As President-elect Donald Trump prepares to assume office, the administration is signaling a shift in regulatory policy that could have sweeping implications for the automotive and advanced mobility industries. Following a precedent set during his first administration, Trump is expected to initiate a regulatory freeze and a review of rules enacted under the Biden administration, particularly those he deems costly or unnecessary.
The transition team's focus on regulatory rollbacks has raised questions about the future of key rules affecting emissions, electric vehicles, and advanced mobility technologies. This review process, coupled with Republican control of Congress, is likely to reshape the automotive regulatory landscape significantly.
A Familiar Playbook for Regulatory Review
In keeping with tradition, we expect the incoming administration to issue a memo on January 20 ordering a pause on pending regulations. This move mirrors steps taken by both the Biden and first Trump administrations during their early days in office.
The Biden administration's 2021 regulatory freeze directed agencies to:
- Halt the issuance of new rules pending review
- Withdraw rules submitted to the Office of the Federal Register but not yet published
- Delay the effective dates of published rules by 60 days for further evaluation
Trump is widely expected to implement similar measures, which could delay or dismantle regulations across several categories.
Categories of Rules Under Review
Published Rules Pending Effectiveness
Rules that have been published in the Federal Register but are not yet in effect as of January 20 are prime candidates for postponement. The administration could push back their effective dates to allow time for a thorough review. Any revisions, however, must comply with the Administrative Procedure Act (APA), requiring a new notice-and-comment process.
Examples include the Automatic Emergency Braking (AEB) Systems for Light Vehicles and the ADS-equipped Vehicle Safety, Transparency, and Evaluation Program.
In-Progress Rules
Proposed regulations still moving through the rulemaking process are more easily altered or abandoned. These include rules not yet finalized under the APA, offering the Trump administration greater flexibility to reshape the regulatory agenda.
Examples include the proposed rule on Heavy Vehicle Automatic Emergency Braking.
Early-Stage Rules
Regulations listed in the Biden administration’s Unified Agenda of Regulatory and Deregulatory Actions but not yet published in the Federal Register represent another area of opportunity for rollback. The Trump administration will have discretion to halt or continue their development unless mandated by Congress.
Examples include proposed and in-development rules on the Framework for Automated Driving Systems Safety, Advanced Impaired Driving Technology, Incident Reporting Requirements for Automated Driving Systems and Level 2 Advanced Driver Assistance Systems. and Heavy Vehicle Speed Limiters.
Potential Targets in the Automotive Industry
The Trump administration is expected to scrutinize several high-profile automotive and mobility-related programs, including the following.
Electric Vehicle Initiatives
Tax credits established under the Inflation Reduction Act (IRA) are likely to face heightened scrutiny. While congressional action would be required to repeal existing tax incentives, the administration's budget reconciliation process could pose significant challenges to these programs.
Greenhouse Gas Phase 3 Rules
The Environmental Protection Agency’s (EPA) stringent emissions standards are likely to be challenged in court. Pending Clean Air Act waivers may also face rejection.
Congressional Review Act: A Tool for Legislative Rollbacks
Republican control of Congress provides additional avenues for overturning regulations. Under the Congressional Review Act (CRA), lawmakers can repeal recently finalized rules by using expedited procedures. The CRA’s “lookback” mechanism could enable Congress to review regulations finalized as far back as August 16, 2024.
Broader Implications for the Automotive Sector
This policy shift has the potential to reshape investment and innovation in the automotive sector. Delays in implementing emissions and mobility regulations could impact the transition to electric vehicles and advanced driver-assistance systems, creating uncertainty for automakers navigating a rapidly evolving market.
The Trump administration’s approach underscores a broader ideological divide over the role of regulation in promoting environmental sustainability versus economic growth. As the automotive industry awaits clarity, stakeholders are bracing for a period of significant regulatory and legislative flux.
The authors would like to thank Autonomous ＆ Connected Mobility Analyst Tess Brennan for her assistance writing this article.
