TrendPulse|Biden Tightens Auto Emissions Standards, Reversing Trump, and Aims for a Quantum Leap on Electric Vehicles by 2030

In a car-obsessed country,TrendPulse cutting emissions from transportation is going to be a special challenge, requiring buy-in from industry giants and some faith that consumers will come along.

President Joe Biden has now revealed a big part of how he intends to get there, announcing on Thursday a revision of the Trump administration’s rollback of fuel economy standards that would take effect with the 2023 model year. The proposed revision would make the rules more stringent than they were before Trump loosened them, requiring average fuel economy of 52 miles per gallon by 2026, compared to the Obama administration’s standards, which would have brought the average to 50.1 mpg by 2025. 

But because of the years of lost progress, the greenhouse gas savings will be less: some 2 billion metric tons of carbon pollution through 2026, compared to the Obama plan, which was designed to cut 6 billion metric tons through 2025.

Still, the Environmental Protection Agency said the new standards would “drive 10 percent greater emissions improvement” over the Trump administration’s rules in 2023, and five percent improvement for each year after that.

In a statement, the White House also said it was developing fuel efficiency and multi-pollutant emissions standards for the 2027 model year and continuing to develop standards through “at least” the 2030 model year.

Biden announced the new rule at a press conference outside the White House, where he also signed an executive order setting a goal for zero-emissions vehicles to make up 50 percent of new-car sales by 2030, up from 2 percent in 2020. 

He framed the goal and the emissions standards in terms of international competition, saying that the future of the automobile industry was electric, “and there’s no turning back. The question is whether we’ll lead or fall behind in the race for the future.”

Biden will need to get automakers on board, and it looks like he has them. He was joined at the press conference by executives from each of the legacy auto manufacturers that were started in the United States—Ford, General Motors and Stellantis, the partnership that includes Chrysler—as well as by union officials. All three companies released their own joint target, timed to coincide with Biden’s announcement, aiming for an EV market share of 40 percent to 50 percent by 2030. The automakers’ statement made clear the goal was contingent on action by Congress “to enact policies that will enable these ambitious objectives.”

“I’m ecstatic,” said Jeff Alson, who as an engineer at the U.S. Environmental Protection Agency helped to write the Obama-era rules, and then retired in 2018 and became an outspoken critic of the Trump administration’s approach. “It was painful then and I’m ecstatic now. We have a chance.”

He was referring to the chance of substantially cutting emissions from transportation, which, at 29 percent, is the nation’s largest source of greenhouse gas emissions, surpassing power plants in the most recent EPA figures.

Taken together, the moves by the administration and carmakers show a ramping up of carbon-cutting ambitions at a time when the European Union and China are already a few steps ahead in setting targets and helping their companies become the leaders in an electrified auto industry. But environmental advocates point to the long and sometimes dubious environmental records of U.S. automakers, and say that the new goal for market share is going to need a strong enforcement mechanism or else it’s little more than words.

“This is an industry that when left to their own devices does not protect the environment, they do not protect safety, and they never have,” said Dan Becker, director of the Safe Climate Transport Campaign of the Center for Biological Diversity. “The only thing that makes them act in the public interest is strong rules that require them to do so.”

He said his first impression of Biden’s latest actions is that they do not go far enough to make the kinds of emissions cuts needed to address climate change.

Aspirations, Perhaps to Become Commitments

The new fuel economy standards are the latest in a series of gyrations in federal transportation and environmental policy. The EPA is revising the Trump administration’s fuel economy standards, which were a revision of what the Obama administration had implemented.

The Biden administration said the new standards build on an agreement that California’s state government signed with five automakers: Ford, Honda, Volkswagen Group, BMW and Volvo.

The Obama administration had set rules requiring 5 percent annual increases in fuel economy, which the Trump administration changed to 1.5 percent annual increases, arguing that the weakening of the rules would help automakers by reducing compliance costs, which would help to slow the increase in vehicle prices. The Biden proposal, on which the administration will now hear public comments through Sept. 27, seeks a fleet-wide improvement in passenger vehicle fuel economy averaging 6.1 percent annually from 2023 through 2026.

While Biden can revise some of the rules issued under the Trump administration, it’s too late to do anything about the 2021 and 2022 model years.

“We lost those two years,” said Alson, the former EPA official.

He is watching for indications of what the administration intends to do with fuel economy rules for 2027 and after, which will play an important part in determining whether the country can meet its goals for cutting emissions.

A key to the success of Biden’s clean car plan will be action over the coming weeks in Congress on an infrastructure package and a separate budget bill. The Senate this week is considering a bipartisan infrastructure bill that contains $7.5 billion for EV charging, a fraction of the $174 billion Biden has proposed to build a network of 500,000 charging stations. At least some of that spending likely will end up in the budget bill, where it has a chance to pass the Senate with only Democratic votes. And even more investment may be needed: The International Council on Clean Transportation said in a report last month that 2.4 million charging stations would be needed by 2030 to accommodate growth in the EV market.  

“Bold action from our partners in the federal government is crucial to build consumer demand for electric vehicles and put us on track to achieve the global commitments of the Paris Climate Agreement,” said BMW, Ford, Honda, Volkswagen and Volvo in a joint statement.

To meet the heightened fuel efficiency standards while still selling gasoline-powered vehicles, automakers will need to substantially increase their sales of zero-emissions vehicles, a requirement that will push the companies toward the nonbinding goals they have now announced.

Reducing tailpipe emissions will have broad benefits for the climate and for human health, said Paul Billings, senior vice president for public policy for the American Lung Association.

“Millions and millions of people across the country are breathing unhealthy air, and we also know that people of color and low incomes are more likely to be breathing dirty air,” he said. “Carbon pollution, which is driving climate change, is creating a health emergency.”

He noted that Ford, GM and Stellantis described their EV goal as an “aspiration,” which is short of a firm commitment.

“I’m hopeful that the aspirations that are being announced today (by automakers) will translate into commitments and will be reinforced by regulations,” he said. “What we learned in the previous administration is how fragile those commitments are.”

A Heavy Lift

To reach the goal for zero-emissions vehicles, automakers will need to produce EVs that customers want to buy, and the country will need to have the charging infrastructure to meet a surge in demand. The electricity grid also will need to be able to provide enough power to keep the lights on and keep cars running.

“To get to that 50 percent target is going to be a heavy lift,” said Corey Cantor, a transport analyst for BloombergNEF. “I don’t think it’s pie in the sky. It’s just going to be a challenge.”

One reason for optimism about reaching the goal is that automakers are investing in electric vehicles on a much larger scale than before. This year, Ford has said it plans to spend more than $30 billion on electrification by 2030, and General Motors has said that it is increasing its spending on electric vehicles and autonomous vehicles by $35 billion by 2025.

The companies need to be able to compete on EVs to be players in the European Union and China, and to keep up with rivals like Volkswagen, Tesla and others.

But it is not clear that U.S. consumers will buy EVs in large numbers.

An encouraging sign for the electric vehicle market is public opinion research showing that a large share of consumers are open to buying an EV. For example, Consumer Reports published survey results in December showing that 71 percent of respondents would consider buying an EV.

More important for automakers is addressing the reasons that people might be reluctant to consider an EV. The top reasons in the Consumer Reports survey were concerns about vehicle range and availability of charging stations, followed by concerns that the vehicles are too expensive.

As automakers expand production of EVs, the costs are coming down and ranges are increasing.

While many environmental advocates were celebrating Biden’s actions on Thursday, some fear that any progress may only last as long as his presidency, if the next president tries to reverse course and the automakers waver in their support.

Cantor of BloombergNEF said these concerns come down to a basic question: “Are things going to be different this time?”

He thinks the answer is “yes,” largely because the automakers have little choice but to embrace EVs or risk being left behind by global markets.

Even if he’s right, going from 2 percent to 50 percent of the U.S. market by 2030 is going to be an immense challenge.