SEMA sues U.S. government over Replica Car Law

The Specialty Equipment Market Association (SEMA) has filed a petition in federal appellate court to require the government to allow replica car manufacturers to immediately begin production.

Under a 2015 law—the Fixing America’s Surface Transportation Act (FAST Act)—low volume automakers may sell up to 325 replica cars each year that resemble production vehicles manufactured at least 25 years ago. The FAST Act set a deadline of December 4, 2016, for the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) to issue any necessary regulations to implement the law.

The agency has yet to take any action.

Prior to enactment of the FAST Act, the U.S. had just one system for regulating automobiles, which was established in the 1960s and designed for companies that mass-produce millions of vehicles. The lack of regulatory flexibility prevented small businesses from manufacturing turnkey vehicles. Eager to produce replica vehicles under the new law, many companies made capital investments and took customer orders on the assumption that sales could begin in late 2016. However, NHTSA has failed to issue regulations or undertake any other action allowing the small automakers to produce and sell vehicles as permitted by law.

“SEMA warned NHTSA in 2018 that it would file suit if companies could not begin production of turnkey cars as authorized by the FAST Act,” said SEMA President and CEO Christopher J. Kersting. “SEMA has made every effort to work collaboratively with NHTSA for over three and a half years, although the agency has taken no action to implement the replica car law. Consequently, companies have not hired workers, businesses have lost money, and consumers have been denied their rights to purchase replica cars.”

Vehicles produced under the FAST Act will be current model year clean cars. The U.S. Environmental Protection Agency and the California Air Resources Board have developed guidelines and regulations to confirm that the engine packages to be installed will meet current emissions standards.

The replica car provision was designed to be easy for NHTSA to implement, as it is an extension of the common-sense approach to overseeing kit car production that the agency has employed for decades. While the FAST Act requires NHTSA to “issue such regulations as may be necessary” to implement the law, the agency also has other options such as issuing a guidance document that will allow production to begin immediately. SEMA has asked the court to compel NHTSA to take action.

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