COURTS
Court ruling leaves electric vehicle mandates on track in New Mexico
Federal actions might block implementation of EV rules
A panel of judges handed a setback this month to New Mexico auto dealers attempting to derail mandates requiring manufacturers to deliver more electric vehicles to the state.
The ruling by a three-judge panel of the New Mexico Court of Appeals means that the state remains on track to steadily increase the share of zero- and low-emission vehicles in new car showrooms between now and 2032.
For vehicle year 2027, which starts this year, the state mandate requires that electric vehicles comprise 43% of new passenger cars and light-duty trucks delivered to New Mexico. That requirement is set to increase by 8% annually to a maximum of 82% by 2032.
The state's auto dealers argue that the mandates are unrealistic given soft consumer demand for electric vehicles in New Mexico.
Data from the state Motor Vehicle Division show that electric vehicle sales comprised only 3.23% of the 90,516 vehicles sold in New Mexico in 2025.
Auto dealers also say that despite their loss in the state Court of Appeals, actions by Congress and President Donald Trump eliminated state EV mandates, throwing the issue to the federal courts, rendering the mandates unenforceable for now.
"The market continues to prove our case for us every month," said Carlos Garcia, executive manager of Garcia Automotive Group in Albuquerque. "EV sales are going down. I wish they were going up because I'd be selling more cars and making more money."
EV sales plunged after Sept. 30, when President Trump's administration eliminated a $7,500 federal subsidy for electric vehicles on Sept. 30, said Garcia, who joined the New Mexico Automobile Dealers Association in challenging the state mandate.
"Demand basically went to nothing" after the subsidies ended, he said. Electric vehicle sales plunged from 4.6% of New Mexico vehicle sales in September to just 1.8% in December, according to state Department of Motor Vehicle registration data.
"People realized that hybrids are the more logical solution and those continue to be really viable in the marketplace," he said.
Garcia, who himself drives an all-electric Cadillac Lyriq, said he invested heavily in electric vehicles and is personally disappointed by the plunge in EV sales.
"Even though I've invested millions of dollars, it's been a losing investment for me now," he said.
Michelle Miano, director of the New Mexico Environment Department's Environmental Protection Division, said the state mandate remains viable despite federal actions.
"That action by the federal government is currently being challenged by all of the states that are participating," Miano said. At issue is a procedural vote used by Congress to invalidate state mandates, she said.
Miano also said the state mandate falls on manufacturers, not dealers.
"The requirement isn't on the dealers," she said. "It's on the auto manufacturers themselves when they make available new cars to New Mexico to be sold. It doesn't require an auto dealer to sell a certain percentage of electric vehicles."
State rules also give manufacturers "flexibilities," such as credits for zero-emission vehicles delivered in previous years and partial credits for plug-in hybrid vehicles, she said.
Miano said 14 auto manufacturers have applied for credits under the state's rules, she said.
The auto dealers appeal challenged a November 2023 action by two state boards that adopted California's mandates for zero-emission vehicle standards. New Mexico was one of 10 states that adopted similar standards.
Judge Jane Yohalem, writing for a three judge panel of the Court of Appeals, found that the federal Clean Air Act allows states to "piggyback" on California's standards as long as the rules were adopted at least two years before the mandates take effect. New Mexico adopted the rules two years before model year 2027 in compliance with federal law, the panel found.
Auto dealers also argued in their appeal that state regulators disregarded evidence that retailers were struggling to sell EVs in New Mexico, and that "EVs are skewing to high-income New Mexicans."
The court found that regulators considered the auto dealers鈥 arguments but gave greater weight to evidence that passage of the mandates ultimately would lower costs by creating a used market for EVs.
Tim Atler, attorney for the auto dealers, said he has not discussed with his clients whether he will appeal the Court of Appeals ruling.
"These regulations were assuming market conduct that just doesn't align with what New Mexico is actually doing, and that creates a huge threat" for auto dealers, Atler said.
The mandates also mean fewer options for consumers, who may look to out-of-state dealers, he said.
"For the ones who still want gas-powered vehicles, they're going to look elsewhere," he said. "And if they end up doing that, then that really undermines the purpose of the regulations."