Market Overview

California Won't Buy From Automakers Who Sided With Trump

California Won't Buy From Automakers Who Sided With Trump

California is cracking down on the automakers who backed the Trump administration in opposing the state’s bid to set its own emission standards.

What Happened

The California government will bar all state agencies from purchasing any further vehicles from these companies, the New York Times reported. The ban won’t apply to public-safety vehicles.

“Carmakers that have chosen to be on the wrong side of history will be on the losing end of California’s buying power,” Gov. Newsom said in an official statement on Monday, according to the New York Times.

The automakers that intervened on President Trump’s behalf in October against a lawsuit filed by environmentalists included General Motors Company (NYSE: GM), Toyota Motors Corporation (TYO: 7203), and Fiat Chrysler Automobiles NV (OTC: FCAU) among other major companies, Reuters reported at the time.

A General Motors spokeswoman told the New York Times the ban would make it difficult for California to meet its environmental goals. She said California is reducing its choices for “affordable, American-made electric vehicles.”

Automakers Divided In Two

California’s "emissions war" with the Trump administration has forced the automakers to choose sides. Both the state and federal governments have different opinions on the matter.

Ford Motor Company (NYSE: F), Honda Motor Company Ltd (NYSE: HMC), Bayerische Motoren Werke AG (ETR: BMW), and Volkswagen AG (ETR: VOW3), signed a deal with California Air Resources Board to produce fuel-efficient cars and reduce greenhouse gas emissions in July, according to the National Public Radio.

Earlier this month, they received a civil subpoena from the Justice Department for an investigation into alleged violation of the country’s antitrust laws when signing the deal, as reported by the Wall Street Journal.

What’s Next

Newsom is planning to implement the new rules starting January, the New York Times said.

The new rules will also require the state agencies only to purchase electric or hybrid vehicles, California’s Department of General Services said in a statement on Friday.


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