U.S. Rumored to Soften Emission Targets, Slow EV Adoption Push

Reports are circulating that the United States Environmental Protection Agency (EPA) will soften vehicle emissions targets against the stringent metrics proposed by the group in 2023. This follows lackluster EV adoption rates that run counter to the plan and pushback from dealer organizations, automakers, and consumer groups. But we need to take a closer look at the story, because things are rarely as simple as initially presented.

The transition to all-electric vehicles isn’t progressing in America as quickly as certain governments and economic policy groups would like. Even global car manufacturers, which have vocally supported the transition to EVs, have been complaining. The Biden administration opted to mimic European EV emissions benchmarks despite the United States having vastly different needs, unique infrastructure requirements and consumer tastes. As U.S. law technically prohibits outright vehicle bans, the federal government has adopted emissions policies and a regulatory landscape that would effectively accomplish the same task. While the scheme was praised by environmental groups, it never seemed particularly realistic to the masses.

In April of 2023, the EPA proposed requiring a 56 percent reduction in new vehicle emissions by 2032. The assumption was that the benchmark would force electric vehicle sales to represent over half of the new-car market by 2030 and nearly to 70 percent by 2032. However, according to Reuters, those targets are about to be walked back before the final ruling is announced next month. Unnamed sources with direct knowledge of the matter, told the outlet that the new targets are anticipated to result in EVs accounting for “less than 60 percent” of the total vehicles produced by 2030.

From Reuters:

The UAW, which endorsed Biden in January even as Republican Donald Trump argues that Biden's vehicle rules threaten auto jobs, says the EPA proposal should be revised to increase stringency "more gradually" and occur over a "greater period of time."

The Alliance for Automotive Innovation, a trade group representing General Motors, Ford Motor Co., Stellantis, Toyota Motor Corp., Volkswagen Group and others, last year called the initial EPA proposal "neither reasonable nor achievable" and urged "adopting requirements for 40 to 50 percent (electric, plug-in electric and fuel vehicles) in 2030." EVs accounted for about 8 percent of sales in 2023.

AAI CEO John Bozzella said on Sunday that the next few years are critical for the EV market.

"Give the market and supply chains a chance to catch up, maintain a customer’s ability to choose, let more public charging come online, let the industrial credits and Inflation Reduction Act do their thing and impact the industrial shift," Bozzella said.

Your author would argue the later group complaining is indicative of nothing and the next few years are always said to be "critical" for the industry. Automakers typically whisper into the government ear to negotiate whatever policies the ruling party might be willing to run with. If you’re governed by people who are dead set on electrification and instituting loads of regulatory pressure, industry lobbyists will ask for financial subsidies and regulatory schemes that favor their businesses. If you happen to have leaders that favor deregulation and more consumer choice, those same entities will try to petition the government into removing any older rules they believe handicap productivity. Typically, both tactics are used at the same time.

This is what’s happening right now. The AAI has made cases both for and against electrification in the past. But it is presently advocating for the government to ease off regulatory metrics that force the industry to build smaller engines and make it difficult for new companies to compete while also suggesting those lucrative preexisting EV subsidies remain in place — something your author has been rattling against for years.

The New York Times first reported the possibility of shifting EPA plans over the weekend, stipulating that the overarching strategy remained to increase EV adoption rates through 2032. Things would simply be happening at a slightly slower pace, with come important caveats we have to consider.

Last week, the Alliance for Automotive Innovation met with the White House and EPA to discuss the revised proposal. Tesla, which is the only large automaker not represented by the lobbying group and appears to have a contentious relationship with the Biden administration, likewise visited the White House on February 9th.

That said, this assumed softening comes after targets were already raised beyond what just about everyone thought was even possible. It needs to be made crystal clear that the above does not reestablish older standards boasting more leniency, but instead gently walks back some of the lofty targets previously proposed under the Biden administration. The assumption is that regulators are simply easing up on the throttle, not pressing the brake to reevaluate the programs top to bottom. No matter how you slice it, the end goal remains ubiquitous automotive electrification within the next decade.

In fact, U.S. regulators have actually been discussing the possible implementation of new items that may force automakers to add novel filters on every new gasoline-powered vehicle sold. The claim is that such devices (akin to catalytic converters) may be the only way to reduce particulate matter to the levels the EPA would like. But there are concerns that such items could be difficult to implement without creating headaches for both manufacturers and vehicle owners.

There have likewise been concerns about the Energy Department’s plan to change how it determines fuel economy relative to combustion vehicles for EVs. The concern is that new standards may also impact how combustion vehicles are regulated and ultimately increase emissions fines on products that would have previously been deemed acceptable. The Department of Transportation is likewise discussing making changes to Corporate Average Fuel Economy (CAFE) standards and how they’re calculated. At a minimum, changing CAFE standards will likely be accompanied by loads of consequences — unintended or not.

The EPA has said the present emission proposals are under internal review and that it’s focused on achievable goals that guarantees economic growth and a reduction of air pollution. Reuters quoted White House climate adviser Ali Zaidi as saying the nation will be “harnessing the power of smart investments and standards to ensure U.S. workers will lead, not follow, the global auto sector.”

A formal announcement on the matter is expected sometime in March or early April. Meanwhile, the White House has been reviewing the other proposals with news on the CAFE adjustments and changing fuel economy policies expected in the spring.

[Image: ZikG/Shutterstock]

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