It should come as no surprise that the regulatory landscape for vehicle emissions has shifted dramatically in the last year. For franchised dealers, the challenge isn’t just understanding the rules — it’s preparing for uncertainty and potential policy reversals that could affect product mix, pricing and long-term investment decisions. We’ve got the latest news and what it means to you and your dealership. The Big Shift: Rescission of the Endangerment Finding On Feb. 12, 2026, the U.S. Environmental Protection Agency finalized a rule rescinding the 2009 Greenhouse Gas (GHG) Endangerment Finding and repealing all federal motor vehicle GHG emission standards issued under it. The EPA’s press release calls this the single largest deregulatory action in U.S. history and notes that it will save Americans over $1.3 trillion. • Without the endangerment finding, the EPA has no authority under Section 202(a) of the Clean Air Act to regulate GHG emissions from new motor vehicles. • All prior GHG standards for light-, medium- and heavy-duty on-highway vehicles have therefore been repealed. This action effectively dismantles the federal greenhouse gas framework that governed light-duty vehicles through model year 2026 and set the stage for stricter standards for 2027 and beyond. However, the EPA’s new rule is already facing strong political and legal opposition, and a coalition of health and environmental groups has already initiated litigation. For dealers, that means regulatory uncertainty is far from over. What Happens to the 2027-2032 Standards? At least for now, those standards are repealed at the federal level, as the EPA’s rescission of the endangerment finding limits the ability to enforce such standards. This effectively neutralizes the federal EV mandate as we knew it. While we anticipated a significant increase in EV and plug-in hybrid penetration under the 2027-2032 standards, those compliance-driven targets are no longer in effect. This means that manufacturers are likely to continue moving away from EV models, and we expect a growing emphasis on ICE and hybrid vehicle manufacturing. Dealers should expect continued EV offerings, though not at the escalating pace we saw in 2022-2024. Manufacturers still face global compliance requirements and state-level policies. Dealer Impacts: Areas to Watch Regulatory uncertainty is problematic for dealers and manufacturers alike. Manufacturers invest millions in EPA Emissions Standards in Flux What Dealers Need to Know for 2026 and Beyond 12 KENTUCKY AUTO DEALER
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