Biden Unveils Strictest-Ever Emissions Standards in Bid to Remake Auto Industry

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The Biden administration unveiled the most stringent vehicle emissions standards ever considered on Wednesday as part of its push to strong-arm carmakers and consumers into transitioning to electric vehicles.

The White House announced that the EPA is considering two new emissions rules as part of a plan to ensure that electric vehicles make up 50 percent of new auto sales by 2032.

“EPA estimates that by 2032, if finalized, the proposed rules could result in electrification of 67% of new sedans, crossovers, SUVs, and light trucks; 50% of new vocational vehicles (such as buses and garbage trucks); 35% of new short-haul freight tractors; and 25% of new long-haul freight tractors,” read a White House statement.

“Cars and truck manufacturers have made clear that the future of transportation is electric,” the statement continued. “The market is moving.”

The first EPA rule would target emissions of greenhouse gases and pollutants from passenger cars, vans, and light trucks. The second rule would update vehicle emissions standards for greenhouse gas emissions from buses, freight trucks, and other heavy-duty vehicles. The most aggressive proposal would have the auto industry cut emissions in passenger cars and pickups by half from 2026 to 2032.

Gas-powered vehicles make up one of the largest sources of greenhouse gas emissions and the Biden administration has consequently zeroed in on the auto industry in its attempt to comply with the Paris Agreement, in which it pledged to cut emissions by 50 percent below 2005 levels by 2030.

The aggressive plans raise a number of concerns for automakers and consumers. Gas-powered vehicles still make up over 90 percent of the market share of new vehicles, reflecting the fact that electric vehicles are more expensive.

While automakers are selling more electric vehicles, the plans would accelerate the process drastically. The underlying infrastructure is not there to support such a shift. The cost of rare minerals needed for electric vehicle batteries remains high and there are also concerns surrounding the availability of charging station and affordable electric vehicles, the Washington Post reported.

Analysts and lobbyists say this level of government intervention from Washington may backfire, complicating government-industry cooperation.

“I don’t think we’re ready for it. I think we need one more learning cycle, with the consumer, with the infrastructure, with the technology and the supply base. Maybe we need to go a little slower now, to go faster later with better technology,” ex-GM executive Larry Burns told the Post.

The new rules represent an escalation from earlier moves. Biden used his first year in office to propose ratcheting up new near-term standards for cars, SUVs and pickup trucks through model year 2026. The administration also encouraged Congress to use its climate and infrastructure spending bills of the past two years to boost electric vehicles.

Pushed by investors to embrace new technology, automakers have so far complied with the EV push, but the administration’s switch from carrot to stick could have repercussions. Analysts told the Post that such aggressive mandates could force automakers to make bigger bets on a narrower set of options in order to comply, which might limit innovation because the technology is changing so rapidly.

Last year’s Inflation Reduction Act (IRA) also included tax credits for EV consumers in a push to decrease foreign reliance on countries like China. Given the climate provisions in the law, the rules that require automakers to show that their batteries contain certain levels of materials originating in North America or in countries with which the United States has a free trade agreement were crucial to securing the support of Senator Joe Manchin (D., Wv.), chairman of the Senate Energy Committee. But Manchin is now involved in a dispute with the Treasury Department about whether the IRA’s intent is being respected by the administration, taking issue with the scope afforded to Treasury to determine which countries America has a free trade agreement with.

However, the rules intended to decrease foreign reliance have only served to further restrict automakers. A shorter list of electric vehicles will qualify for consumer tax credits of up to $7,500. Automakers, who face an already difficult task of getting consumers to adopt electric vehicles, have been irritated by this.

Experts argue that the administration can institute as many mandates as it likes, but consumer willingness to buy electric vehicles is still controlling. If electric vehicles remain costly and unaccessible, they will be a tough sell.

O.H. Skinner, executive director of Alliance for Consumers, criticized Biden’s move in a statement to National Review, saying the administration is politicizing auto manufacturing and harming consumers.

“With this new set of proposals, the Biden Administration is setting out to use the power of government as a weapon to remove from the market the gas-powered trucks and cars that everyday consumers rely on, in favor of the kinds of cars that are most popular in liberal bastions. Everyday consumers deserve better,” Skinner said.

“The federal government shouldn’t be forcing progressive lifestyle choices on consumers. Biden and his activist allies think that they have found a way to force companies and consumers to comply with a progressive worldview without consequence or public scrutiny, and we are saying: enough is enough,” Skinner added.

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