As Government EV Regulations Rise

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Sonoma, California — Subaru Corp. this fall rolled out its WRX sedan performance lineup for the 2025 model year, and noticeably missing was an updated, $40,000 WRX STI, the Sopwith Camel-winged, 300-plus horsepower hellion. Previous generations of the STI are known for wowing cars 'n' coffee gatherings and speeding past more pricey Porsches at track days.

"In the current regulatory environment, it's not possible to sell a vehicle with that kind of capability," Subaru Product Line Manager Chris Charles said at a Subaru media event here. Automakers are facing federal and state fines if their product lineups don't meet emissions targets.

Not since the 1974 CAFE laws has the U.S. auto industry been under so much government regulatory pressure. Familiar patterns are emerging — Chrysler (now part of Stellantis NV) is in financial duress, regulations have opened the door for low-cost Asian competitors, and low-volume, high-power, internal-combustion-engine enthusiast vehicles are getting the axe.

Subaru, for example, acknowledged the difficulty of meeting current federal regulations but said the larger concern is so-called Section 177 states that have adopted California's tough emissions mandates — states including Maine, Massachusetts, New York, Oregon, Vermont and Washington, where foreign makes like Subaru sell well.

Fifty years ago, Detroit muscle cars like the AMC Javelin, Dodge Challenger, Plymouth Barracuda and Pontiac GTO were canceled. Fast forward to today, and once again, popular models like undefined, Dodge Charger and Chevy Camaro also have been shelved.

This time, it's not just Detroit performance brands feeling the pain. In addition to Japan's Subaru STI, European performance icons like undefined, Audi TT and ICE Porsche 718 are ending production.

"These performance vehicles aren't coming back, and with regulations in place we don't expect any model changes until after the 2028 model year," said Stephanie Brinley, S&P Global associate director of auto intelligence. "Automakers have to meet emissions requirements 18 months before the model year."