The Trump administration and California are locked in a courtroom showdown over who gets to decide what cars Americans can buy—or rather, what cars they must buy to avoid regulatory whiplash.
A federal hearing kicked off Thursday in Oakland, where California argues that congressional Republicans and the Trump team pulled a fast one by using the Congressional Review Act to zap the state’s long-standing waiver for stricter vehicle emissions rules.
This isn’t just another bureaucratic spat. It’s a high-stakes regulatory tug-of-war that has automakers—from Tesla to the legacy giants—stuck in neutral, wondering if they need to build one fleet for Washington and another for the West Coast.
The stakes couldn’t be higher for an industry already nursing bruises from shifting political winds. If California prevails, traditional automakers might have to juggle two contradictory rulebooks: one cheering gas guzzlers under Trump’s rollback of EV incentives and EPA endangerment findings, the other demanding a sprint to 100% zero-emission sales by 2035 in the Golden State and 11 follower states that represent nearly 30% of U.S. new-vehicle sales.
Tesla, the EV poster child, could watch its regulatory credit sales dry up if everyone suddenly complies without guilt. Meanwhile, the industry has already swallowed $55 billion in writedowns on EV bets since the election—proving that in politics, as in driving, sudden U-turns are expensive.
The chaos leaves car companies in a perpetual state of “maybe comply, maybe not,” with California’s Air Resources Board politely suggesting manufacturers keep following its rules for now—penalties might arrive later, like a parking ticket mailed six months after the fact. Automakers are hedging bets because betting on one administration’s policies lasting forever is about as reliable as a 1970s gas station map.
The roots trace back to California’s smog-choked 1950s, when Los Angeles looked like it was auditioning for a post-apocalyptic movie. Congress stepped in during 1967, granting the state special waiver powers that both parties routinely approved for decades—over 100 times.
Enter the Trump second-term playbook: rescind subsidies, kill penalties for missing fuel-efficiency targets, overturn the Obama-era endangerment finding that greenhouse gases harm health, and let Congress shortcut the waiver via the Congressional Review Act.
California cried foul, insisting waivers aren’t ordinary “rules” subject to such congressional override—a position backed by the Government Accountability Office last year. The state sued the day Trump signed the legislation in June, accusing the move of legal sleight-of-hand. The administration calls the suit frivolous and defends Congress’s authority, while the EPA warns California’s approach would cripple industry and hike prices.
Automakers feel like ping-pong balls in a never-ending match. One lobby group dubbed California’s rules an “unaccountable regulatory wormhole,” which sounds dramatic until you realize the real wormhole is Washington’s policy flip-flops.
Former Republican strategist Mike Murphy summed it up: automakers are getting “whipsawed” by short-term political games, making long-term planning feel like trying to time the stock market with a Magic 8-Ball.
The hearing’s outcome remains anyone’s guess—legal experts call the questions largely untested. For now, the auto world idles in regulatory limbo, engines running but going nowhere fast.
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