While happy that the Biden Administration relaxed tailpipe limits, a group representing over 5,000 dealerships reiterated a more realistic goal is needed when it comes to the sale of electric vehicles (EV).
Announced on March 20 by the federal Environmental Protection Agency (EPA), the new rules require auto manufacturers to reduce emissions of greenhouse gasses contributing to climate change. The new standards would avoid more than seven billion tons of carbon dioxide emissions and deliver almost $100 billion in annual benefits, including $13 billion in health benefits as a result of less pollution, according to EPA officials.
The rules cover light- and medium-duty vehicles—cars, SUVs, vans and pickup trucks, but not 18-wheelers—from model years 2027 to 2032.
EV Concession
The Biden Administration did make a concession when it comes to EV’s. Instead of pushing automakers to sell more EVs to meet stringent pollution targets, the administration is allowing plug-in hybrids—vehicles that combine gas engines and EV-like batteries—to play.
Under the EPA’s final rule, the industry would have meet the limits if 56% of new vehicle sales are electric by 2032, along with at least 13% plug-in hybrids or other partially electric cars, as well as more efficient gasoline-powered cars that get more miles to the gallon.
The new rule does slow implementation of stricter pollution standards from 2027 through 2029, after the auto industry called proposed benchmarks unworkable. The rule ramps up to nearly reach the level the EPA preferred by 2032.
EV Voice of the Customer Concerns
The new federal guideline come as sales of electric vehicles have begun to slow. In the U.S., EV sales increased by 50% last year, to just under 10% of new car sales. But most EVs for sale right now are luxury vehicles, with relatively fewer options on the cheaper end of the scale.
But dealers said they are sitting on a growing inventory as sales are not meeting the output from manufacturers. The EV Voice of the Customer letters have cited lower sales growth in two letters to President Joe Biden since forming last year.
“Despite generous government, manufacturer and dealer incentives, our customers continue to bypass EVs over concerns about affordability, charging infrastructure, performance in cold weather, and resale value,” the group stated in a letter after the EPA’s announcement. “Worse still, the regulations spike in 2031-32 and revert to the unrealistic mandate that essentially requires that two-thirds of all vehicles sold be electric.”
Fighting Climate Change
The new rules require auto manufacturers to slash emissions of greenhouse gasses like carbon dioxide that are heating the planet, as well as air pollutants that contribute to soot and smog.
For light-duty vehicles, the EPA expects the rules will result in an industry-wide average emissions target of 85 grams of carbon dioxide per mile, representing an almost 50% reduction compared to existing standards for model year 2026 vehicles. The agency expects the average CO2 emissions target for medium-duty vehicles to fall by 44%.
“Let me be clear: Our final rule delivers the same, if not more, pollution reduction than we set out in our proposal,” said EPA Administrator Michael Regan.
President Biden’s Statement
President Joe Biden has made fighting climate change a hallmark of his presidency, pushing to slash carbon dioxide emissions from gasoline-powered vehicles that make up the largest single source of U.S. greenhouse gas emissions.
“Three years ago, I set an ambitious target: that half of all new cars and trucks sold in 2030 would be zero-emission,” Biden said in a statement, adding that the country will meet that goal “and race forward in the years ahead.”
Biden received key backing from the United Automobile Workers, who released a statement that read in part that “by taking seriously the concerns of workers and communities, the EPA has come a long way to create a more feasible emissions rule that protects workers building ICE vehicles, while providing a path forward for automakers to implement the full range of automotive technologies to reduce emissions.”
Headed to the Courts
But there is a legitimate threat of legal challenges before courts across the U.S., including the Supreme Court, that have increasingly ruled against the power of federal regulation to combat climate change. And both sides agree the infrastructure for charging cars is lacking.
Of immediate concern to dealers is the inventory is growing while incentives to buy the models are slashed, wanting federal authorities to monitor the market to provide flexibility.
“We urge the administration to track EV sales versus projections and make necessary adjustments to reflect consumer demand,” the letter from EV Voice of the Customer noted. “We can take some solace in knowing that the voice of our customers broke through enough to convince the Biden Administration to moderate the mandate in the early years.”
“But sadly the regulation stubbornly hangs on to an EV mandate that is clearly disconnected from the realities of the marketplace and the voice of the customer.”