The overturning of the Chevron Doctrine, which required courts to defer to administrative agencies’ interpretation of ambiguous statutes, may mark the beginning of a significant change in regulatory policies affecting the automotive industry. Here are key impacts:
- Safety Investigations, Recalls, and Regulations
- NHTSA Standards: Changes in court interpretation of NHTSA’s authority to regulate new technologies could shift safety requirements, impacting vehicle design, testing, and certification.
- Automatic Emergency Braking: There may be an opportunity to reevaluate recent NHTSA rulemaking in light of the decision, such as the proposed mandate for standard automatic emergency braking in new U.S. passenger vehicles.
- ADAS and AV Technologies: Potential challenges to NHTSA’s use of agency interpretations of the Safety Act to establish policies, assert expanded regulatory authority, and exercise enforcement powers over these new technologies have new viability.
- Recall Remedies: NHTSA’s recent efforts to expand its authority over recall remedies through novel statutory interpretations may be open to question.
- Electric Vehicles (EVs)
- Statutory Authority Reexamination: Various agencies’ actions to implement the Inflation Reduction Act and other legislation intended to create incentives and infrastructure support for EV adoption may be challenged in courts, affecting market dynamics and investment in EV technology.
- Emission & Water Quality Standards
- EPA Regulations: Courts may reinterpret EPA emissions standards, potentially leading to uncertainty and new rulemaking.
- Tier 3 Motor Vehicle Emissions and Fuel Standards: Judicial review of the new Tier 3 vehicle emission and fuel standards could alter compliance timelines or stringency levels.
- PFAS and Water Quality: The current court challenges to the EPA’s recent expansion of drinking water standards and Superfund cleanup requirements, to include PFAS and of the definition of waters of the state, may be bolstered by scaling back agency statutory implementation authority.
- Fuel Efficiency Requirements
- CAFE Standards: Corporate Average Fuel Economy standards and enforcement actions might face statutory reinterpretation, impacting long-term planning and investments in fuel-efficient technologies.
- Interplay with State Regulations
- State Emission Standards: Absent express, unambiguous authorization or waivers by Congress, states like California may face increased legal scrutiny and challenges to their stricter-than-federal environmental emission standards, leading to potential regulatory fragmentation.
- State-Specific Incentives: Shifts in the federal-state power balance may affect state-specific clean energy incentives, requiring close regulatory monitoring.
- Added Complexity: States might step in and fill potential regulatory gaps caused by the elimination of the Chevron doctrine with laws of their own, with differing state and federal court interpretations adding complexity.
- Compliance and Litigation Risks
- Regulatory interpretations in flux may lead to increased litigation, creating additional uncertainty and costs for the automotive industry impacting long-term planning and investment.
- Potential new legal challenges may necessitate new proactive compliance efforts to mitigate risks.
Stay informed and review your risk and compliance strategies to adapt to these evolving legal landscapes. Our team is here to guide and support you through these changes. For more information or to schedule some time to discuss, reach out to Laura Baucus, Director of Dykema’s Automotive Industry Group at lbaucus@dykema.com, or your Dykema relationship partner.