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Johnson put his support behind congressional efforts to hold automakers responsible for making cars safer, and in 1966, he signed the act into law "to provide for a coordinated national safety program and establishment of safety standards for motor vehicles in interstate commerce to reduce traffic accidents and the deaths, injuries, and property damage which occur in such accidents." Creation of NHTSA The National Highway Traffic Safety Administration was established by the Highway Safety Act of 1970 "to help reduce the number of deaths, injuries and economic losses resulting from motor vehicle crashes on the Nation's highways." According to NHTSA, the agency is responsible for a number of functions: Carrying out programs relating to the safety performance of motor vehicles and related equipment Regulating the corporate average fuel economy program Investigating and prosecuting odometer fraud Carrying out the National Driver Register program to facilitate the exchange of state records on problem drivers Conducting studies and operating programs aimed at reducing economic losses in motor vehicle crashes and repairs Performing studies, conducting demonstrations and promoting programs to reduce impaired driving, increase seat belt use and reduce risky driver behaviors Issuing theft-prevention standards. 1970: In 2011, Obama announced an agreement with the state of California, the UAW and 13 automakers accounting for 90 percent of U.S new-vehicle sales to increase the fuel economy of light vehicles to an average of 54.5 mpg by the 2025 model year to cut emissions and reduce U.S. dependence on foreign oil.
The invention of the automobile brought America unprecedented mobility and prosperity. It also brought a host of problems: deaths, serious injuries and property damage from crashes; environmental pollution; and angry consumers ripped off by unscrupulous business practices, just to name a few.
While the industry must navigate a thicket of varied state laws, the federal government over time has instituted a uniform code of how the auto business must operate. These laws govern how the industry plans, engineers, designs, markets and sells cars.
As Automotive News celebrates its 100-year anniversary, we are taking a look at today's topics through both a historic and future lens.
This installment looks at 10 federal policies that influence the industry to this date. The list was compiled from Automotive News archives and research from government sources.
1958: Monroney sticker
Before the 1959 model year, most consumers didn't have a clue as to the price of a new vehicle. It was a deep, dark secret known only to manufacturers and dealers.
To combat price deception by automakers and franchised dealers, President Dwight Eisenhower signed the Automobile Information Disclosure Act of 1958. The law requires manufacturers to affix a price tag to the window of each new automobile, known as a Monroney sticker — named for bill sponsor Sen. Mike Monroney of Oklahoma. The sticker must disclose the base price, engine and transmission specs, standard equipment, optional equipment and pricing, and EPA fuel economy ratings.
1965: Motor Vehicle Air Pollution Control Act
An amendment to the Clean Air Act of 1963 signed by President Lyndon Johnson, the Motor Vehicle Air Pollution Control Act authorized the government to set standards for controlling vehicle emissions, beginning with the 1968 model year.
1966: National Traffic and Motor Vehicle Safety Act
By 1965, auto crashes were the leading cause of death of people younger than 44, according to research by Encyclopedia Britannica.
A young lawyer named Ralph Nader started advocating for safer cars in 1959. His 1965 book, "Unsafe At Any Speed: The Designed-In Dangers of The American Automobile," shined a national spotlight on the issue and accused automakers of prioritizing profits over safety.
Johnson put his support behind congressional efforts to hold automakers responsible for making cars safer, and in 1966, he signed the act into law "to provide for a coordinated national safety program and establishment of safety standards for motor vehicles in interstate commerce to reduce traffic accidents and the deaths, injuries, and property damage which occur in such accidents."
The law authorizes NHTSA to issue the Federal Motor Vehicle Safety Standards, a lengthy list that goes into exhaustive detail on criteria for vehicle bodies, lighting, seat belts and more.
1970: Creation of NHTSA
The National Highway Traffic Safety Administration was established by the Highway Safety Act of 1970 "to help reduce the number of deaths, injuries and economic losses resulting from motor vehicle crashes on the Nation's highways."
According to NHTSA, the agency is responsible for a number of functions:
— Carrying out programs relating to the safety performance of motor vehicles and related equipment
— Regulating the corporate average fuel economy program
— Investigating and prosecuting odometer fraud
— Carrying out the National Driver Register program to facilitate the exchange of state records on problem drivers
— Conducting studies and operating programs aimed at reducing economic losses in motor vehicle crashes and repairs
— Performing studies, conducting demonstrations and promoting programs to reduce impaired driving, increase seat belt use and reduce risky driver behaviors
— Issuing theft-prevention standards.
1970: Creation of the EPA
Addressing heightened concerns about widespread litter and pollutants in the nation's air and water — exacerbated by the infamous 1969 fire on the Cuyahoga River in Ohio and a large oil spill in Santa Barbara, Calif. — the Environmental Protection Agency was created by President Richard Nixon to protect people's health and the environment.
The EPA and NHTSA are the primary agencies that regulate the auto industry. While the EPA has a wide range of responsibilities, a subsection of its rules are focused on limiting vehicle emissions, as well as regulating waste disposal and emissions from factories.
The agency's emissions rules have a major influence on product planning. Stringent emissions standards under President Joe Biden's EPA coincided with automakers' ambitious electric vehicle goals. But U.S. consumer resistance, insufficient charging infrastructure and high EV production costs — translating to high sticker prices — have been impediments. President Donald Trump, while campaigning for his second term, called the rules an "EV mandate" because it would take a large proportion of new vehicles sold being electric for the emissions standards to be met. He has vowed to lower the standards, as he did during his first term with rules enacted under President Barack Obama.
1975: Energy Policy and Conservation Act
After the Organization of the Petroleum Exporting Countries imposed a ban in 1973 on oil exports — penalizing the U.S. for its support of Israel in the Arab-Israeli War — and the price of automotive fuel skyrocketed, President Gerald Ford signed the Energy Policy and Conservation Act. Among its wide-ranging regulations, it set the first fuel economy goals. The CAFE program established miles-per-gallon standards beginning with 1975 model year vehicles.
In recent years, the auto industry has been caught in a tug of war over fuel economy standards and perceptions of climate change. In 2011, Obama announced an agreement with the state of California, the UAW and 13 automakers accounting for 90 percent of U.S new-vehicle sales to increase the fuel economy of light vehicles to an average of 54.5 mpg by the 2025 model year to cut emissions and reduce U.S. dependence on foreign oil. The EPA was tasked with ensuring this was achievable.
Trump, Obama's successor, balked at the stringent standards and reduced them in 2020 to about 40 mpg by 2026. After Biden defeated Trump in the 2020 election, his administration set a goal of 50.4 mpg by the 2031 model year. Trump, along with his promise to roll back EPA standards, will likely reduce fuel economy targets.
1975: Magnuson-Moss Warranty Act
Automobile buyers are protected against deceptive warranty practices under the Magnuson–Moss Warranty Act, signed into law by Ford. Also known as the "federal lemon law," it was a bipartisan initiative by Sen. Warren Magnuson of Washington, Rep. John Moss of California and Sen. Frank Moss of Utah.
Under the law, warranties must be titled either "full" or "limited," written in plain language and available wherever the vehicle is sold. It also allows consumers to be compensated if a breach of warranty occurs.
1985: Used Car Rule
The Used Car Rule, according to the Federal Trade Commission, "requires car dealers to display a window sticker, known as a Buyers Guide, on the used cars they offer for sale. The Buyers Guide discloses whether the dealer offers a warranty and, if so, its terms and conditions, including the duration of the coverage, the percentage of total repair costs the dealer will pay, and which vehicle systems the warranty covers. In states that do not permit sales of used cars 'as is,' or without warranties, dealers must display an alternative version of the Buyers Guide."
1992: North American Free Trade Agreement
Celebrated by some and criticized by others, the North American Free Trade Agreement fundamentally changed how automakers and suppliers conduct business in the region. The trade pact was agreed upon with the leaders of Canada and Mexico by President George H.W. Bush in 1992, and the the NAFTA Implementation Act was signed by President Bill Clinton in 1993. In 1994, when the pact took effect, it immediately ended tariffs on the majority of goods produced by the three nations and called for the gradual elimination of most remaining barriers to cross-border investment and to the movement of goods and services among the them.
Opinions vary on its fairness to labor, but an undeniable result has been the deep integration of the automotive supply chain. The removal of the trade barriers allowed parts, assembled components and vehicles to move freely across borders, and it has given the North American industry more leeway to optimize costs. It is not uncommon for an individual part to cross borders several times between suppliers and eventually to vehicle assembly factories.
In 2020, the Trump administration, demanding more balanced terms favoring Americans, negotiated NAFTA's replacement: the United States-Canada-Mexico Agreement. Trump is now threatening punitive tariffs against Canada and Mexico, citing illegal immigration and the flow of illegally distributed fentanyl into the U.S. as justification.
2022: Inflation Reduction Act
Biden signed a law that addresses a broad range of issues, including fighting climate change through incentivizing consumers to purchase or lease electric vehicles with tax credits of up to $7,500 for new vehicles and $4,000 for used vehicles. The act is remarkable because congressional Democrats universally approved it while their Republican counterparts all rejected it.
Trump, with the support of the now GOP-controlled Congress, said he will rescind the credit soon. Meanwhile, automakers and dealers are preparing for the fallout — if it comes to pass. EV sales growth is slowing, and losing the credit could be a significant setback.
Unclear, however, are the Trump administration's plans for provisions in the act that are driving investment in EV and battery factories, many of them in states that secured Trump's reelection.
Throughout 2025, we will honor our legacy by connecting topics of today with our historical coverage as we look ahead to the next 100 years.
Copyright Crain Communications, Incorporated Mar 17, 2025