Industry groups warn of price increases under Walz’s clean car rules

They say the rules will "increase costs" and "severely" limit consumer choice.

A Tesla electric vehicle charging station. (Pixabay)

Industry groups are throwing their weight behind a last-ditch effort to abandon a rule that will force automakers to deliver more low-emission and zero-emission vehicles to Minnesota.

The rule was adopted last July by the Minnesota Pollution Control Agency and is modeled after California’s clean car standards. In essence, the regulation will require automakers to deliver more low-emission and electric vehicles to the Minnesota market, according to the Pollution Control Agency.

The state agency says these rules are necessary in order for Minnesota “to meet its goal of reducing greenhouse gas emissions by 30 percent by 2025 and 80 percent by 2050.” The rules will apply to new vehicles, not existing vehicles or used vehicles for sale, the agency notes.

The agency also claims Minnesotans would see “cost benefits” by using “more efficient” vehicles. The average price of an electric vehicle is around $50,000 and others have warned that their proliferation could lead to a surge in electricity prices.

The clean car standards have been adopted by 12 other states but Minnesota is the first and only state in the Midwest to follow the coasts.

One bill in the Legislature seeks to change that. Among other things, the “Consumer Choice of Fuel Act” would repeal the Pollution Control Agency’s rule and prevent all state agencies from adopting regulations that “restrict consumer choice in purchasing motorized equipment based on the equipment’s fuel source.”

Several industry groups issued a letter in support of the proposed act, saying they oppose “California bureaucrats making decisions about the products we make, sell, and purchase.” They say the rules will “increase costs” and “severely” limit consumer choice.

“Through the adoption of ‘Clean Cars Minnesota,’ beginning in 2024, the types of light-and medium-duty vehicles for sale in Minnesota will be determined by California laws made in response to that state’s unique environmental, economic, and demographic challenges. And as California updates its law to incorporate a complete ban on the sale of gas-powered passenger vehicles by model year 2035, Minnesotans will also be subject to significantly stricter limits on what vehicles are available in the marketplace,” the letter explains.

California’s total ban on gas-powered vehicles could “increase upfront vehicle prices by as much as $2,100,” the letter says.

And there’s nothing to stop Minnesota from following California’s lead. That’s why the Consumer Choice of Fuel Act would amend a state statute that the Pollution Control Agency has used as justification for making “these decisions without legislative approval.”

Another issue is that demand for electric vehicles in Minnesota is low, according to the letter, and inflation and supply chain issues already “increased the price of new vehicles by 12% and used by 37% in 2021.”

“These are major policy decisions – all of which have been determined unilaterally by the MPCA without a vote of our voice, our Minnesota legislators,” the letter concludes. “If the agency is willing to use this ‘authority’ to adopt California’s motor vehicle emission standards, what’s to prevent it from also using it to adopt California’s other rules regulating heavy-duty trucks, boats, tractors, off-road equipment, and lawnmowers?”