Dive Brief:

• Ford, Honda, BMW and Volkswagen last week struck a deal with California to meet stricter efficiency standards — a move celebrated by those who want to see a cleaner transportation sector, even as the White House signaled it could challenge the agreement.
• The deal will mean annual reductions of vehicle greenhouse gas emissions for the next seven years and will encourage innovation to accelerate the transition to electric vehicles (EVs). Automakers committed to manufacturing vehicles that average 50 miles per gallon by 2026.
• The Trump Administration last year said it plans to rescind California’s authority to set its own emission standards for automobiles, which has been in place for decades. White House officials, responding to the California deal, said plans to take back that authority are still in the works.

Dive Insight:

California's deal with four automakers has been hailed as a win for consumers and the environment, but a statement from the White House signals the fight is not over.

"The federal government, not a single state, should set this standard," a White House spokesperson told the Wall Street Journal. "We are moving forward to finalize a rule for the benefit of all Americans."

Last year, the Trump administration said it wanted to freeze federal vehicle efficiency standards at 37 miles per gallon, rather than the 50 mpg target for 2025 finalized by the Obama administration. The administration also said it would look to pull California’s ability to issue its own auto pollution rules under the Clean Air Act.

Under the new framework agreed to last week, gasoline and diesel cars and light trucks will get cleaner through 2026 at about the same rate as the state's current program, according to the California Air Resources Board. The agreement also rewards companies that sell more EVs with additional credits to meet the greenhouse gas standard for their entire fleet.

"Transportation is the number one cause of greenhouse gases," Plug In America Executive Director Joel Levin said in a statement. "The Trump administration’s rollback of clean car standards is a step in the wrong direction."

The agreement also aims to simplify compliance by removing a requirement for automakers to consider upstream greenhouse gas emissions associated with the production of the electricity used by EVs. 

"California’s authority to set tough vehicle emission standards has been good for California and the country," Gov. Gavin Newsom, D, said in a statement. "This agreement affirms the fact that retaining that authority is a crucial element in our ability to make progress with cleaner cars."