Ford, BMW, Honda & VW Sign agreement with California

5 reputed automakers collaborated and signed an agreement with California that would require them to abide by the state vehicle emission standards.

The rules to save fuel are stricter than those of federal rules leaving the state to disagree with the Trump government.

BMW, Honda, Volkswagen, and Ford agreed to follow California’s standards back in July 2019 same as Volvo did in March.

The deal signed this week with the state means they have to follow those standards.

The director of government affairs & sustainability at VW owned Audi (America) – Spencer Reeder told the New York Times, that initially we took it voluntarily, but now it’s obligatory and imposed.

The 5 major auto companies constitute 30% of the automobile market in the US and as per the rules set by California; they will have to enhance their vehicles fuel economy from the existing average which is 38 miles/gallon to nearly 51 miles/gallon by 2026.

However, this spring, the Trump government brought in the regulations from the Obama era. This rule would require the vehicles to maintain the average fuel economy of vehicles to 54.5 miles/ gallon by 2025. This means they just need to meet the standards of average 40 miles/gallon.

Also, the administration was requested to avoid states from deciding their individual emissions standards.

California got a refusal from the Environmental Protection Agency to decide its guidelines but it was canceled by the agency in September.

In September only the Department of Justice started an antitrust investigation against the 4 companies that initially agreed to follow the guidelines from California. Though, in February the investigation was shut down.

In case Joe Biden wins the presidential election this time, he would request to bring back the emission rules followed during Obama’s government. Irrespective of Donald Trump or Biden win the White house elections, those 5 automakers will have to follow California’s standards.

The companies have committed nationwide selling fuel-efficient vehicles and efficient enough to reduce emissions required by federal regulations.
This will be easier to manufacture cars that would abide by the same set of standards rather than breaking the market. Along with New York & Washington, 13 other states also abide by California’s standards and would implement the binding agreement.

In the meantime, a lawsuit is in the process that requests to halt the government’s federal pushback and ensure that states proceed to decide their own strict rules. It seems the case would be finally handled by the Supreme Court.