With the Trump administration's final rollback of federal fuel-efficiency requirements, the U.S. government no longer has any meaningful policy governing carbon pollution from cars, which account for roughly 16 percent of national greenhouse gas emissions. That leaves California's vehicle emissions rules as the most important government policy on car emissions in the country. The state's standards remain in effect and effectively set a floor for fuel efficiency that automakers cannot fall below without risking penalties.
California's authority comes from a half-century-old Clean Air Act exemption, granted after the state struggled with severe smog in the 1950s. While California cannot directly mandate fuel economy, its emissions standards have a similar effect because cutting gasoline consumption is the main way to reduce tailpipe carbon. Nineteen other jurisdictions, including the District of Columbia, have adopted California's rules, covering 40 percent of U.S. new car sales in 2022. The Trump administration has tried to strip that authority: Congress voted to block California's 2035 gas-car phaseout, and the administration asked lawmakers to overturn the state's current standards. A federal judge blocked that latter effort in early September.
Automakers have largely stayed silent on how they will respond to the regulatory whiplash. Market signals are mixed: hybrids reached a record 16 percent of passenger vehicle sales by the summer of 2026, and some executives say they remain committed to EVs. "We're in for the long haul," General Motors president Mark Reuss said this week at a conference. But market dynamics alone aren't expected to deliver the rapid emissions cuts needed to address climate change, and the fate of California's stricter rules will likely be decided in court.