US Markets

California to stop buying GM, Toyota and Fiat Chrysler vehicles over emissions fight

Credit: REUTERS/ANDRES MARTINEZ CASARES

California said on Monday it will halt all purchases of new vehicles for state government fleets from GM, Toyota and Fiat Chrysler and other automakers backing President Donald Trump in a battle to strip the state of authority to regulate tailpipe emissions.

By David Shepardson

WASHINGTON, Nov 18 (Reuters) - California said on Monday it will halt all purchases of new vehicles for state government fleets from GM, Toyota and Fiat Chrysler and other automakers backing President Donald Trump in a battle to strip the state of authority to regulate tailpipe emissions.

Between 2016 and 2018, California purchased $58.6 million in vehicles from General Motors Corp GM.N, $55.8 million from Fiat Chrysler Automobiles FCHA.MI $10.6 million from Toyota Motor Corp 7203.T and $9 million from Nissan Motor Co 7201.T.

Last month, GM, Toyota, Fiat Chrysler and members of the Global Automakers trade association backed the Trump administration's effort to bar California from setting tailpipe standards, which are more rigid than Washington's proposed national standards.

The automakers declined or did not immediately comment on California's announced ban on purchases of their vehicles.

Starting in January, the state will only buy from automakers that recognize California's legal authority to set emissions standards. Those automakers include Ford Motor Co F.N, Honda Motor Co 7267.T, BMW AG BMWG.DE and Volkswagen AG VOWG_p.DE, which struck a deal with California in July to follow revised state vehicle emissions standards.

"Car makers that have chosen to be on the wrong side of history will be on the losing end of California’s buying power," California Governor Gavin Newsom said in a statement.

California purchased $69.2 million in vehicles from Ford over the three-year-period, $565,000 from Honda and none from the German automakers.

The state also disclosed it will immediately no longer allow state agencies to buy sedans powered by an internal combustion engine, with exemptions for certain public safety vehicles.

California's vehicle rules have been adopted by 13 other states.

On Friday, California and 22 other U.S. states challenged the Trump administration's decision to revoke California's legal authority to set vehicle tailpipe emissions rules and require a rising number of zero emission vehicles (ZEV).

The move follows a separate lawsuit filed in September by the states against the National Highway Traffic Safety Administration seeking to undo a parallel determination.

In August 2018, the Trump administration proposed freezing fuel efficiency requirements at 2020 levels through 2026, reversing planned 5% annual increases.

The Trump administration’s final requirements are expected in the coming months and are set to modestly boost fuel efficiency versus the initial proposal, with several automakers anticipating annual increases of about 1.5%. That would be much less stringent than the Obama rules.

CalMatters, a non-profit California journalism website, reported California's decision to stop buying some vehicles earlier.

(Reporting by David Shepardson; Editing by Tom Brown)

((David.Shepardson@thomsonreuters.com; 2028988324;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest US Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More