This is a small negative for Tesla…
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Talks end with California on emmissions (Automotive News)
- The US federal administration has formally ended its talks with California over federal plans to roll back fuel economy rules.
- Previously, California has been able to set tougher emissions standards, under an exception granted by the EPA.
- This breakdown in talks is expected to result in around 13 states taking the fight to the court system, with the federal government expected to finalise rule changes later this year.
- The federal government has justified its stance as being about “promoting more affordable vehicles”.
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- One of the drivers of EV demand has been the tougher rules on vehicle emission, which has made making compliant vehicles powered by petrol or diesel more expensive.
- Clearly, the court battle, should it happen, will take some time to resolve. In the meantime we expect California and the other 12 states to continue with their higher standards.
- In the short term we expect little impact on EV sales in the US – which are now dominated by Tesla. However, if these rule changes are enacted, the longer term impact could be to slow EV adaption.
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