Stellantis NV, owner of the Jeep and Ram brands, agreed to California's strict rules to promote electric vehicles in a deal that could protect the state's clean car campaign from attack by a potential Trump administration.
The California Air Resources Board, which regulates emissions in the country's most populous state, said the agreement would see the automaker cut emissions through the 2026 model year. The company also agreed to comply with the state's requirement that zero-emission vehicles account for an increasing share of vehicle sales in the state through 2030, even if that policy is challenged in the future, the agency said in a statement.
The agreement represents a stunning turnaround for Stellantis, which along with companies like General Motors and Toyota Motor Co., rolled back state emissions rules during former President Trump's administration.
For California policymakers, it could serve as a bulwark if Trump is re-elected in November. While in office, Trump moved to strip California of its right to set its own rules under the Clean Air Act.
Trump, who has been a relentless critic of President Biden's pro-electric vehicle policies, said he would end what he calls the president's “electric vehicle mandate.” Last Thursday, the Trump campaign announced that the former president “saved the auto industry,” while “Biden’s crazy mandates on electric cars will completely destroy it.”
As part of the agreement, Stellantis will comply with California's electric vehicle mandates even if the policy cannot be enforced “as a result of judicial or federal proceedings,” according to a statement from Democratic Gov. Gavin Newsom's office.
“This agreement is a big deal in accelerating and enhancing our efforts,” Newsom said in a conference call with reporters.
In addition to adhering to the same framework as its peers, Stellantis will invest $10 million in public charging infrastructure in California and other states that follow their own emissions rules. It will also offer discounts on new cars in underserved communities.
In return, the automaker would have an easier path to meeting California's requirements. Stellantis sales of hybrid and electric vehicles in all 50 states can now count toward meeting state requirements. Previously, the company was only able to count deliveries in California and more than a dozen other states have adopted the standards.
The agreement comes as the Biden administration prepares to finalize the toughest restrictions ever on pollution from American cars and light trucks after making changes that are likely to mollify some automakers.
Stellantis, which was formed from the 2021 merger of Fiat Chrysler and France's PSA Group, has struggled hard to comply with California's emissions requirements. The industry has long been a laggard in fuel economy, and it restricted sales of gas-powered vehicles in California and several other states last summer to avoid conflicting with the state's electric vehicle requirements. It later blamed California rules when it laid off hundreds of workers at a Jeep plant in Toledo, Ohio.
Stellantis now joins other automakers including Ford Motor Co. BMW AG and Volkswagen AG have reached similar agreements with the state, which had previously petitioned to invalidate them.
In October, Stellantis alleged that California “improperly adopted” those agreements in 2019, which allowed manufacturers to voluntarily increase the average fuel economy of their fleets to about 50 miles per gallon by the end of the 2026 model year. Stellantis then said it tried to join the deal, but was rejected by the California Air Resources Board.
Carlos Tavares, CEO of Stellantis, said in a statement that the agreement is a “win-win solution that is good for the customer and good for the planet.”
