Strengthening American Leadership in Clean Cars and Trucks

Background

Before being revoked, the 2021 executive order under President Biden had significant implications for U.S. automotive law and regulation. It established a goal for 50% of new cars and light trucks sold in 2030 to be zero-emission vehicles. Agencies like the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) were instructed to begin rulemakings for new multi-pollutant emissions standards and fuel economy standards starting with model year 2027. These actions represented a considerable shift from existing regulations, which were less stringent regarding emissions and fuel efficiency benchmarks.

The directive also led to operational adjustments in federal agencies. The EPA and DOT were to work on aligning their regulations to explore synergies and prevent conflicting policies. This coordination extended to collaborating actively with states like California, which had a history of stringent emissions standards. These efforts were designed to ensure the U.S. automotive industry was not only adhering to national initiatives but also supporting state-led innovations in emissions reductions.

Social policy experienced a tilt towards environmental sustainability and public health through this order. By aiming for a reduction in greenhouse gas emissions and pollutants, the policy sought to decrease air pollution-related health issues. Furthermore, it envisioned economic benefits through job creation in the clean energy and automotive sectors, bolstering both blue-collar and white-collar employment. The integration of zero-emission vehicle technologies was poised to revolutionize transportation economics and had the potential to enhance energy security by reducing dependence on fossil fuels.

Reason for Revocation

The revocation of Biden's clean transportation order by President Trump in January 2025 could be attributed to an ideological shift emphasizing deregulation and energy sector revitalization. Trump's administration historically prioritized reducing federal oversight and promoting traditional energy industries like oil and gas. The revocation indicated a departure from policies considered burdensome by traditional automotive sectors in favor of less restrictive regulations.

Trump's leadership fostered a political ideology centering around economic growth without stringent environmental constraints. This agenda aimed to spur growth by alleviating perceived regulatory burdens on businesses, particularly in industries that had to adhere to strict environmental standards under Biden. The revocation can hence be seen as part of broader policy goals to stimulate the economy by focusing on rollback of regulations.

Furthermore, geopolitical considerations may have played a role. By shifting away from the policies that strongly favored zero-emission vehicles, the administration might have targeted strengthening relations with fossil fuel-producing sectors and their allied economies. This would align with a domestic strategy of energy independence centered less on renewables and more on traditional sectors.

Other factors, such as pressures from influential lobbyists within fossil fuel and automotive industries resistant to rapid electrification, likely influenced this shift. The revocation aligned with the interests of sectors reliant on fossil fuels, which perceived the previous order as potentially damaging to their market share and business models.

Winners

The revocation stood to benefit several groups, foremost among them traditional automotive manufacturers resistant to the rapid pivot towards zero-emission vehicles. Companies that had not heavily invested in electrification, such as certain segments of domestic manufacturers focusing on fuel-efficient internal combustion engines, gained from reduced regulatory pressure.

Fossil fuel industries, including oil and gas companies, were also likely winners. By slowing the transition to zero-emission vehicles, this move potentially extended the lifespan of gasoline and diesel-based transportation markets, allowing these industries to sustain their operations without the immediate threat of diminished demand.

Communities reliant on traditional energy sectors, especially in regions dependent on coal, oil, and natural gas industries, could experience economic relief. The revocation was poised to preserve jobs in these areas, at least in the short term, by maintaining demand for fossil fuels and delaying a comprehensive shift to cleaner energy sources.

Losers

The cleantech and renewable energy sectors, including companies specializing in electric vehicles (EVs), were notable losers following this policy reversal. Firms investing in green technologies and battery innovation faced potential market contractions as federal support waned, impacting stock valuations and growth prospects.

Environmental and public health advocacy groups also emerged as losers. The rollback arguably undermined efforts to tackle the climate crisis and reduce air pollution. Cities and states with policies aligned with the original executive order's goals may have faced difficulties achieving their environmental commitments without federal alignment.

Finally, consumers seeking more sustainable and cost-efficient transportation options in the long run might have been disadvantaged. The revocation potentially slowed the availability and affordability of zero-emission vehicles, delaying consumer access to the benefits of improved air quality and lower operational costs associated with EVs.