Biden administration proposes to reinstate California authority to set tougher emissions rules
Biden administration proposes to reinstate California authority to set tougher emissions rules
Audrey LaForest
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DETROIT The National Highway Traffic Safety Administration has proposed to withdraw its portions of a Trump-era rule that sought to block states including California from setting their own greenhouse gas emissions standards and zero-emission vehicle mandates, the Department of Transportation said March 22.
The action is a first step by the Biden administration to reinstate California s authority to restrict tailpipe emissions and set ZEV mandates, following President Biden s executive order in January, which directed the Transportation Department and the Environmental Protection Agency to reconsider by April the Trump administration s 2019 decision to revoke the state s authority.
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Electric vehicles will generate far less service revenue than gas cars over their life expectancy.
Tesla and other sellers of electric-only cars are bypassing dealers, selling directly to customers.
Advanced safety technology in EVs is reducing crashes and the revenue from repairs.
The transition to electric and advanced technology vehicles is poised to upend the auto dealer landscape, erode profit margins, and spark a massive industry consolidation. The impact on the current auto dealer business model will be quite profound, Adam Jonas, the auto and shared mobility analyst at Morgan Stanley Research, wrote in a March 10 investor report.
There are about 16,600 new vehicle dealers in the US. Combined, they do about $1 trillion (CQ) in annual sales and have 1.1 million employees, according to the National Automobile Dealers Association.
EV startups like Rivian and Lucid are joining the fight.
The years-long battle between franchised automotive dealerships and their powerful lobbyists against Tesla and newer electric vehicle startups like Rivian and Lucid is back in the news as 11 states are now considering legalizing direct sales. The only way to buy a new Tesla Model S or Rivian R1T, to name just two examples, is directly from the company instead of a franchised dealership.
Dealerships argue that customers benefit from privately owned dealers for a number of reasons, among them pricing competition, warranty repairs, and helping local economies. Electric vehicle brands say consumers receive the same necessary basic services and transparent pricing. Equally important, things like over-the-air updates and other software-related services that EVs require can be done more efficiently in a direct manufacturer-customer relationship.
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The Illinois car dealer lawsuit against electric automaker Rivian is the latest chapter in a nationwide debate over the options consumers have to buy cars.
Many states, including Illinois, have laws to restrict new car sales to independent dealers. University of Michigan law professor Daniel Crane said those are a product of the days the Big Three manufacturers Ford, General Motors and Chrysler dominated car sales, as opposed to the variety of automakers that exist now.
“They had disproportionate bargaining power vis-a-vis their franchise dealers, said Crane. You had just the Big Three, dealers were mostly mom and pop organizations, and the argument that dealers made was that the Big Three were taking unfair advantage of them.”