In a letter last month, 17 worldwide automakers appealed to the White House and California to work together on a single national standard, warning of uncertainty for the auto market and noting that auto industry jobs are at stake. On July 25, four of these companies—Honda, Ford, BMW, and Volkswagen—established an agreement with California to follow a framework that includes annual emission reductions and would speed the transition to electric vehicles.
The framework would curtail greenhouse gas (GHG) emissions of the four companies’ vehicles in model years 2022-0 2026. The framework changes the original year-over-year 4.7% GHG reduction over four years to 3.7% over five years, making the same overall improvements over a one-year-longer term compared to the current national standards. The framework supports the transition to electric vehicles by rewarding companies that sell more EVs with additional credits to meet the GHG standard for their entire fleet, while ensuring that gas and diesel vehicles also get progressively cleaner over time. It provides an incentive to car companies to install more GHG-reducing technologies by modestly revising limitations on their usage, and streamlining agency review and approval for new technologies. In addition, it simplifies compliance by removing the requirement to consider upstream GHG emissions associated with the production of the electricity used by electric vehicles when calculating the GHG emissions for a car maker’s fleet.