California’s clean energy rules have pushed major automakers to cut vehicle pollution. Five big car companies signed deals with California’s Air Resources Board, known as CARB, back in 2020. Those companies were BMW, Ford, Honda, Volkswagen, and Volvo. Stellantis reportedly joined in 2024. Together, they’ve agreed to reduce greenhouse gas emissions from their vehicles through 2026.
Six major automakers have committed to cutting vehicle emissions under binding agreements with California’s Air Resources Board.
The agreements require each company to cut fleetwide emissions by about 3.7% every year. That’s less strict than California’s original 4.7% plan, but it’s still tougher than what the federal government requires. Companies can meet these targets by selling more fuel-efficient cars, hybrids, and electric vehicles.
These deals cover vehicles sold in California and in other states that follow California’s rules, called Section 177 states. That means the agreements affect a large chunk of the U.S. market. The original four automakers alone represent about 30% of U.S. car sales.
The federal government’s role has shifted back and forth. In 2019, the Trump administration took away California’s right to set its own vehicle emission rules. The Biden administration gave that right back. Congress revoked California’s Clean Air Act waiver in early 2025 using the Congressional Review Act, though California challenged the action as illegal. Despite those changes, the agreements between CARB and the automakers are still legally binding contracts. The SAFE Rule required only a 1.5% annual increase in stringency for model years 2021 through 2026, far below the 5% annual increase required under the Obama administration. EPA Administrator Lee Zeldin has also stated his intent to repeal the endangerment finding, which serves as the legal foundation enabling federal climate regulation of motor vehicles.
California also adopted stricter long-term rules in 2022 called Advanced Clean Cars II. Those rules would require all new passenger cars sold in California to be zero-emission by 2035. But those rules need a federal waiver to apply outside California, and that waiver’s future is uncertain.
CARB also runs a voluntary program called Drive Forward Leaders. It recognizes automakers that certify an estimated 90% or more of their 2026 passenger vehicle production to California’s toughest standards. That includes new LEV IV rules for smog-causing pollutants and stricter electric vehicle requirements.
Stellantis reportedly faces specific electric vehicle sales targets for 2026 and 2027, with more discussions planned for 2028 through 2030. The company is said to have a clause allowing adjustments if meeting targets causes serious competitive harm. Even so, California’s standards are shaping what automakers build across the country.
References
- https://www.bdlaw.com/publications/major-automakers-finalize-framework-agreements-on-clean-cars-with-california/
- https://www.carpro.com/blog/six-automakers-still-bound-by-california-emission-laws
- https://www.cbtnews.com/california-emissions-rules-changed-everything-but-screwed-six-carmakers/
- https://ww2.arb.ca.gov/our-work/programs/drive-forward-light-duty-vehicle-program/drive-forward-leaders
- https://ww2.arb.ca.gov/our-work/programs/drive-forward-light-duty-vehicle-program/advanced-clean-cars
- https://www.nrdc.org/bio/kathy-harris/clean-car-rules-what-they-mean-states
- https://blog.ucs.org/dave-reichmuth/what-the-auto-industry-isnt-telling-you-about-californias-clean-vehicle-rules/
- https://eelp.law.harvard.edu/looking-forward-from-californias-historic-agreement-with-automakers/
- https://www.youtube.com/watch?v=0IfaAtAdKtg
