President Donald Trump on Thursday signed legislation that terminates the state of California's electric vehicle (EV) mandate.
The president signed a law repealing a waiver the Biden administration's Environmental Protection Agency (EPA) granted California to enforce its own emissions standard that would have required the minimum percentage of zero-emission cars to rise from 35% for the 2026 model year to 100% in 2035. Eleven other states signed on to California's EV mandate.
"This is really something and it has to do with the California auto regulation CRA," Trump said. "It's been a disaster for this country. And I want to thank everybody for being here. We officially rescue the U.S. auto industry from destruction by terminating the California electric vehicle mandate once and for all."
"They passed these crazy rules in California and what it would be, 17 states would go by them. And automakers didn't know what to do because they're really building cars for two countries – when you have 17 states, you're building cars for two countries," Trump added.
President Donald Trump said the repeal will "rescue the U.S. auto industry from destruction." (Chip Somodevilla/Getty Images / Getty Images)
"I want to congratulate you all – the Senate, the House, the whole thing. It's incredible. I was going to sign an executive order and give it a shot, but the one good thing with this, No. 1, it holds up forever, and No. 2 – unless somebody votes it out, they'll never do that – and it's just so much better," the president said.
Trump noted that Tesla CEO Elon Musk, who was a close adviser to his administration before his time as a special government employee elapsed and then had a public feud with the president, told him his company will still be positioned to do well without the mandate.
"[Musk] said, 'well, as long as it's happening to everybody, I'll be able to compete,'" Trump said. "It's very interesting. I thought it was a very honest answer, to be honest with you."
Shares in leading EV makers had a mixed reaction to the bill signing.
Tesla shares initially rose about 1.3% but were down almost 0.3% as of early afternoon, while Rivian shares were down over 1.3%.
Other major automakers also saw shares decline – General Motors shares were down nearly 1.5% and Stellantis was down about 1.8%, while Ford was down roughly 1.6%.
Tesla (Photo by John Paraskevas/Newsday RM via Getty Images / Getty Images)
A leading auto industry trade group that represents Detroit's Big Three of Ford, GM and Stellantis, along with numerous other leading automakers, praised the move to repeal the California EV standard.
"Everyone agreed these EV sales mandates were never achievable and wildly unrealistic," John Bozzella, president and CEO of the Alliance for Automotive Innovation, said in a statement. "Worse than unachievable – these EV mandates were going to be harmful. Harmful to auto affordability, to consumer choice, to industry competitiveness and to economic activity."
"Customers don't want the government telling them what kind of car to buy. What they want is a range of choices like efficient gas-powered, battery-electric, hybrid and plug-in hybrid vehicles," Bozzella said.
"President Trump deserves credit for identifying this problem and doing something about it. He got behind this repeal before the EV mandates did real damage to the auto industry in America, stood up for customer choice and helped restore a degree of balance to U.S. emissions regulations," Bozzella added.