EPA’s proposal for 2020 carbon dioxide standards: “This is the single most important regulatory initiative by the Biden administration… to make history”
The new standards are so strict that, according to the EPA’s estimates, up to 67% of new vehicles sold in 2032 may have to be electric in order for carmakers to be in compliance.
The EPA administrator called the proposed pollution standards the “strongest-ever federal pollution standards for cars and trucks.” The rules could prevent the release of ten billion tons of carbon dioxide by 2055.
He said during the call with reporters that they were going to achieve this future together. It is within our grasp and we are in control of it. Don’t make a mistake about it.
Margo Oge, a former EPA official and the chair of the board of the International Council on Clean Transportation, called the regulations “the single most important regulatory initiative by the Biden administration … to really reduce the worst impacts of climate change.”
“The administration is going to make history — if indeed, at the end of the day, they finalize these ambitious standards,” she said in a press conference arranged by the Environmental Defense Fund, an advocacy group.
Proposed EPA Rules for Electric Vehicles: Implications for the U.S. Auto Industry and its Coalition with the Inflation Reduction Act
Medium-duty vehicles, like delivery trucks and tractor-trailers, are being proposed by the EPA as part of the new rules for cars, trucks and SUVs. If finalized, the EPA predicts these would lead to 50% of buses and 25% of long-haul tractor trailers being electric by 2032.
The federal government set standards for fuel economy, but new proposals are expected soon. These are also separate from — and designed differently than — the zero-emission vehicle mandates adopted in California and some other states.
Instead, it sets a standard for emissions, on average, based on the size and type of vehicle being built. The agency says those new rules are so stringent that it believes companies will need to produce 67% zero-emission vehicles to meet them.
Automakers have made plenty of promises about electric vehicles. General Motors, Ford, and Volvo—some of the more ambitious—have pledged to sell only zero-emission cars by at least 2035. That’s quite a commitment, as only 14 percent of new cars sold globally last year were electric, with the share in the US being half that.
However, companies have different timelines for when they planned to go electric, and many were not publicly planning on being anywhere close to two-thirds electric in the U.S. by 2032.
The analysis by the EPA concluded that drivers would save money since they were cheaper to operate. Car buyers may also benefit from tax credits of up to $7,500.
And it’s certainly true the Biden administration offered many carrots to persuade the auto industry to go electric, in addition to this regulatory stick.
Two years ago, a bipartisan infrastructure deal put $7.5 billion into building a national EV charging network so that drivers powered by plug could one day roam without fear. Just last summer, the Inflation Reduction Act created new incentives for businesses thinking of electrifying their own fleets of cars and trucks, and launched new tax credits rewarding companies that manufacture batteries and electric cars in the US.
The proposed regulations will be open for comment, and car makers will likely be very vocal about expressing what they consider they can actually achieve over the next decade.
The rules are likely to get backlash. Republican states, led by Texas, have already sued the EPA over the current version of these vehicle standards, arguing that the body overstepped its authority in crafting those rules with an eye to EV adoption.
The alliance for automotive innovation, the trade group for major auto manufacturers, is defending the EPA’s right to set the standards.
At the same time, driving ranges will increase, fast charging will be easier and more accessible and owners will enjoy greatly reduced operating costs, Harto said. EV batteries expected to be in use in the next few years will go 30% farther on a charge and 20% faster, according to a prediction by Moody’s.
California plans to allow the sale of only fully electric and plug-in hybrid vehicles by 2035, a goal it’s on the way to meeting, according to Corey Cantor, an analyst with Bloomberg NEF. California’s size and the fact that it has over 80% market share for plug-in vehicles, including plug-in hybrid, by 2032 is a key factor in the overall US vehicle market.
Not everyone will be willing to leave a company just because it has an EV or Y-Z piece of technology. I think that when you have something like Toyota, definitely a loyal consumer base, they don’t want anything other than Toyotas.”
The Alliance for automotive Innovation, an industry group that includes most major auto makers in the country, posted a statement on its website asking for cooperation from various government agencies.
A lot needs to go right for this massive change in our automotive market and industrial base to succeed, the group wrote in its statement.
Automakers have complained that those new rules make it hard to build EVs that qualify for tax credits right now. But they have spurred new mining, battery building, and manufacturing projects in the US, the seedlings, the White House hopes, of a global car industry driven by the US and not China.
Federal money will be used to charge infrastructure and tax credits for consumers, and for manufacturers of automobiles or batteries, in the next two years, due to the Inflation Reduction Act and an infrastructure bill enacted by Congress in 2021.
The Biden administration is encouraging companies to use free trade agreements with countries that have lithium andcobalt, both of which are required to manufacture modern batteries. The administration is also encouraging domestic manufacturing in order to secure supply chains and dial back dependence on China. Some tax credits are available only if the manufacturing of batteries and vehicles take place in the United States, or if key minerals are sourced from free-trade partners such as Chile, Australia, Canada or Mexico. But so far, there are no obvious showstoppers when it comes to supplies of crucial minerals for electric-car batteries, according to the energy consultancy BloombergNEF.
“The investments are there, and these nations can theoretically provide sufficient supplies,” says Evelina Stoikou, an energy-storage analyst at BloombergNEF in New York City. But she warns that demand from Europe and other regions will rise, so it will be important for the United States to strengthen its international partnerships.