US President Barack Obama's first major domestic climate policy achievement was the enactment of a cluster of environmental policies regarding automotive firms, in particular significant increases in fuel economy standards. Considering automakers' long history of opposition to environmental regulations in the US, Obama's achievement poses an intriguing research puzzle: how was the US able to enact environmental policy regarding the automotive industry? This article considers conventional explanations of policy adoption but also examines whether globalization, including compliance with global regulations, as well as global competition that left US manufacturers in a weakened economic and political state, influenced firms to acquiesce to environmental regulation. This article finds that globalization concerns motivated nearly all firms to acquiesce to the new policies. Policy enactment was facilitated by conditions within the industry, including global competition and production, technological developments, compliance with carbon and fuel economy regulations across the globe, and the financial and political weakness of domestic firms. Conventional explanations also help to explain policy enactment. Where executive authority existed, President Obama enacted policy via the executive branch rather than working with Congress. Policies created by the passage of legislation in Congress were shaped by presidential leadership, partisan control and outside events. Finally, policymakers built coalitions of support among domestic automakers, labor, environmental and consumer groups, and the public. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment