Today, MADA Vice President of Public Affairs provided the following comments to a joint hearing of the Senate Environment Policy and Finance Committees:

1.      We are now amid a pandemic that is still months away from subsiding.  COVID caused sales of new vehicles to drop 20% in 2020, and they are expected to take several years to rebound to 2019 levels. Major disruptions to the automotive supply chain have also occurred, causing ongoing vehicle shortages despite reduced demand.  “Business as usual” is a thing of past.  This is the wrong time for the state to interject more uncertainty into the marketplace.  While the earliest the standards would go into effect is 2024, the MPCA is proposing early adoption credits for electric vehicles to encourage “investing early” in the necessary infrastructure (page 59 of SONAR.)  Those costs don’t fall on the manufacturers, as the SONAR portrays, but on Minnesota dealerships, who must buy the cars and so bear the brunt of the financial risk when the manufacturers deliver vehicles to accumulate those early credits.

2.      Today a new administration takes office in Washington, D.C. President Biden has been very clear that one of his top priorities is addressing climate change and that his administration will “reinstate and advance more stringent fuel economy standards that were implemented during the Obama administration but rolled back by Trump.”  The MPCA has touted that “avoiding backsliding” by the federal government is one of the primary reasons for moving forward with California Car Rules (page 19 of SONAR). If the federal government plans to restore the stringent vehicle emission standards the MPCA has relied on, why is it still moving forward with a disruptive plan to follow California instead of waiting for the Biden Administration to reinstate the previous standards?

3.      Lastly, under MPCA’s timeline, the rules would go into effect in 2024.  The following year, California will institute updated rules for model years 2026.  We don’t know what they look like yet, but we do know that they will “increase stringency" and begin a phase-out of the sale of gas-powered passenger vehicles by 2035. Why the Walz Administration wants to commit us to following California when the rules are going to immediately change and incorporate a ban “that isn’t part of Governor Walz’s plan makes no sense.

Minnesota’s auto dealers continue to request that the Walz Administration drop this ill-conceived plan and work with our legislators and stakeholders on homegrown solutions to address climate change and advance cleaner vehicles.