Stellantis Accusing California of Cheating in Regulatory Scheme

Stellantis has filed a petition accusing the California Air Resources Board (CARB) of retaliating against the company via an “underground regulatory scheme” that put the automaker at a competitive disadvantage. The filing comes after Stellantis began facing stricter greenhouse gas emissions requirements than some of its competitors who were part of the secretive agreements made between CARB and a handful of automotive companies.

For its part, Stellantis has been complaining about the regulatory commission’s meetings with select automakers like Ford, Honda, BMW, Volvo, and Volkswagen, for some time. The meetings, which took place in 2019 and 2020, created separate frameworks for those participating automakers while leaving others, including Stellantis, out of the loop. These alternative vehicle standards changed target carbon emissions, credit banking, and reporting from 2021-2026 for those involved. The filing from Stellantis says that the harsher enforcement it faces will add serious economic burdens to include dealership allocations.

The petition, filed by Gibson, Dunn and Crutcher LLP with the California Office of Administrative Law, also claims that Stellantis was excluded from the regulatory meetings with other automakers in retaliation. This was due to the company’s support of litigation against CARB regarding its more stringent requirements compared to the U.S. Environmental Protection Agency’s standards. The filing also says that CARB failed to give public notice about the framework agreements, violating California state law. Stellantis’ attorneys say that because the agreements between the select automakers and CARB did not undergo the required public comment scrutiny, the agreements are invalid.

“Ultimately, when determining whether an OEM may enter a Framework Agreement, CARB has classified OEMs according to whether they publicly agreed with CARB during a good-faith dispute, and created a parallel, underground regulatory scheme to place OEMs that did not actively agree with CARB at a competitive disadvantage.” –Stellantis’ lawyers, in the petition.

CARB has not issued an official response as of publication.