How Much Carmakers Stand to Lose From California Snub

Hitting back at carmakers that sided with Donald Trump in the fight over tailpipe emissions standards, the State of California announced on Friday that, starting in 2020, it would only purchase vehicles from manufacturers “that recognize the California Air Resources Board (CARB)’s authority to set greenhouse gas and zero emission vehicle standards, and which have committed to continuing stringent emissions reduction goals for their fleets.”

That excludes General Motors, Fiat Chrysler, Toyota and Nissan from supplying vehicles for California’s state fleet, all of which supported the Trump administration’s effort to bar the Golden State from setting its own, significantly stricter, emissions standards. “Carmakers that have chosen to be on the wrong side of history will be on the losing end of California’s buying power,” Governor Gavin Newsom said in a statement on the matter.

Earlier this year, the Environmental Protection Agency and the National Highway Traffic Safety Administration stripped California of its authority to set its own emissions standards, which are currently followed, in whole or in part, by 13 other states and the District of Columbia. Last week, a multistate coalition led by California filed a lawsuit against the EPA’s decision, stating that “California will not back down when it comes to protecting our people, our health, and our environment from preventable pollution.”

While sending a strong message, California’s decision to ban certain carmakers from its state fleet will have a very limited impact on the affected companies’ bottom line. As the following chart, based on numbers reported by Reuters, shows, the state purchased vehicles worth $58.6 million from General Motors between 2016 and 2018. To put this number in perspective: GM’s revenue in 2018 alone amounted to $147 billion.