The answer is that the United States is not one government. It is fifty states and a federal government, each with different powers, and they fight about those powers constantly. This particular fight has been running for fifty years and it just escalated sharply.
On 12 March 2026, the US Department of Justice filed suit against the California Air Resources Board in the Eastern District of California, seeking to block the state's Advanced Clean Cars II regulations, which require that 35 per cent of new passenger vehicles sold in California in model year 2026 be zero emission vehicles, rising to 100 per cent by 2035.
Attorney General Pamela Bondi announced the filing.
"Oppressive, expensive electric vehicle mandates drive up costs for American consumers and violate federal law. California is using unlawful policies from the last administration to create exorbitant costs for our citizens."
The DOJ's legal argument rests on the Energy Policy and Conservation Act of 1975, which designates the federal government, specifically the National Highway Traffic Safety Administration, as the exclusive regulator of vehicle fuel economy in the United States. States are prohibited from adopting their own fuel economy regulations. California's EV sales mandates, the federal argument goes, function as de facto fuel economy regulations even if they are framed as emissions rules, and are therefore preempted by federal law.
Why California has different rules to everyone else
This is the part most people outside the US do not know. California is the only state in the country that had air pollution serious enough before the Clean Air Act was passed in 1970 that Congress wrote a specific exemption into the law allowing it to apply for stricter emissions standards than the federal baseline. Any other state can then choose to adopt California's rules rather than the federal ones.
California has used that authority for decades. The Los Angeles Basin has some of the worst particulate air pollution in the developed world, historically caused by traffic emissions trapped by geography and sunlight. The state's relationship with vehicle emissions regulation predates the federal Environmental Protection Agency by years.
As of today, 11 other states plus the District of Columbia have adopted California's Advanced Clean Cars II rules: Colorado, Connecticut, Delaware, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island and Washington. Combined, those states represent roughly 40 per cent of the US new car market. California alone accounts for approximately 11 per cent. When automakers plan their US product mix, California's rules are not an edge case. They are a commercial reality affecting nearly half their volume.
A legal merry-go-round that has been running since 2019
This is not the first time this fight has happened. During Trump's first term, his administration revoked California's EPA waiver in 2019, stripping it of the authority to enforce its own emissions rules. California, joined by more than 20 other states and 17 major automakers, immediately sued. The Biden administration reinstated the waiver in 2022, and California's Air Resources Board adopted Advanced Clean Cars II that same year.
In early 2025, the Trump administration revoked the waiver again, this time using the Congressional Review Act, a legislative mechanism that allows Congress to overturn recent federal agency rules by simple majority vote. California and 10 other states sued the same day, arguing that the CRA cannot lawfully be used to rescind a preemption waiver because waivers are not federal rules. Both the Government Accountability Office and the Senate parliamentarian issued nonbinding determinations that using the CRA this way was indeed inappropriate. The legal challenge to that revocation is still in court.
Thursday's new DOJ lawsuit is a separate legal action running in parallel, targeting California's underlying emissions regulations directly rather than the waiver mechanism, and arguing the rules are preempted by federal fuel economy law regardless of any waiver.
California's Governor Gavin Newsom did not hold back.
"Trump is suing to keep Californians hooked on expensive gas — even as prices surge due to his own failed foreign policy."
That is a pointed reference to the Iran conflict and the fuel price spike MotorBuzz covered when the Strait of Hormuz effectively shut and Brent crude surged 13 per cent in a single session. Newsom's argument is that the administration is suing to block EV adoption while simultaneously presiding over an oil price shock driven by a war it started.
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What is actually at stake
For automakers, the stakes are significant. If California and the 11 allied states maintain their rules, manufacturers must ensure enough of their product mix sold in those markets is electric to comply. That means continued investment in EV development, battery supply chains, charging infrastructure partnerships and pricing structures designed to move EVs in volume. If the federal government wins and California loses the ability to set its own standards, a single federal floor applies everywhere, currently far less demanding than California's. The financial pressure on manufacturers to accelerate EV rollouts eases substantially.
Tesla, which derives a meaningful portion of its revenue from selling regulatory credits to other manufacturers who cannot meet California's emissions requirements, stands to lose significant income if the rules are overturned. That income is not operational profit from selling cars. It is payment from competitors for Tesla's surplus compliance credits under California's zero emission vehicle programme.
The broader question, as seen from outside the US, is whether a single large state should be able to set de facto national vehicle standards by virtue of its market size, or whether uniform federal rules are the appropriate regulatory framework for an industry that operates nationally. That is a genuine constitutional argument with reasonable positions on both sides, and it has been running in American courts for the better part of a decade with no settled resolution yet.
What is settled is that the legal process will take years, that automakers must plan their product portfolios under continuing uncertainty, and that every few years this question will be relitigated in court whenever the White House changes party. That is not a stable regulatory environment for an industry making ten to fifteen year investment decisions. It is, as one industry lawyer described it to Automotive News, a costly patchwork that serves nobody well.
Sources: DOJ press release, 12 March 2026 | Associated Press, 12 March 2026 | Washington Times, 12 March 2026 | Carscoops, 12 March 2026 | Seyfarth Shaw legal analysis | Energy Policy and Conservation Act 1975 | Clean Air Act 1970 | MotorBuzz Iran oil prices