Biden administration announces rules to boost electric vehicles

WASHINGTON – The Biden administration on March 20 issued one of the most significant climate regulations in US history, a rule designed to ensure that the majority of new passenger cars and light trucks sold in the country are all-electric or hybrids by 2032.

Nearly three years in the making, the new tailpipe pollution limits from the Environmental Protection Agency (EPA) would transform the automobile market in the United States. A record 1.2 million electric vehicles (EVs) rolled off dealers’ lots in 2023, but they made up just 7.6 per cent of total US car sales, far from the 56 per cent target under the new regulation. An additional 16 per cent of new cars sold would be hybrids.

Cars and other forms of transportation are, together, the largest single source of carbon emissions generated by the US, pollution that is driving climate change and that helped to

make 2023 the hottest year in recorded history.

Electric vehicles are central to President Joe Biden’s strategy to confront global warming, which calls for cutting the nation’s emissions in half by the end of this decade. But EVs have also become politicised and are becoming an issue in the 2024 presidential campaign.

“Three years ago, I set an ambitious target: that half of all new cars and trucks sold in 2030 would be zero-emission,” said Mr Biden in a statement. “Together, we’ve made historic progress. Hundreds of new expanded factories across the country. Hundreds of billions in private investment and thousands of good-paying union jobs. And we’ll meet my goal for 2030 and race forward in the years ahead.”

The rule increasingly limits the amount of pollution allowed from tailpipes over time so that, by 2032, over half the new cars sold in the US would most likely be zero-emissions vehicles in order for carmakers to meet the standards.

That would avoid more than seven billion tonnes of carbon dioxide emissions over the next 30 years, according to the EPA. That is the equivalent of removing a year’s worth of all the greenhouse gases generated by the US, the country that has historically pumped the most carbon dioxide into the atmosphere. The regulation would provide nearly US$100 billion (S$134 billion) in annual net benefits to society, according to the agency, including US$13 billion of annual public health benefits, thanks to improved air quality.

The standards would also save the average American driver about US$6,000 in reduced fuel and maintenance over the life of a vehicle, the EPA said.

The transition to EVs would require enormous changes in manufacturing, infrastructure, technology, labour, global trade and consumer habits.

And it has become politically fraught.

Former president Donald Trump, who is campaigning to retake the White House from Mr Biden in November, has sought to weaponise EVs, repeating false claims during campaign rallies about their performance and affordability and using increasingly heated rhetoric. Most recently, he warned of a “bloodbath” in the middle of remarks about electric vehicles.

The American Fuel & Petrochemical Manufacturers, a lobby group, has started what it says is a “seven-figure” campaign of advertising, phone calls and text messages against what it falsely calls “Biden’s EPA car ban” in the swing states of Pennsylvania, Michigan, Wisconsin, Nevada and Arizona, as well as in Ohio, Montana and the Washington, DC, markets.

The EPA regulation is not a ban. It does not mandate the sales of electric vehicles, and gas-powered cars and trucks could still be sold. Rather, it requires carmakers to meet tough new average emissions limits across their entire product line. It is up to the manufacturers to decide how to comply.

Under the Clean Air Act, the agency can limit the pollution generated by the total number of cars sold each year. EPA officials said automakers could comply with the emissions caps by selling a mix of conventional petrol-burning cars, hybrids, electric vehicles or other types of vehicles, such as cars powered by hydrogen. The new regulation, which would not apply to sales of used automobiles or light trucks, would take effect starting with model year 2027.

Car companies that exceed the new restrictions could face substantial penalties.

Mr John Bozzella, president of the Alliance for Automotive Innovation which represents 42 car companies that produce nearly all the new vehicles sold in the US, said in a statement that the new rule was “a stretch goal” but one that offered some flexibility. “The rules are mindful of the importance of choice to drivers and preserve their ability to choose the vehicle that’s right for them.”

But the rules are expected to face an immediate legal challenge by a coalition of fossil fuel companies and Republican attorneys-general, complaints that are likely to wind their way to the Supreme Court.

“They may wish for us all to drive EVs or no cars at all, but at the end of the day that’s not their decision,” said Ms Elizabeth Murrill, the attorney-general of Louisiana, a major oil and gas producing state that has been involved in a series of lawsuits challenging the Biden EPA. “There is a limit to their authority to remake society in their own vision and the court has realised that.”

The auto emissions rule is the most impactful of four major climate regulations from the Biden administration, including restrictions on emissions from power plants, trucks and methane leaks from oil and gas wells. The rules come on top of the 2022 Inflation Reduction Act, the biggest climate law in the nation’s history, which is providing at least US$370 billion in federal incentives to support clean energy, including tax credits to buyers of electric vehicles.

The policies are intended to help the country meet Mr Biden’s target of cutting US greenhouse emissions in half by 2030 and eliminating them by 2050. Climate scientists say all major economies must do the same if the world is to avert the most deadly and costly effects of climate change.

“These standards form what we see as a historic climate grand slam for the Biden administration,” said Mr Manish Bapna, president of the Natural Resources Defence Council Action Fund, a political action committee that aims to advance environmental causes.

Mr Bapna’s group has calculated that the four regulations, combined with the Inflation Reduction Act, would reduce the US’ greenhouse emissions 42 per cent by 2030, getting the country most of the way to Mr Biden’s 2030 target.

Trump has promised to delete those climate programmes should he return to the White House.

The Biden administration is racing to finalise climate regulations to protect them from one looming threat in a polarised political climate: According to statute, as long as the rules are published more than 60 legislative days before the end of the presidential term, they cannot be eliminated by a simple majority vote in Congress.

In writing the final tailpipe regulation, the administration relaxed some elements in a concession to carmakers and their biggest union, the United Auto Workers.

Even though major auto companies have been investing substantially in building and marketing all-electric vehicles, they have complained that the pace of change required under the rule as originally proposed a year ago was too rapid.

Unionised autoworkers, who fear a rapid transition to electric vehicles because they have fewer parts that require fewer workers to produce, and because many new EV plants are being built in states that do not support union labour, told the White House the same thing.

In a statement on March 20, the United Auto Workers said the EPA had “come a long way to create a more feasible emissions rule” that would protect workers who build gas-powered cars while creating a path for carmakers to “implement the full range of automotive technologies to reduce emissions”.

Mr Biden needs both cooperation from the auto industry and political support from the unionised autoworkers who backed him in 2020. The auto industry employs thousands of voters in Michigan, a swing state that could determine who will win the White House in November.

In response, the final EPA rule relaxed the pace at which automakers must comply with the rule in its early years, ramping it up sharply only after 2030.

That lowers the number of EVs that automakers must sell before 2030, and it also means that emissions will go down more slowly. Climate scientists have warned that emissions must drop sharply and quickly in order to stave off the most catastrophic impacts of climate change.

EPA officials said the final rule would still cut the same amount of emissions over 30 years.

Asked about that trade-off, Mr Michael Regan, the administrator of the EPA, said the changes were designed to lead to a “stronger, more durable” policy, in other words, one less likely to be rolled back by a future administration or the courts. “We’re not sacrificing the environmental gains we want to see,” he said.

Even if the new EPA limits survive legal challenges, a transition away from the internal combustion engine depends on a number of other factors.

A lack of public charging stations for electric vehicles remains a problem. While more than 172,000 were installed in 2023, analysts project that the nation will need more than 2 million chargers by 2030 to support the growth in electric vehicles envisioned by the EPA regulation.

At the same time, growth in sales of electric vehicles is slowing, even as the new regulations would require a nearly ten-fold increase in such sales within just eight years.

Buyers of new electric vehicles are eligible for up to US$7,500 in federal tax credits, but only 18 models are currently eligible for that full credit, down from about two dozen in 2023. One of those eligible models, the Ford F-150 Lightning, an all-electric pickup truck that once had a waiting list of 200,000, last year saw sales of 24,000, far short of the 150,000 sales projected by Ford.

“At the end of the day, this is going to be up to consumers,” said analyst Stephanie Brinley for the auto intelligence service at S&P Global Mobility. “They’re being asked to change their patterns of what they drive, what they buy, how they interact with their vehicles. And you can’t push them faster than they are going to go.” NYTIMES