New York’s EV Policies
By Savannah N. Criado
Starting in 2025, New York’s heavy-duty trucking industry could be impacted by New York’s adoption of the regulations enacted by the California Air Resources Board (“CARB”). In particular, New York’s legislature has adopted CARB’s Advanced Clean Truck regulations (“ACT”). ACT requires New York heavy-duty truck manufacturers to sell 7% of all heavy-duty trucks as zero-emissions vehicles. From 2025 model-year onward, this percentage will increase, imposing more stringent requirements on manufacturers. Should manufacturers fail to adhere to the percentages imposed—they may find themselves paying a hefty fine. While such regulations plainly target the production capacities of manufacturers, some brands have turned towards imposing restrictions on their dealers and thereby shrinking off their own obligations, while also constraining the inventory of their franchised dealers.
For example, some heavy-duty trucking manufacturers have implemented policies requiring a 1-to-1 ratio of sales, wherein dealers are required to sell one zero-emission vehicle (“ZEV”) in order to receive a vehicle allocation credit of internal combustion engine (“ICE”) vehicles. Put differently, these policies will not allow a dealer to place an order nor receive a delivery of an ICE vehicle unless/until it can demonstrate the sale of a ZEV to an ultimate purchaser. This policy raises several concerns: potential operational constraints, issues with meeting customer demands, and rising vehicle/infrastructure costs to accommodate the requirements imposed by the ACT. While advancements and investments in EV technology are promising and exciting, these advancements must not operate to the detriment of franchised dealers in violation of presently existing state franchise laws.
New York has similarly adopted regulations regarding passenger vehicles through the Advanced Clean Cars II Rules (“Advanced Clean Cars”). The Advanced Clean Car regulations work towards the goal of, and require, all new passenger cars and trucks sold in New York to be zero-emissions by 2035. Like the ACT, the Advanced Clean Cars regulations require an increasing percentage of new passenger vehicles to be ZEVs—starting with the 2026 model year at 35%. We have yet to see OEM policies affecting the new motor-vehicle industry, however, it is likely that in the months leading to 2026—dealers will begin to see requirements similar to those enforced in the heavy-duty trucking industry. Restrictions on allocation can present obstacles to dealer operations in terms of meeting customer demand and/or meeting the sales performance standards implicated by manufacturers themselves. Should a dealer receive policies and/or guidelines from the OEM restricting allocation on the basis of the Advanced Clean Cars regulations—they should forward the same to their experienced dealership legal counsel.
BSM continues to monitor the impacts of the ACT and the Advanced Clean Cars regulations, as well as any updates to manufacturer policy as a result of the same. Should a manufacturer update such policies and/or begin to restrict allocation numbers to the detriment of its franchised dealers—such actions may violate the franchise laws put into place to protect against such actions. Therefore, once dealers begin experiencing negative impacts based on the ACT and the Advanced Clean Cars regulations—they should contact dealership counsel and ensure that their rights are protected to the fullest extent permitted by their state’s franchise laws, as well as working towards a solution that works to benefit their operations.