The American auto industry has historically been the epitome of American innovation, literally driving the country forward. But given a chance to lead anew, the industry is instead trying to give up without even trying. A recent memo from the Alliance for Automotive Innovation tries to say the sky is falling because of a critical policy—the Advanced Clean Cars II rule—that will put us on the road to zero-emitting vehicles.
Instead of crying about the challenges ahead, the automakers should get to work and deliver vehicles that Americans want. Zero-emission vehicles are the way the global industry is going—and it’s clear Americans increasingly want access to these cleaner cars. If automakers want to stay competitive, that’s the way the U.S. auto industry needs to go, too.
Purposefully Omitting Key Parts of the Regulation?
Advanced Clean Cars II (ACC II) is a key policy to help give the auto industry a clear, planned, and phased approach to helping with the transition towards cleaner and zero-emission vehicles. In addition to requiring that automakers make more electric and plug-in hybrid vehicles available for sale in states that choose to adopt the rules, it also makes sure that the emissions coming from gas vehicle tailpipes are cleaner and less toxic—which improves human health and air quality.
The automakers are claiming that achieving the goals of ACC II is an impossibility. But they are failing to highlight the portions of the regulation that make it feasible—the robust flexibilities built into the rule. While on paper, it appears that states must achieve 35% new vehicle sales by the 2026 model year, that’s not the reality. When the ACC II rule was under consideration, all parties recognized that states with high levels of ZEV sales would have an easier initial ramp towards full compliance than states with lower ZEV sales levels. To ease the transition, a number of flexibilities were incorporated into the rule. When the flexibilities built into ACC II are taken into account, we conservatively estimate that the sales needed in model years 2026, 2027 and 2028 will be about 26%, 33% and 40% respectively, rather than the 35%, 43% and 51% nominal levels stated in the regulation.
Lack of Innovation and Foresight is the Real Problem
Another flexibility to make the rules achievable is to purchase credits from other automakers that have achieved overcompliance with the regulations. The Auto Alliance makes it sound like it is California’s fault that Tesla and other ZEV-only manufacturers have a large number of credits that other manufacturers rely on to purchase for compliance.
But there was no magical dispensation granted to Tesla; the reality is that Tesla built vehicles that consumers wanted to buy, and the legacy automakers did not. Every one of those Tesla sales could have been a legacy sale if they had developed competitive vehicles. Although the legacy manufacturers are catching up, this is still the reality today.
Haven’t We Heard This Tune Before?
This story has been heard over and over again—automakers complain ad nauseum about how hard regulations are and how they are not achievable. But then, when push comes to shove, they are able to miraculously achieve the standards in place.
Automakers complained significantly about the previous iteration of this program, ACC I, which required automakers to achieve about 7-8% zero-emission vehicle sales by 2025.
But now, these targets were not only met but have been greatly exceeded (which helps to further bolster the flexibilities within the regulations).
What’s even more laughable about this situation is that throughout the development of the ACC II rules in California (and in every state that has since adopted the regulations), the Auto Alliance did not oppose the regulations and were in fact at the table when the rules were created. The time to make changes to the program was when it was proposed three years ago.
So What Happens if We Fall Behind?
The beauty of ACC II is that it holds U.S. automakers accountable to make sure we maintain our leadership globally as the world moves towards clean, zero-emission vehicles. If the U.S. automakers decide to not keep pace with the way the world is moving, we’ll see flashbacks to the 1990’s, when Japanese automakers reigned supreme, because the U.S. automakers did not want to innovate, and instead sent that innovation to other parts of the world.
ACC II is a pillar of federalism and allows for states to take a bold stance to address the air pollution in their states, improve human health, and address climate pollution. States withdrawing from this program would be ceding to other global interests, and ultimately just harm the U.S. auto industry as a whole.
But There is One Thing We Can Agree On
While most of the memo that the Alliance wrote is focused on all the problems, finally on the last page they provide an actual solution—to “double-down and make major EV investments and try to make the regulations achievable.”
Finally, some can-do spirit!
Luckily, there are billions of dollars of investments coming from the federal government (as well as states) that are helping to support the transition to zero-emission vehicles. So instead of trying to get states to pull out of the ACC II program, which by the way is the only way for states to ensure they can get the zero-emission vehicles that their drivers increasingly want to buy, the Auto Alliance would be better suited to make sure that the investments that they call for are not only maintained but increased.
