Biden administration seeks to boost fuel economy to thwart Trump rollback

The Biden administration wants automakers to raise gas mileage and cut tailpipe pollution between now and model year 2026, and it has won a voluntary commitment from the industry that electric vehicles comprise up to half of US sales by the end of the decade.

The moves are big steps toward President Joe Biden's pledge to cut emissions and battle climate change as he pushes to shift the nation away from internal combustion engines to battery-powered vehicles.

The administration on Thursday announced there would be new mileage and anti-pollution standards from the Environmental Protection Agency and Transportation Department. In addition, it said the auto industry had agreed to a goal that 40% to 50% of new vehicle sales be electric by 2030.

Both the regulatory standards and the voluntary target will be included in an executive order that Biden plans to sign later Thursday.

The standards, which still have to go through the regulatory process including public comments, would reverse fuel economy and anti-pollution rollbacks done under President Donald Trump. At that time, the increases were reduced to 1.5% annually through model year 2026.

The White House didn't release information on the proposed annual increases late Wednesday, but Dan Becker, director of the safe climate campaign for the Center for Biological Diversity, said an EPA official gave the numbers during a presentation on the plan.

The official said the standards would be 10% more stringent than the Trump rules for model year 2023, followed by 5% increases in each model year through 2026, according to Becker. That's about a 25% increase over the four years.

Last week, The Associated Press and other news organizations reported that the Biden administration was discussing weaker mileage requirements with automakers, but they apparently have been strengthened. The change came after environmental groups complained publicly that they were too weak to address a serious problem.

Transportation is the single biggest U.S. contributor to climate change. Autos in the U.S. spewed 824 million tons (748 million metric tons) of heat-trapping carbon dioxide in 2019, about 14% of total US emissions, according to the EPA.

The voluntary deal with automakers defines an electric vehicle as plug-in hybrids, fully electric vehicles and those powered by hydrogen fuel cells.

Environmental groups praised the higher standards but said the administration should be moving faster.

This proposal helps get us back on the road to cleaning up tailpipe pollution, Simon Mui of the Natural Resources Defense Council said in a statement. But given how climate change has already turned our weather so violent, it's clear that we need to dramatically accelerate progress.

Scientists say human-caused global warming is increasing temperatures, raising sea levels and worsening wildfires, droughts, floods and storms globally.

Becker said the anti-pollution standards are full of loopholes, such as granting excessive credits for electric vehicle sales.

We urgently need to cut greenhouse gas pollution, and voluntary measures won't cut it, he wrote in an email. Voluntary pledges by auto companies make a New Year's weight-loss resolution look like a legally binding contract.

Several automakers already have announced similar electric vehicle sales goals to those in the deal with the government. Last week, for instance, Ford's CEO said his company expects 40% of its global sales to be fully electric by 2030. General Motors has said it aspires to sell only electric passenger vehicles by 2035. Stellantis, formerly Fiat Chrysler, also pledged over 40% electrified vehicles by 2030.

The Trump rollback of the Obama-era standards would require a projected 29 mpg in real world stop-and-start driving by 2026. It wasn't clear what the real world mileage would be under the Biden standards. Under Obama administration rules, it would have increased to 37 mpg.

Automakers said in statements they would work toward the 40% to 50% electric vehicle sales goal.

You can count on Toyota to do our part, said Ted Ogawa, the company's North America CEO, adding that the goal is great for the environment and Toyota employees.

General Motors, Stellantis and Ford said in a joint statement that their recent electric-vehicle commitments show they want to lead the U.S. in the transition away from combustion vehicles.

But they said the change is a dramatic shift from the U.S. market today, and can only happen with a policies that include incentives for electric vehicle purchases, adequate government funding for charging stations and money to expand electric vehicle manufacturing and the parts supply chain.

The United Auto Workers union, which has voiced concerns about being too hasty with an EV transition because of the potential impact on industry jobs, did not commit to endorsing a 40 to 50% EV target. But in a statement, UAW said it stands behind the president to support his ambition not just to grow electric vehicles but also our capacity to produce them domestically with good wages and benefits."

Only 2.2% of new vehicle sales were fully electric vehicles through June, according to Edmunds.com estimates. That's up from 1.4% at the same time last year.

The Alliance for Automotive Innovation, a large industry trade group, said in a statement it will work with the administration to reach zero carbon emissions from transportation. But it said the best opportunity for environmental benefits will come after 2026 as more electric vehicles are sold.

The industry, it said, will invest more than $300 billion in electrification by 2025, producing 130 electric models by 2026. Only about 50 are available today. The regulations, it said, must strike a balance between pollution cuts and encouraging added investment in electric vehicles.

In the infrastructure bill awaiting passage in the Senate, there is $7.5 billion allocated for grants to build charging stations, about half of what Biden originally proposed. He wanted $15 billion for 500,000 stations, plus money for tax credits and rebates to entice people into buying electric vehicles.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)