The Environmental Protection Agency’s decision to overturn a study on the harms of greenhouse gases may seem like a victory for gas-guzzling heavy vehicles and a disaster for the U.S. electric vehicle market. But critics of the move and some industry analysts argue that the U.S. auto industry can’t afford to retreat too far from fuel-efficient cars and EVs.
EPA is reconsidering the legal framework known as endangerment certification for several reasons, chief among them the conclusion that the Clean Air Act of 1970 gave the agency authority to regulate airborne toxins that pose a direct threat to human health, rather than greenhouse gases that can indirectly cause harm through the effects of climate change.
This discovery helped form the basis of subsequent fuel economy targets, EV incentives, and other federal and state policies and programs aimed at decarbonizing transportation.
The EPA reversal is the latest move by the Trump administration and Congress to rescind rules and incentives intended to steer automakers and buyers away from fuel-burning vehicles and toward low- or zero-emission vehicles, especially EVs.
Last year, Congress eliminated federal tax credits for EVs of up to $7,500 for new cars and $4,000 for used cars. Cox Automotive said sales dropped significantly in October, the month after the credit ran out.
President Donald Trump also signed three resolutions last year revoking exemptions the Environmental Protection Agency granted decades ago to states like California that enabled many regulations on air quality, climate change mitigation and emissions. Zero-emission vehicle credit programs in California and other states have been an important source of revenue for the United States. tesla We have grown from a small startup to one of the world’s largest EV manufacturers.
Some automakers and the industry groups that represent them are frustrated, believing the emissions regulations are too restrictive and favoring EVs, arguing that these vehicles are not meeting consumer demand. U.S. EV sales peaked in September ahead of the end of federal incentives, accounting for 10.3% of the new car market, according to Cox Automotive.
“We appreciate President Trump and Secretary (Lee) Zeldin’s efforts to address the disparity between current emissions standards and customer choices.” ford motor said in a statement sent to CNBC. “Ford has consistently advocated for one, stable national standard that aligns with customer choice, the marketplace, social good and American job growth.”
CNBC reached out to two other Detroit-based legacy automakers. Stellantis and general motorsfor comments.
“We welcome today’s decision because it allows us to continue to offer a wide range of cars, trucks and SUVs that Americans want, need and can afford. We continue to support a reasonable and achievable approach to fuel efficiency standards that preserves customer freedom of choice,” Stellantis said in a statement to CNBC.
GM introduced CNBC to the Automotive Innovation Alliance, a U.S. industry group representing automakers in the U.S. and around the world.
The alliance said Wednesday’s action “fixes some of the unachievable emissions regulations enacted under the previous administration.”
“The U.S. auto industry remains focused on preserving consumer vehicle choice, maintaining industry competitiveness, and staying on the long-term trajectory of reduced emissions and cleaner vehicles,” the alliance added in a statement.
Over the past year, the alliance has criticized state and federal regulations aimed at promoting EV adoption.
When the National Highway Traffic Safety Administration proposed relaxing Corporate Average Fuel Economy (CAFE) standards, the Alliance welcomed the change.
“We are reviewing NHTSA’s announcement and are pleased that NHTSA has proposed new fuel economy standards,” Alliance President and CEO John Bozzella said in a December statement. “We have been clear and consistent. The current CAFE rules, finalized under the previous administration, are extremely difficult for automakers to achieve given the current EV market.”
Aerial view of Tesla’s Fremont factory in San Rafael, California, January 29, 2026.
Justin Sullivan | Getty Images
Meanwhile, Tesla is among the automakers opposing the review of endangered certifications.
In a letter to the EPA, Tesla said, “The endangerment findings and resulting vehicle emissions standards have provided a stable regulatory foundation for Tesla’s extensive investments in product development and production.” “Reversing the endangerment findings would take away consumer choice and broader economic benefits, negatively impact human health, and further impact the integrated North American automotive sector.”
Clean transportation researchers and analysts warn that abandoning fuel economy targets and electric vehicles may be short-sighted as the world seeks cleaner transportation.
All three Detroit automakers sell vehicles outside the United States, so they must consider stricter emissions regulations in other markets.
In addition, Alan Zheng, professor at the Center for Electric Vehicle Research at the University of California, Davis, said consumers are becoming increasingly insistent on EVs. Battery prices have come down and there are about 70 models on the U.S. market, compared with just a few about a decade ago, he said.
“Nonetheless, I think almost a kind of war against EVs, with the elimination of subsidies and the elimination of regulations, has driven us to the point where we don’t see a complete pivot to EVs,” Jen said. “Many of its products are commercially viable and I think it will continue to grow, although perhaps a little more slowly now.”
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