The Trump administration plans to eliminate California's ability to set its own emissions standards.
The National Highway Traffic Safety Administration will likewise assert that California is barred from regulating greenhouse gas emissions from autos under the 1975 law that established the first federal fuel-efficiency requirements, the people said.
The Obama administration had proposed a tougher standard requiring a corporate average fuel economy of 54.5 mpg, which in real world numbers is closer to the low 40 mpg range, a number automakers have said they can meet. "To do so, we advocate maintaining the current standards that would raise the average fuel economy of the USA light-duty vehicle fleet to a projected 50.8 mpg by 2025 based on the current USA light-duty vehicle fleet mix".
The state's 2009 waiver under the Clean Air Act has allowed California to set emissions rules for cars and trucks that are more stringent than the federal government's. State regulators also worked closely with the Obama Administration to craft federal fuel economy standards that span well into the future.
California and like-minded states are girding for a legal battle with the Trump administration on whether those states have gone too far in controlling greenhouse gases from automobiles, a prospective case that legal scholars say - barring a last-minute settlement - is sure to reach the U.S. Supreme Court.
The other attack on California comes in the form of a proposed revocation of the state's mandate that automakers sell electric vehicles.
Trump's move could also strip California of powers to set electric vehicle quotas within the state.
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So it was really a nice second half which helped us a lot because we all see it's still there, it's all good. If they believe it's the best for them, it's ideal for them.
The EPA and Transportation Department did not immediately provide comments on Monday. The state argued that since it was already enacting strict environmental regulations, it should be allowed to continue to do so on its own terms.
"In California, transportation has been the only sector where emissions have been flat or even going up, so this is very important, " said Daniel Sperling, a member of the Air Resources Board and founding director of the University of California at Davis' Institute of Transportation Studies.
Critics of the Obama era plan to increase average fuel economy to 54.5 mpg have called it a thinly disguised effort to force people to adopt more expensive electric vehicles and plug-in hybrids, as the average is hard for automakers to achieve with a model line-up of fossil fuel-powered vehicles. That authority would also be revoked with the Trump administration's action.
However, 16 other states have committed to following California's emissions lead, so it's likely that any attempt to remove California's waiver and replace it with a weaker rule would result in legal challenges from all the states in the union that want a less-polluting vehicle fleet.
"One of the reasons they've been somewhat quiet is because they're torn, " said Karl Brauer, executive publisher of Autotrader and KBB.com, speaking of the auto companies.
Wheeler said he met last week with Mary Nichols, the head of California' Air Resource Board, and shared the administration's opinion.