May 13, 2025 – To say it’s an unprecedented time in Washington for the auto industry is an understatement. While much attention has rightly been paid to the Administration’s tariffs on imported autos and auto parts (more on that below), there are also major legislative efforts underway RIGHT NOW on important dealer priorities.

• The Senate could vote on legislation next week to stop California’s zero emission vehicle (ZEV) mandate, which would ban new gas cars in certain states and distort the vehicle market in all states beginning this Last week, the House of Representatives voted 246-164, including 35 Democrats, to pass this legislation;
  
  
• Congress is working to overturn EPA’s overly aggressive EV mandates set by the Biden Administration; and
  
  
• EV tax credits are in jeopardy, and NADA is advocating for a gradual phase-out to help dealers manage high EV inventories if the credits are eliminated.

Now is the time to call, email, or invite your lawmakers to your dealership to make sure they understand the legislative issues important to your dealership. Your voice matters!

House Overwhelmingly Votes to Pass NADA-Backed Legislation to Revoke California’s Ban on Gas Cars

Take Action: Contact your Senators NOW and urge them to pass H.J. Res. 88, legislation to overturn California’s EPA waiver banning new gas cars by 2035. A Senate vote on the House- passed legislation, H.J. Res 88, could occur soon.

See NADA’s legislative alert which has key information to contact your members of Congress.

Why it matters: California’s gas car ban, if allowed to go into effect later this year, establishes unrealistic timeframes and requirements that would drastically curtail the availability of gas and hybrid vehicles, forcing consumers everywhere to pay more for new and used cars. See NADA’s issue brief here.

Tell me more: The holdup on Senate action is a Government Accountability Office (GAO) opinion, echoed by the Senate parliamentarian, which incorrectly claims that California’s EPA waivers are not a “rule” and therefore cannot be revoked through the Congressional Review Act (CRA), a special type of bill which allows for expedited consideration of legislation to repeal recently-enacted rules. The GAO’s opinion, however, is flawed and omitted key facts such as the nationwide impact of California’s rules to ban new gas cars.

To distract from the substantive issue of banning new gas cars, 20 prominent Senate Democrats signed a letter warning Senate Republican leaders against proceeding with a vote on H.J. Res 88. 

Currently, Senate Republicans appear likely to proceed since the GAO has no statutory role to decide if an agency action qualifies as a rule for purposes of a CRA after an agency has sent it to Congress for review.

Senate Majority Whip John Barrasso (R-Wyo.) wrote an opinion piece for the Wall Street Journal, as well as Sen. Mike Lee (R-Utah), expressing the rationale for rejecting the GAO’s opinion and support for passing H.J.Res. 88.

The following Republican Senators should be urged to set aside GAO’s flawed and non-binding opinion and VOTE YES: Sens. Lisa Murkowski (AK), Mitch McConnell (KY), Bill Cassidy (LA), Susan Collins (ME), and John Curtis (UT).

Dive deeper: See current list of Senate cosponsors here, Senate target list here, and why Congress can revoke the waiver using the Congressional Review Act here.

What happened in the House: In a major step to block California’s sales ban on gas cars, the House passed H.J. Res. 88 by a decisive 246-164 vote. See NADA’s letter to Representatives and press release here.

House passage of H.J. Res. 88 included support from 35 Democrats. Here is a link to the House vote on H.J. Res. 88 to see how your delegation voted. Please take the time to thank your Representatives – especially Democrats –who supported H.J. Res. 88. See a customizable note you can send to Democrats who supported the bill here.

Support Legislation to Overturn Biden-Era EPA EV Mandates

What’s happening: The EPA under the Biden Administration established federal EV mandates that went too far, too fast and are separate from California’s new gas car ban. These overly aggressive rules require automakers to manufacture more and more EVs, with the target reaching 26% EVs by 2027 and 56% by 2032 – regardless of consumer demand.

Sen. Bernie Moreno (R-Ohio), a former franchised auto dealer, and Rep. Troy Balderson (R- Ohio), who worked for many years at his family-owned auto dealership, have introduced the Transportation Freedom Act (H.R. 2814/S. 711), which would eliminate the EPA’s EV mandate and create a single, national fuel economy standard that is achievable, affordable, and maintains consumer vehicle choice. See a one pager on H.R. 2814/S. 711 here and NADA issue brief here.

Tell me more: There may be an opportunity to include provisions of Sen. Moreno/Rep. Balderson’s bill to overturn the EPA EV mandate as part of a larger “reconciliation” bill currently under consideration by Congress. A reconciliation bill can pass by a simple majority in both chambers.

Action item: Please contact your members of Congress — especially those on the Senate Finance Committee and House Ways and Means Committee and urge them to cosponsor the Transportation Freedom Act (H.R. 2814/S. 711). Tell them:

• The nationwide average for EV sales is 5%. The EPA’s EV mandate is out of sync with consumer demand, and requires unattainable levels of EVs to be sold.
  
  
• Consumers are not buying enough EVs to meet EPA’s mandate due to cost (the average transaction price for an EV is $11,000 more than the average gas car), an inadequate charging infrastructure and long charging times.
  
  
• Dealers should urge their federal legislators to cosponsor (R. 2814/S. 711) to eliminate the EPA’s EV mandate and create a single, national fuel economy standard that is achievable, affordable, and maintains consumer vehicle choice.

Urge Congress to Support a Reasonable Phase Out of EV Tax Credits

What’s new: President Donald Trump and Republican leaders in Congress plan to significantly roll back or eliminate consumer EV tax credits as part of a tax bill expected to pass later this year.

Tell me more: Dealers have spent billions to prepare for EVs – upgrading facilities, training technicians and stocking EV inventory. However, right now dealers are sitting on $7 billion of EVs nationwide and paying floorplan interest on the cars that are still on their lots.

NADA is urging Congress to gradually phase-out EV tax credits if the tax credits are repealed, A “phase out” would allow dealers time to reduce the gap between their current high EV stock, caused by the government’s aggressive EV mandate, and slow consumer demand. See NADA’s issue brief here.

Action item: Urge your Republican members of Congress—especially House Freedom Caucus members, House Ways and Means Committee members and Senate Finance Committee members to support a reasonable phase-out of the EV tax credits which will give small business dealers time to manage high EV inventory down in an orderly way. Tell them:

• The federal government set an overly aggressive EV mandate that is far ahead of consumer demand and affordability. Dealers cannot force consumers to buy EVs, especially since they are on average $11,000 more expensive than gas-powered EV tax credits have helped make EVs more affordable, which is crucial given high EV inventory and low consumer demand.
• Dealers are carrying high EV inventory costs due to EV mandates. Dealers pay daily floorplan interest charges on unsold EVs and currently have 140,000 EVs on their
• A reasonable phase out of the EV credit is needed because it allows both consumers and small businesses like mine time to adjust to new rules and make informed

NADA Engaging the Trump Administration on Tariffs

What’s happening: On April 29, President Trump announced measures to offset some of the adverse impact of tariffs on autos and auto parts. In an Executive Order, the President exempted autos and auto parts that are subject to auto tariffs from other compounding tariffs –

– including tariffs on steel and aluminum and “fentanyl” tariffs on Canada and Mexico.

In April, NADA joined the Alliance for Automotive Innovation and five other trade associations representing a large cross section of the auto industry in sending a letter to Trump Administration officials warning of the potential destabilizing effects of the 25% tariffs on auto parts, and saying the President’s potential openness to reconsidering such tariffs would be “welcome relief.”

Additionally, see slides with up-to-date breakdown of tariffs on the automotive industry here excluding China.

Tell me more: In Congress, legislators have thus far been unwilling to curtail the Trump Administration’s use of special executive powers to levy tariffs, however:

• A recent Senate resolution to limit the President’s authority garnered notable bipartisan support, although ultimately failing 49-49. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), and Rand Paul (R-Ky.) supported the measure.
• Earlier in April, four Republicans joined all Democratic Senators in passing a mostly symbolic separate resolution that would block the 25% tariff on Canadian imports enacted by President Trump on February This legislation is unlikely to be taken up by the House.

What is NADA doing: NADA continues to engage the Administration, as well as educate Congress, on the negative effects auto tariffs will have on vehicle and parts affordability and availability. See NADA’s May 5 Issue Alert informing NADA members of the most recent changes to the tariffs announced by the President and NADA’s statements (requires member login);

How can I help: Educate your legislators on the effects tariffs are currently having on vehicle and parts availability and affordability at your dealership. Sustained tariffs will almost certainly increase vehicle costs, with estimates ranging from an additional $2,000 to $12,000 per vehicle on average—although tariffs will affect each manufacturer and vehicle model differently. JD Power has found that a price increase of $2,300 per vehicle could reduce sales by 1.1 million vehicles per year.

Resources: Legislative Priorities | Tax Issue Brief | ATD Legislative Priorities | ATD CRA Issue Brief