The U.S. Supreme Court has rejected a case challenging a Minnesota law that would require auto dealers to offer more hybrid and electric vehicles.
The high court’s decision, announced on Monday, came without any explanation or dissent from the justices.
The Minnesota Automobile Dealers Association (MADA) had contested the “clean car” rules, which were implemented in 2021 by the Minnesota Pollution Control Agency at the request of Governor Tim Walz. The emissions standards are set to take effect in 2024 for 2025 model-year vehicles.
MADA argued in court filings that the new rules would force dealers to sell more electric vehicles than there is demand for, leading to higher prices. They claimed that the mandate is an overreach of government power and asked the Supreme Court to overturn it, after the Minnesota Court of Appeals upheld the law in January.
“Dealers may only purchase vehicles based on the fleets which manufacturers are allowed to offer, which will contain far more [electric vehicles] than customers in Minnesota demand,” stated a court filing from MADA. They added, “Because of the early-action credit mechanism and its coercive effect, dealers are immediately faced with vehicle fleet and engine options limited based on the requirements of the Rules.”
In 2021, a federal judge dismissed a lawsuit from MADA, ruling that the dealers couldn’t claim harm because the rule had not yet been implemented.
MADA President Scott Lambert expressed disappointment with the Supreme Court’s decision, predicting that prices will only rise.
“We believe using California’s rules is not a good fit for Minnesota,” Lambert said in a statement. “Minnesota dealers are happy to sell customers electric vehicles if those customers choose to purchase them. But we are not in favor of a mandate that requires us to stock vehicles that have very little demand.”
Environmentalists welcomed the Supreme Court’s decision, with J. Drake Hamilton from the nonprofit Fresh Energy stating, “Clean transportation is not only important for our health, but it’s necessary for our economy. Transitioning to a zero emissions vehicle fleet will provide good paying jobs and save consumers money at the pump.”
Minnesota is among several Democrat-led states pushing for stricter rules to phase out internal combustion engine vehicles, which currently dominate the U.S. market. The Biden administration has also set a goal for electric vehicles to make up 50% of new car sales by 2030 and proposed $5 billion for EV charging infrastructure.
EV Push
According to a recent Cox Automotive report, EV sales in the third quarter of this year increased by nearly 50% compared to the previous year, accounting for a record 7.9% of total industry sales. Cox Automotive attributed this growth to higher inventory levels, increased product availability, and downward pricing pressure.
However, a July Axios report revealed that many U.S. car dealers are struggling to sell EVs and no longer want to stock them. This sentiment was echoed in a separate report from dealership owners.
An electric car at a Canadian Tire charging station in Scarborough, Ont., on June 14, 2023. (The Canadian Press/Doug Ives)
Scott Kunes, the chief operating officer of Kunes Auto and RV Group, stated that they have turned away EV inventory and want to see a return on their investment. He emphasized that the EV ownership experience involves lifestyle changes, including charging and range anxiety.
A Cox Automotive analyst noted that EV supply currently exceeds demand, stating, “Automakers are building more, but not enough consumers have come to the field.”
Reuters contributed to this report.
What are the arguments raised by the Minnesota Automobile Dealers Association against these rules, and how do they believe they will impact auto dealers and customers?
Oning to electric vehicles and reducing emissions is crucial to combat climate change and create a sustainable future.”
The Minnesota “clean car” rules are part of a broader effort to reduce greenhouse gas emissions and transition to a cleaner transportation sector. Governor Tim Walz requested the implementation of these rules in response to growing concerns about air pollution and the impact of vehicle emissions on climate change. The rules require auto dealers to offer a certain percentage of electric and hybrid vehicles in their inventory, starting in 2024.
However, the Minnesota Automobile Dealers Association (MADA) has been fighting against these rules, arguing that they infringe upon the autonomy of auto dealers and force them to sell vehicles for which there is limited demand. MADA claims that this will lead to higher prices and financial burdens for dealers.
In their court filings, MADA emphasized that dealers can only purchase vehicles from manufacturers based on the fleets allowed, which will contain more electric vehicles than Minnesota customers demand. They also raised concerns about the limited options available due to the requirements of the rules.
Despite MADA’s objections, the Supreme Court rejected the case without providing any explanation or dissent from the justices. This decision effectively upholds the “clean car” rules in Minnesota, giving a boost to the state’s efforts to promote the adoption of electric and hybrid vehicles.
MADA President Scott Lambert expressed disappointment with the Supreme Court’s decision, stating that prices are likely to rise. However, environmentalists, such as J. Drake Hamilton from the nonprofit Fresh Energy, welcomed the decision and highlighted the importance of clean transportation for both public health and the economy.
Transitioning to electric vehicles is not just an environmental imperative but also an economic opportunity. Electric vehicles have the potential to reduce air pollution, decrease dependence on fossil fuels, and create jobs in the clean energy sector. By incentivizing the adoption of electric and hybrid vehicles, not only can we mitigate the impacts of climate change, but we can also drive innovation and economic growth.
While the Supreme Court’s decision is specific to Minnesota, it has broader implications for the nation’s approach to cleaner transportation. It sends a signal that state-level efforts to reduce emissions and promote electric vehicle adoption are within the realm of legality and can withstand legal challenges.
As more states implement similar policies, it is crucial for auto dealers to adapt and embrace the transition to electric vehicles. By aligning their inventory with the growing demand for cleaner transportation options, they can remain competitive in the evolving market and contribute to a more sustainable future.
The ruling also highlights the need for collaboration between stakeholders, including auto dealers, manufacturers, policymakers, and environmental organizations. By working together, we can address concerns about limited demand and ensure a smooth transition to a cleaner, more sustainable transportation sector.
In conclusion, the U.S. Supreme Court’s decision to reject the challenge against Minnesota’s “clean car” rules is a significant step forward in the state’s efforts to promote the adoption of electric and hybrid vehicles. While there are concerns about potential financial burdens for auto dealers, it is crucial to prioritize the long-term benefits of reducing emissions and combating climate change. By embracing this transition and working together, we can create a cleaner, more sustainable future for all.
Now loading...