The Biden administration is unveiling final rules on Wednesday that make it easier for automakers to continue selling gas-powered models and slows the projected transition to electric vehicles through 2030.
The Environmental Protection Agency's (EPA) rule, which weakens yearly emissions targets through 2030 over the more stringent plan proposed in April 2023, is a win for Detroit automakers and other companies selling gas-powered models and plug-in hybrid vehicles.
The EPA said the plan cuts fleetwide tailpipe emissions by 50% over 2026 levels and reduces greenhouse gas emissions by 7.2 billion tons through 2055 and provide nearly $100 billion of annual net benefits, including $62 billion in reduced annual fuel, maintenance and repair costs.
The administration's decision to back away from the earlier proposal that would have in effect required 67% of vehicles sold in 2032 to be fully electric may disappoint voters who want the government to take more aggressive action to confront climate change.
Some environmental groups have already expressed dismay at signs the White House intended to soften the EPA tailpipe rules. Tesla (TSLA.O), some Democrats in Congress and others had urged EPA to finalize even tougher rules.
The EPA's revised proposal reflects the political squeeze Biden faces in his re-election campaign. For both Biden and his Republican rival, Donald Trump, the road to the White House goes through Michigan and other industrial states such as Wisconsin and Pennsylvania where workers fear that the shift to electric vehicles could threaten jobs. Trump has repeatedly excoriated EVs.
'MULTIPLE CHOICES'
The EPA stressed automakers will have flexibility to choose among different technologies, including "advanced gasoline," hybrids, plug-in hybrids and fully electric vehicles.
"We designed the standards to be technology neutral and performance-based to give manufacturers the flexibility to choose which combination of pollution control technologies are best suited for their consumers," EPA Administrator Michael Regan told reporters. "There is absolutely no (electric vehicle) mandate -- there are multiple choices that the industry can make to comply with this technology standard."
"Let me be clear, our final rule delivers the same, if not more pollution reduction than we set out at proposal," he added.
The EPA did not immediately explain why a drastic reduction in forecasted EV adoption did not affect its projections for pollution reductions.
The change in the final rules reflects lobbying by automakers, car dealers and the United Auto Workers union that the standards should give the industry more latitude, rather than pushing for a rapid transition to an all-electric fleet.
The Alliance for Automotive Innovation, a trade group representing nearly all automakers except Tesla, said "moderating the pace of EV adoption in 2027, 2028, 2029 and 2030 was the right call because it prioritizes more reasonable electrification targets in the next few (very critical) years of the EV transition." It added that the rules preserve Americans "ability to choose the vehicle that's right for them.”
The EPA in early 2023 projected EVs would account for 60% of new vehicles sold in 2030 and 67% by 2032 -- up from 8% in 2023.
Under the final rules, the EPA projects that from 2030-2032 EVs may account for about 30% to 56% of new passenger cars and trucks. The EPA yearly stringency targets accelerate in 2031 and 2032.
