New Mexico electric vehicle mandates to remain in place as auto dealers fight the new rules

ALBUQUERQUE, N.M. (AP) — Mandates for auto dealers to provide an increasing number of electric vehicles for sale across New Mexico will remain in place as state regulators on Friday denied an effort to derail implementation of the new rules pending a legal challenge.

Members of the state Environmental Improvement Board voted 4-1 after deliberating behind closed doors, marking a setback to the New Mexico Automotive Dealers Association as it pursues its challenge before the state Court of Appeals.

Democratic Gov. Michelle Lujan Grisham has been pushing for more electric vehicles in the state, saying doing so will curb emissions and help address climate change. The state has adopted more stringent standards for vehicle emissions and established the mandates for inventories of zero-emission vehicles, winning praise from environmentalists.

But local auto dealers and others, including Navajo Nation President Buu Nygren, are concerned that the mandates will have negative effects particularly for rural communities that lack electric vehicle charging infrastructure. They also have argued that affordability is an issue for consumers on the Navajo Nation and across New Mexico.

Republicans in the legislative minority also have criticized the governor's plans as impractical, citing the range that many people have to drive in New Mexico — which is the fifth largest state in the U.S., although sparsely populated.

Starting in 2026, 43% of all new passenger cars and light-duty trucks shipped to New Mexico auto dealerships by national auto manufacturers must be zero-emission vehicles. The rules also call for 15% of all new commercial heavy-duty trucks to be zero-emission vehicles.

By 2032, four out of every five passenger cars shipped to the state by manufacturers must have zero emissions.

"These standards are poised to slash harmful tailpipe pollution and save lives as they make New Mexico households, businesses, and economy less tethered to volatile and costly gasoline that damages our climate," the advocacy group New Mexico Clean Air said in a statement after Friday's vote.

The Albuquerque-Bernalillo County Air Quality Control Board, which covers the most populated area in the state, also supports the rules.

While New Mexico is pushing ahead with its clean car initiatives, federal regulators have opted to relax initial tailpipe limits that were proposed last year. That decision followed news that EV sales were beginning to slow in December.

Carlos Garcia, with Garcia Automotive Group, one of the largest car dealership networks in the state, had testified that the EV market was flat despite claims made by environmentalists. He pointed to recent announcements that Toyota, Honda, Ford and other major manufacturers were cutting their forecasts and EV spending.

"It is clear that this rule has far-reaching effects beyond air quality and will impact every New Mexican socially and economically, not just car dealers and the thousands of employees in the automotive industry," he said in written testimony. "The economic implications this rule forces on all New Mexicans will cause irreparable harm to many."

Critics also said the tax incentives promised by Democratic legislative leaders for electric vehicles are income restricted and capped at prices that ends up excluding much of the market. Garcia said not one pickup truck would qualify for the incentive.

Some board members had questioned during the hearing in March if delaying implementation of the mandates would signal a rolling back of the momentum in New Mexico. Dealers argued the market isn't ripe yet, but environmentalists said the state would be among the leaders nationally if it sticks with its emission standards and the benchmarks for EV sales.