Minnesota appeals court upholds 'clean cars' plan after dealership pushback

A cover hides a charging for port for Tom Rayburn's Mitsubishi i-MiEV
A cover — easily mistaken for a gas cap — hides a charging for port for a Mitsubishi i-MiEV in the driveway of a St. Paul home in Feb. 2018.
Evan Frost | MPR News file

Updated: 5:25 p.m.

The Minnesota Court of Appeals on Monday upheld the state’s “clean cars” plan, after a challenge by the Minnesota Auto Dealers Association.

The rules — modeled after regulations in California — are intended to both increase the number of electric vehicles for sale in Minnesota, and reduce the emissions from non-EVs.

The Minnesota Pollution Control Agency first proposed the rules in 2019, and a state administrative law judge signed off on the rules in 2021.

Auto dealers have pushed back, saying electric and low-emissions cars aren’t what consumers want. They also have said the rules would saddle dealers with unsold inventory and send buyers elsewhere.

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The dealers first unsuccessfully sought to block the rules in federal court. Then last June, they challenged them in the state Court of Appeals.

In that suit, the Minnesota Auto Dealers Association argued that the MPCA overstepped its regulatory authority — and improperly delegated its authority to another state — in adopting the California-created rules.

A three-judge panel — including the court’s chief judge, Susan Segal — wrote in its ruling released Monday that the MPCA “did not violate the nondelegation doctrine.”

“We also conclude that the MPCA acted within its statutory authority in adopting a uniform statewide motor-vehicle emission standard and that Minnesota is an eligible state to adopt the California standards. We thus determine that the Clean Car Rule is valid,” the panel wrote.

In a statement Monday, the auto dealers’ association called the ruling “disappointing” and said its board of directors “will examine the ruling to decide if an appeal is warranted.”

“This supply mandate run by California bureaucrats does not address the main hurdles in the way of getting consumers into electric vehicles. The state should be instituting an aggressive policy of building infrastructure and creating incentives for consumers to purchase this new technology. Minnesota policy should not be dictated by Californians who intend to ban the sale of gasoline powered automobiles by 2035,” the statement said.

The association also noted what it called “one good thing” in the ruling: In turning back the challenge, the court did find that if there are major changes in the California standards, the MPCA would be required to initiate a new rulemaking process to adopt those changes.

The MPCA issued a statement Monday saying it’s pleased with the ruling.

“This standard is an important part of reducing greenhouse gas emissions in Minnesota, while the state also builds out the electric vehicle charging network, advances alternative modes of transportation, and works to create cleaner fuels that support Minnesota's economy,” the agency’s statement read.

The rules are set to go into effect with model year 2025 vehicles that will begin to hit dealer lots in early 2024.

The proposed standards have two components. The first, called the low-emission vehicle — or LEV — rule, would gradually require conventional gas-powered cars and trucks sold in the state to be more fuel-efficient.

The second, called the zero-emission vehicle — or ZEV — rule, would require manufacturers to make more cars and trucks that don’t emit any greenhouse gas emissions available for sale in Minnesota. These include battery electric vehicles or plug-in hybrids.

The Minnesota Pollution Control Agency said previously that there’s strong demand for electric vehicles in the state, but that dealers haven’t offered a wide range of choices to consumers. The agency said many of those vehicles get sent instead to other states that have already adopted the California standards.

California has special permission to implement its own tailpipe emission standards stricter than those of the federal government. Other states have two choices: to follow the federal government’s standards, or adopt California’s.

The MPCA estimates the plan will require between 6 and 7 percent of new vehicles sold in the state to be zero-emission cars and trucks.