The Biden administration is proposing new limits on vehicle tailpipe emissions in order to encourage automakers in the United States to generate two-thirds of their sales through electric vehicles within a decade.
The new light-duty vehicle standards announced by the Environmental Protection Agency on Wednesday will apply to model years 2027 to 2032. They would be the nation’s strictest car pollution restrictions in history, as well as one of President Biden’s most aggressive climate-change initiatives to date.
The proposal goes beyond Mr. Biden’s ambitious goal of having half of all new vehicle sales be electric by 2030. According to the EPA, EVs could account for 67% of new-vehicle sales by the 2032 model year.
A separate proposal, aimed at medium-duty vehicles like box trucks and school buses, is expected to electrify nearly half of those vehicles by the 2032 model year.
Officials with the Biden administration stated that the proposal for light-duty vehicles, which includes passenger cars, sport utility vehicles, and pickup trucks, is intended to allow automakers to meet performance-based standards and comply through a variety of emission-control technologies. Most are expected to achieve their objectives through electrification. The proposal is scheduled to be completed in the spring of 2024.
The White House’s national climate adviser, Ali Zaidi, cited the rapid adoption of electric vehicles, stating that during Mr. Biden’s presidency, the number of available electric-vehicle models has doubled, as has the number of charging stations.
“We have re-established the United States as a leader in the future of clean transportation,” said Mr. Zaidi. “Here, technologies that were pioneered are once again being manufactured on factory floors.”
Many Republicans have previously questioned similar proposals, citing sticker shock and higher costs faced by consumers at dealer lots.
“The Biden administration has made it clear that it wants to decide what kinds of cars and trucks Americans can buy, lease, and drive,” said Sen. Shelley Moore Capito. (R., W. Va.). She claimed that the “misguided emissions standards” were set without taking into account supply-chain challenges, a lack of electric-vehicle charging infrastructure, and the difficulty in obtaining permits to mine the minerals required for EVs.
Others claimed that the measures were insufficient to address climate change.
“The draft rule fails to require any improvement in the tens of millions of new gas guzzlers,” said Dan Becker of the nonprofit Center for Biological Diversity, adding that the plan falls short of the “pollution cut required to protect our planet.”
Executives in the auto industry have warned that the transition to electrification will be hampered by a lack of public and private EV charging stations, as well as access to raw materials used to manufacture batteries.
The EPA estimated that the proposal’s benefits would outweigh the costs by at least $1 trillion. According to EPA Administrator Michael Regan, the proposal is expected to save 7.3 billion tons of carbon dioxide emissions by 2055. According to the agency, this is the equivalent of four years’ worth of transportation spending in the United States.
Encouraged by Tesla Inc.’s success and tougher tailpipe-emissions standards around the world, major automakers have been shifting their vehicle lineups to include more battery-powered cars.
Automakers have already committed to goals similar to those advocated by the White House. In 2021, General Motors Co., Ford Motor Co., and Stellantis NV, which manufactures Jeep models, voluntarily agreed to a target of 40% to 50% electric vehicle sales in the United States by 2030, in line with the administration’s goal at the time.
The revamped emissions standards were set in motion by Mr. Biden’s executive order in 2021, which set a target of 50% of U.S. sales for electric vehicles, hydrogen-fuel cell vehicles, and plug-in hybrid vehicles by 2030. In addition, the executive order directed the National Highway Traffic Safety Administration to complete new corporate average fuel-economy targets for the 2027 model year and beyond by July 2024.
According to an NHTSA spokesperson, the agency expects to propose its CAFE rule soon.
In the years since Mr. Biden signed the order, Congress has passed legislation aimed at hastening the adoption of electric vehicles, including the climate, health, and tax law known as the Inflation Reduction Act and the roughly $1 trillion bipartisan infrastructure bill. Both proposed funding to subsidize the purchase of battery-powered vehicles for consumers as well as to support the development of fast-charging public infrastructure, which is currently patchy and unreliable.
The Alliance for Automotive Innovation, a lobbying group representing GM, Ford, Toyota Motor Corp., and other major automakers, told White House officials in February that EV adoption is dependent on factors beyond automakers’ control, such as the development of robust charging infrastructure and the availability of necessary minerals to make batteries.
According to meeting minutes, the group sought a shorter period of model years that the upcoming rules cover in order to reduce risk and uncertainty.
“Even with positive EV sales momentum and product excitement, the electrification transition will face challenges,” the alliance said in a recent statement.
Another challenge could be maintaining continuity in the White House as Mr. Biden prepares for his expected re-election campaign in 2024. President Barack Obama set tailpipe emissions standards just before leaving office in 2017, only to have President Donald Trump’s administration reverse those rules.
According to Lawrence Burns, former corporate vice president of research and development and planning at GM, this type of back-and-forth makes planning difficult for the auto industry, which has long lead times and requires significant amounts of capital before companies sell their products to customers.
“I don’t see how anyone wins if the requirements keep bouncing around,” Mr. Burns said.
The EPA’s proposal comes on the heels of even more aggressive moves by California regulators, who banned new gasoline-powered car sales by 2035 last year, and Japan, which has said it plans to phase out such vehicles by the middle of the next decade. Around that time, the European Union is debating legislation effectively prohibiting the sale of vehicles with internal combustion engines.
Meanwhile, the auto industry in the United States is dealing with a change in leadership at the United Auto Workers, a union that represents over 400,000 workers in the automotive and other industries. Shawn Fain, the organization’s new leader, has pledged to prioritize EV manufacturing in contract negotiations with GM, Ford, and Stellantis, which begin later this year.
Former EPA officials and analysts said the new emissions targets should be easier for the industry to meet due to increased government spending supported by the Inflation Reduction Act and infrastructure legislation.
“Both of these massive investment laws are in place, and they should be expediting the ability of car and truck manufacturers to meet more-ambitious standards than what the president expected in 2021,” Margo Oge, former head of the EPA’s Office of Transportation and Air Quality, said on a conference call with reporters Tuesday.
According to analysts, automakers are already planning to build more EVs and risk losing market share if they do not keep up with consumer demand. According to J.D. Power, an industry research firm, EVs accounted for 8.5% of total auto-industry sales in the first quarter of this year.
According to Thomas Boylan, regulatory director of the Zero Emission Transportation Association, a trade group that supports EV adoption, the new EPA regulations will provide more certainty for companies on how to spend their resources in the coming years.
“It all sort of ensures that everyone is rowing in the same direction and gives them the cover to deploy the capital,” Mr. Boylan, who previously worked for the EPA’s Office of Transportation and Air Quality, explained.