The Trump administration's proposal would freeze fuel-efficiency standards at 2020 levels - about 37 miles per gallon by 2026, down from the Obama administration's almost 47 mpg - and weaken electric vehicle mandates.
States that joined the lawsuit said the change would end up costing more money at the pump because vehicles won't go as far on a gallon of gas, and more misery for those suffering pollution-exacerbated maladies such as asthma.
General Motors said in a statement that it wants to work "with all parties to achieve one national 50-state program", adding that it was committed to "continually improving fuel economy and our commitment to an all-electric future".
Good on Trump. These environmentalist fatwas are responsible for driving up the cost of cars and creating millions of debt slaves out of people who have to take out loans now stretching seven years to pay off, all over the phony narrative that burning fossil fuels cause global warming. At the moment, the state standard and the national one are the same-but if they diverged, automakers could end up making multiple versions of each vehicle to sell in different parts of the U.S. The Trump administration wants to take away California's right to set higher standards.
The Trump administration is also trying to stop California and other states from being able to impose their own, stricter fuel-efficiency standards.
The Environmental Protection Agency said in a statement that relaxing mileage standards in the years ahead would give "the American people greater access to safer, more affordable vehicles that are cleaner for the environment".
The argument may prove a tough sell in court, where attorneys for states and environmental groups will come armed with a wealth of data undermining it.More news: ATP roundup: Murray ekes out win in Washington
More news: Rudy Giuliani: Collusion Isn't Even A Crime
More news: Trump tweet on Muller probe "opinion not order": White House
The auto industry, which has often baulked at the higher costs associated with the tougher USA standards, strongly backs a national standard that could be negotiated between Washington and California.
"If the standards threatened auto jobs, then common-sense changes could have and should have been made".
"They don't offer any meaningful example of what has changed so dramatically" to warrant the reversal, said Jeff Alson, who until this spring was a senior engineer in the EPA's transportation and air quality office.
But the Trump administration has consistently criticized the policy as bad for the auto industry. California received the exemption - the only state to do so - decades ago because it was already developing its own standards when federal rules were being written.
More than a dozen states follow California's standards, amounting to about 40 per cent of the country's new-vehicle market.
At a May meeting in the White House, auto firms appealed to Trump to tap the brakes on the administration's aggressive rollback plan.
Environmental groups in ME, which is among the states that adopted California's tougher emissions requirements for new cars, and around the country quickly denounced the widely anticipated move.
Now they're only about one-third, with less-efficient trucks and SUVS making up the rest.