate change, but has several concerns, including the need to greatly expand public charging infrastructure and to drive down costs of zero-emission vehicles so they aren’t available only to the wealthy.

He also said that enacting such a sweeping piece of policy through an executive order, without legislative approval, was “deeply troubling and deprives Californians of a direct voice in this important issue.”

The leaders of both houses of California’s Democratic-dominated Legislature said Wednesday they support Mr. Newsom’s executive order.

“The Assembly looks forward to working with him to pass the necessary legislation to make this bold step land solidly,” Assembly Speaker Anthony Rendon said in a statement.

The California Air Resources Board, which has been at the center of most of the state’s climate and vehicle emissions policies, will be charged with developing the specific regulations needed to implement the state mandate for passenger cars and trucks.

A shift from petroleum products, such as gasoline and diesel, to electricity will require a new statewide charging infrastructure, and could impact the viability of the state’s thousands of gasoline stations. And it will need to upgrade a grid already in need of significant overhaul.

The state’s electricity grid experienced two days of rolling blackouts last month during a heat wave. The state’s largest utilities now routinely shut off large sections of their aging grids to stop their power lines from sparking wildfires on windy days.

Electric vehicles don’t have any tailpipe emissions of greenhouse gases. However, the electricity used to charge these vehicles can be generated with fossil fuels. California has taken strides in recent years to use more wind, solar, geothermal and other renewable resources. The state adopted a law in 2017 to reduce its greenhouse gas emissions by at least 40% by 2030 and 80% by 2050, from a 1990 benchmark.

This isn’t the first time the state has tried to push electric vehicles. A 1990 mandate required 2% of new cars sold in California by 1998 be zero-emission vehicles. At the time, there were only a couple models available that complied, General Motors’ EV1 and Honda’s EV Plus. Both cars were small and had limited ranges. The mandate was unsuccessful.

“What’s different this time is technology and product availability,” said Michael Wara, director of the Climate and Energy Policy Program at Stanford University’s Woods Institute. “There are products on the market that people want to buy.” Tesla’s Model 3 is one of the bestselling passenger cars in California and several car companies have released new electric models.

Mr. Newsom signed the executive order on the hood of an electric Ford Mustang Mach-E, which is expected to be available for sale later in 2020 or early 2021.

Bans on sales of new internal combustion engines have been spreading across Europe over the past couple of years.

The first was in Norway, which in 2017 enacted a target that all new passenger cars and light vans have no carbon emissions beginning in 2025. Several other European countries followed, including France that has a 2040 goal for ending sales of fossil-fuel powered vehicles.

The U.K. set a 2040 goal to eliminate internal combustion engines as well as hybrids, but earlier this year moved that up by five year to 2035. Canada has also passed a target of 100% electric vehicles by 2040, according to the International Council on Clean Transportation, a nonprofit that supports decarbonizing fuels.

Drew Kodjak, executive director of the group, said Mr. Newsom’s order went a step beyond what has come out of Europe because it includes trucks and construction vehicles.

“No other country in the world has been setting dates for heavy duty trucks and every piece of on-road combustion equipment,” he said. “This is ambitious”

Updated: 9-27-2020

California Wants Cars To Run On Electricity. It’s Going To Need A Much Bigger Grid

The state has recently struggled with rolling blackouts due to tight power supplies. Going all electric in 15 years will dramatically increase electricity demand.

Leaning on the hood of a shiny red electric Ford Mustang, California Gov. Gavin Newsom signed an executive order Wednesday to end the sale of new gas-burning cars in his state in 15 years.

Now comes the hard part.

Energy consultants and academics say converting all passenger cars and trucks to run on electricity in California could raise power demand by as much as 25%. That poses a major challenge for a state already facing periodic rolling blackouts as it rapidly transitions to renewable energy.

California will need to boost power generation, scale up its network of fast charging stations, enhance its electric grid to handle the added load and hope that battery technology continues to improve enough that millions in America’s most populous state can handle long freeway commutes to schools and offices without problems.

“We’ve got 15 years to do the work,” said Pedro Pizarro, chief executive of Edison International, owner of Southern California Edison, a utility serving 15 million people in the state. “Frankly the state agencies are going to have to do their part. We’ve got to get to the permitting processes, the approvals; all of that work is going to have to get accelerated to meet [Wednesday’s] target.”

Switching from petroleum fuels to electricity to phase out the internal combustion engine won’t happen all at once—Mr. Newsom’s order applies to sales of new vehicles, so older gas-powered cars will be on the road in California for many years to come. But the mandate means the state will face a growing demand for megawatts.

California is already facing a shortfall of power supplies over the next couple of years. The problem was highlighted last month when a heat wave blanketed the western U.S. and the state’s grid operator instituted rolling blackouts on two occasions.

“It is too early to tell what kind of impact the order will have on our power grid, and we don’t have any specific analysis or projections,” said Anne Gonzalez, a spokeswoman for the California Independent System Operator, which runs the grid.

Currently, California faces a crunchtime in the early evening as solar power falls off and demand to power air conditioners remains relatively high. Car charging presents a new potential issue: What happens when too many drivers want a high-energy, fast charge at the same time?

Caroline Winn, the chief executive of San Diego Gas & Electric, a utility owned by Sempra Energy that serves 3.6 million people, said there will need to be rules and rates that encourage people to charge their cars at certain times of the day. The utility’s region consistently has excess energy during the middle of the day, she said. If consumers were incentivized to charge then, or overnight, it would reduce the costs of reaching the goal.

“We need to get the rules right and the markets right in order to resolve this issue because certainly California is moving that way,” she said.

The grid will need to be upgraded to prepare for millions of new electric vehicles. The majority of people who own them usually charge them at home, which would mean changes to substations and distribution circuits to accommodate multiple homes in a neighborhood drawing power to fill up batteries. The state’s three main investor-owned utilities are spending billions of dollars to harden the grid to prevent power equipment from sparking catastrophic wildfires.

“We have a hell of a lot of work to do nationally. California is ahead of everybody and they have a hell of a lot of work to do,” said Chris Nelder, who studies EV-grid integration at the Rocky Mountain Institute, an energy and environment-policy organization that promotes clean-energy solutions.

Mr. Nelder believes the investment will be worth it, because internal combustion engines generate so much waste heat and emissions of uncombusted hydrocarbons that escape out of tailpipes. Improving energy efficiency by upgrading the electrical system could result in lower bills for customers. “We will eliminate a vast amount of waste from the energy system and make it way more efficient,” he said.

Some see the growth of electric vehicles as an opportunity more than a challenge. In the afternoon, when electricity demand is high but the sun is setting and solar power drops off quickly, batteries in passenger cars, buses and other vehicles could release power back into the electric grid to help stabilize it, said Matt Petersen, chairman of the Transportation Electrification Partnership, a public-private effort in Los Angeles to accelerate the deployment of electric vehicles.

The idea is known as “vehicle-to-grid” and has been discussed in a number of countries expanding EV use, including the U.K. and Denmark.

“We end up with rolling batteries that can discharge power when needed,” Mr. Petersen said, adding, “The more electric vehicles we add to the grid, the more renewable energy we can add to the grid.”

One big hurdle for the widespread deployment of electric cars is driving down the cost of batteries to make the cars more affordable. This week, Tesla Inc. Chief Executive Elon Musk said he expected to have a $25,000 model ready by about 2023.

Shirley Meng, director of the Sustainable Power and Energy Center at the University of California, San Diego, said she believed batteries would continue to provide better performance at a lower cost.

“I am confident the battery technology is ready,” she said. Costs are expected to fall as new kinds of materials and metals can be used in the underlying battery chemistry, dropping prices. “Batteries are good now, and they will be better in the next 10 years.”

John Eichberger, executive director of the Fuels Institute, a nonprofit research group launched by the National Association of Convenience Stores, said he hoped that the California Air Resources Board, which is tasked with developing new rules to implement Mr. Newsom’s order, will slow the timeline if the market and electric build-out is running behind.

“We need to think about these critical infrastructure issues because transportation is not optional,” he said. “How do we develop a system that can guarantee consumers that they can get the energy when they need it?”

Updated: 4-22-2021

Biden Administration Moves to Unwind Trump Auto-Emissions Policy

The U.S. will end its fight with California, setting the stage for stricter regulations.

The Biden administration is moving to end a legal battle with California over the state’s authority to regulate motor-vehicle emissions, setting the stage for stricter regulations on the auto industry, according to people briefed on those plans.

Administration officials could announce their first steps as early as Friday, these people said, as President Biden concludes a two-day international summit via videoconference to address climate change. It would be the latest in a series of efforts to unwind Trump administration policies that eased environmental rules.

California, the nation’s biggest car market, has long set emissions standards that exceed requirements set by the federal government, an exception that was allowed under a waiver to the Clean Air Act. As a result, California’s standards became the de facto national standard.

That became a source of conflict during the Trump years as auto makers asked the Trump administration for relief from a deal the Obama administration negotiated with California and the industry to increase fuel-economy standards.

The Trump administration moved to relax the Obama standards, saying easing the regulations would lower consumer costs and boost auto sales. To do it, the administration’s Transportation Department adopted a new policy that said California didn’t have the legal authority to set its own fuel-economy standards. The move kicked off a long legal battle that auto makers worried would complicate their planning for future models.

Mr. Biden’s Transportation Department will first move to undo that decision, possibly as soon as Friday, the people said. That would mean withdrawing its legal defense against a suit from California, 22 other states and the District of Columbia that had sued the Trump administration to preserve California’s power.

Auto companies like General Motors Co. , Toyota Motor Corp. and Stellantis N.V. initially sided with the Trump administration in the lawsuit, arguing that the standards should be set by federal regulators. Those companies withdrew their support in the wake of Mr. Biden’s election.

The Biden administration has made stronger regulations on car makers central to the president’s agenda for reducing greenhouse-gas emissions, which contribute to climate change. Passenger vehicles account for roughly 16% of such emissions, according to the Environmental Protection Agency.

After the Transportation Department reverses its challenge to California’s authority, the EPA is expected to follow with its own new policies as soon as next week, the people said. The likely outcome is to reinstate California’s authority to set its own rules.

The White House and the EPA declined to comment. The Transportation Department didn’t immediately respond to a request for comment.

Mr. Biden signed an executive order on his first day as president that called on federal agencies to review a series of Trump administration environmental rules. The order mandated that the government review Mr. Trump’s efforts to relax more stringent emissions regulations set by his predecessor, including the rule revoking the waiver allowing California to set its own standards.

The Trump administration also eased tailpipe-emissions standards nationwide, saying the move would boost car sales and lower new-car prices.

Those rules require auto makers to achieve 1.5% annual increases in fleetwide fuel efficiency through 2026, using an industry measure that takes both gas mileage and emissions reductions into account. That requirement is down from a 5% annual increase in efficiency mandated by the Obama administration. It has been under court challenge from several states and environmental groups.

California, through its Air Resources Board, had been working to craft a compromise between the Obama-era standards and a Trump rollback, agreeing with several auto makers on a state-based framework. That deal was to increase efficiency by 3.7% annually from model years 2022 to 2026.

The Biden administration is considering new rules that would codify those requirements nationwide, two of the people said.

Through its orders, the White House has set a July timetable for proposing a new rule that would re-raise the standards. The process to set those standards will accelerate in the weeks to come as the agencies push to get a proposal to the White House for review, probably by June, the person said.

The Biden administration’s new moves on vehicles come as the president is hosting 40 world leaders later this week for a virtual summit on climate change. During the event, Mr. Biden is expected to unveil a new climate change target that calls on the U.S. to lower its emissions 50% below 2005 levels by 2030.

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