California Presses Ahead With Emissions Rules and EV Incentives

California advances emissions rules and plans EV incentives as federal waivers are rolled back and tax credits expire, raising new legal and market challenges.

California is pressing ahead with its transport emissions agenda even after federal action and Congressional Review Act resolutions targeted the state’s key Clean Air Act waivers.

California Air Resources Board chair Lauren Sanchez said state officials are meeting with Detroit automakers this week to discuss the next phase of greenhouse gas rules. At the same time, Governor Gavin Newsom is preparing an early-February announcement on a proposed $200 million electric-vehicle incentive program designed to help bridge the gap left when federal EV tax credits ended.

The talks come against a hardening political and legal backdrop. Federal moves in 2025 used the CRA to overturn California-related approvals tied to Advanced Clean Cars II, Advanced Clean Trucks, and the heavy-duty “Omnibus” Low NOx program. California has said it will challenge those actions in court, and the dispute has already moved into litigation.

Even more consequential is the administration’s push to rescind the EPA’s endangerment finding, the determination that underpins federal greenhouse-gas regulation. Reporting in late January 2026 described the effort as slowed by concerns over whether a repeal could survive court scrutiny. California has signaled it intends to fight that, too.

Inside the state, the issue is increasingly practical. Advanced Clean Cars II set a 2026 requirement that 35% of new light-duty vehicle sales meet the zero-emission standard, but sales momentum has weakened since federal incentives ended on September 30, 2025. Recent market reporting and statewide summaries show California’s EV/ZEV share slipped year over year in 2025, with late-year figures around or below the 20% range in some periods—fueling automakers’ claims that near-term targets are difficult to reach under current conditions.

What happens next likely hinges on two tracks moving in parallel. If the state’s proposed $200 million program is implemented quickly and is calibrated to where price sensitivity is highest, it could cushion demand as buyers adjust to the loss of federal support. But the larger fight is headed into the courts, both over the CRA-driven waiver reversals and over any attempt to unwind the endangerment finding. For automakers, that combination points to an extended stretch of regulatory uncertainty—one that could shape product planning and compliance strategy well before California and Washington settle their dispute.