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24 May 20244 minute read

Industrials Regulatory News and Trends - May 24, 2024

Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal, and regulatory landscape.

NHTSA investigates Fisker automatic braking complaints as AEB rule is finalized. On May 10, the National Highway Traffic Safety Administration opened a preliminary investigation of 6,813 Ocean SUVs made by California-based Fisker in 2023, after complaints that the automatic emergency braking system used in the electric vehicles had activated inadvertently. NHTSA said its Office of Defects Investigation has received eight complaints alleging that the braking system had activated without an apparent roadway obstruction in the vehicle's forward path, resulting in sudden deceleration of the vehicle. Fisker is not the first manufacturer to struggle with this technology. Just last month, NHTSA opened an investigation of about 3 million Honda vehicles due to similar reported issues. NHTSA’s recent investigations come on the heels of the Agency announcing a new federal rule that will require all new cars and light trucks sold in the US to be equipped with automatic emergency braking systems by 2029.

Texas set to challenge an EPA rule on greenhouse gas emissions. On May 15, the Railroad Commission of Texas (the RRC) voted to refer a new EPA greenhouse gas emissions rule to the state’s attorney general – the first step in challenging the rule in federal court. RRC Chairman Christi Craddick stated that while the EPA rule aims to decrease carbon dioxide emissions, it “imposes strict but untested standards in what will likely result in unreasonable infrastructure costs, which could force coal plants to shut down and reduce the ability of natural gas-fired power plant to operate at full capacity.” Craddick called the rule “another example of the Biden Administration’s concerted effort to limit energy production at the expense of the American consumers.” The RRC no longer has authority over railroads operating in Texas; it is the state agency with primary regulatory jurisdiction over the oil and natural gas industry, natural gas utilities and infrastructure, and coal and uranium surface mining operations.

Latest US moves on EVs. The US Department of the Treasury has published final regulations regarding federal income tax credits for the purchase of qualifying new and previously owned clean vehicles. The Regulations, published on May 6, 2024, are scheduled to take effect on July 5, 2024. That same day, the US Department of Energy published a Final Interpretive Rule defining the term “foreign entity of concern” and its scope and application for purposes of funding of battery manufacturing-related projects under the Infrastructure Investment and Jobs Act, and for IRC Section 30D (new clean vehicle tax credits) eligibility under the IRA. Finally, the US has imposed substantial tariff increases on electric vehicles and batteries imported from China, including a quadrupling of tariffs on electric vehicles from 25 percent to 100 percent. See our alert.

US Senate approves reauthorization of FAA. On May 10, the US Senate, by an 88-4 vote, passed a $105 billion bill designed to improve safety and customer service for air travelers, a day before the law authorizing the Federal Aviation Administration expires. The bipartisan bill aims to boost the number of air traffic controllers, improve safety standards, and make it easier for customers to get refunds after flights are delayed or canceled. It “gives the FAA the stability it needs to fulfill its primary mission – advancing aviation safety – while also making travel more convenient and accessible,” said Senate Commerce Committee Chairwoman Maria Cantwell (D-WA). The House of Representatives now needs to pass the bill.

Two senators push for defense budget boost. On May 8, Defense News magazine reported that US Senate leaders on both sides of the aisle had called for an increase to the fiscal 2025 military budget beyond the $895 billion cap imposed by last year’s debt ceiling deal. Senator Jon Tester (D-MT), chair of the Defense Appropriations Committee, and Senator Susan Collins (R-ME), the ranking Republican on the committee, made the case for a higher FY 2025 defense budget during a May 8 hearing with General Charles Q. Brown, Jr., Chairman of the Joint Chiefs of Staff, and Defense Secretary Lloyd Austin. To support their stance, the senators cited the need for the military to keep up with evolving technologies and address global tensions in a time of inflation. Senator Collins said, “We must be clear eyed that this budget request would represent a real cut in funding for the Department of Defense as it fails to keep pace with inflation.” Defense News described their call for lifting the debt ceiling spending caps as an “uphill battle.”