ST. PAUL — Minnesota auto dealers worry that plans to implement California vehicle emission regulations here will put an end to one of their key business practices.
When a customer asks for a car not in stock, a dealership will commonly trade vehicles for it with a competitor. Dealer trades, as they are called, are said to help sales people find the makes, models, colors and features that their clients request.
But if state regulators only allow new cars that meet stricter emissions standards to be sold in Minnesota, dealers fear that they won't be able to trade them with their counterparts in neighboring states. That could pose a particular challenge for dealerships near the state border.
"Minnesota would be an island," said Laurel Nelson, general manager of Nelson Auto Center in Fergus Falls.
Supporters of the Clean Cars Minnesota program, which would require manufacturers to deliver more low-emission and electric vehicles to sell in the state, say that it will help to reduce pollution caused by greenhouse gas emissions and circumvent federal deregulation. If adopted, Minnesota would switch to the same emission standards used in California.
The soonest that could happen would be in 2023. Eleven other states have adopted both California's low-emission and electric car standards.
The rule change was proposed by the Minnesota Pollution Control Agency under Gov. Tim Walz's administration. It is being challenged by state Republican legislators, who this session introduced a bill that would halt it and curb the agency's power to regulate vehicle emissions.
MPCA spokesperson Mary Robinson said that if the rule change is implemented, dealers would still be able to trade for cars across state lines because California's low-emission vehicle standard, or LEV, is essentially identical to the federal greenhouse gas emission standard.
That could change if the state and federal standards were ever to diverge.
But even if they were at odds, Robinson said, a Minnesota dealer would still be able to trade one LEV-certified vehicle for another with an out-of-state business. Dealers would not, however, be able to trade for non-LEV-certified cars.
Such a divergence could prove troublesome for dealers that rely on trades, which continue to be popular. Nelson estimated that around 400 of the roughly 1,000 new cars that Nelson Auto Center sells each year acquired by trade.
"A lot of times I find them out of Fargo," Nelson said. "It can be anywhere."
Hawkins Chevrolet owner Tom Hawkins said his Fairmont dealership frequently trades new cars with associates in Iowa and South Dakota. The rule change, he said "would put us at a huge disadvantage."
Critics of the rule change, as well as the Minnesota Automobile Dealers Association, also take issue with its potential to drive up new car prices. According to one U.S. Environmental Protection Agency report, clean car standards could increase upfront costs by about $800.
The same report found that those standards save motorists on operating costs over the course in the long run.
Car dealers, meanwhile, say they aren't opposed to cleaner vehicles or electric powered ones. But for the most part, they said there isn't much of a demand for them in the region.
Steve Whitaker, president of Whitaker Buick GMC in Forest Lake, said that if new standards are to be adopted then they should be the same for all states.
"It's not that we aren't concerned about the environment because we are," he said.
The MPCA is slated to publish a state-specific analysis on the clean car proposal, which will include cost estimates, this spring. The language of the proposal itself is slated to be published and opened for public comment at the same time.
The state Senate version of the bill that would kneecap the program has been approved by two chamber committees, though it has made less progress in the House.