EPA issues landmark rules to curb auto emissions, bolster EVs

Driving the news: The new rules follow a proposal issued in April, and come as challenges to Biden administration auto standards are already underway. They set emissions rules for light-duty vehicles including cars, SUVs and light trucks for model years 2027-2032

• In some ways, it is less stringent than the initial plan.
• Biden administration officials told reporters the final rules provide more flexibility, including a slower ratcheting up of emissions limits, but gets to the same end goal as the proposal after feedback the EPA received to the proposed rules.

Between the lines: The rules do not mandate that automakers transition their fleets over to sell more EVs by a certain date. But with tighter emissions curbs, manufacturers are likely to favor more EVs to comply with the rules.

• The new rule allows manufacturers to include hybrid EVs and plug-in hybrids for meeting the requirements, in addition to battery-powered EVs.
• A fact sheet given to reporters shows that during 2030-2032 manufacturing years, carmakers may choose to produce 30% to 56% of new light duty vehicle sales as battery electric vehicles, with the rest consisting of a mix of other clean vehicle technologies.
• The rule would still allow for the production and sale of gasoline-powered vehicles.

By the numbers: The original proposal did not include plug-in hybrids, and would have allowed carmakers to produce up to 67% of the light and medium-duty vehicle fleets during the 2030-2032 period as battery electric cars.

• In finalizing the rule, EPA and the White House are touting the health and climate benefits.
• The agency calculates that over its lifetime, the regulations would cut 7 billion tons of U.S. carbon emissions, equivalent to a year's worth, from all sources.
• It would also provide $100 billion of annual net benefits to society, including $13 billion in annual health benefits, EPA determined.
• Estimates show that consumers would save money by buying a new vehicle based on lower maintenance costs and avoided gas purchases.

Yes, but: The rule comes as EV sales growth appears to have slowed, with consumers opting for cheaper hybrids and plug-in models.

Zoom out: It also lands in the midst of a presidential campaign in which EVs have become a contested issue, with former President Donald Trump's campaign criticizing a Biden EV "mandate."

• In general, opponents of the rule portray it as restricting consumer choice to vehicles the public does not want to buy.

• The rule, a centerpiece of the Biden administration's climate goals, is likely to be immediately challenged in Congress, and end up in litigation.

What they're saying: "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," said John Bozzella, President and CEO, Alliance for Automotive Innovation, in a statement.

• "These adjusted EV targets – still a stretch goal – should give the market and supply chains a chance to catch up," he said.
• "It buys some time for more public charging to come online, and the industrial incentives and policies of the Inflation Reduction Act to do their thing."
• National climate advisor Ali Zaidi touted increasing customer choices when it comes to lower emissions vehicles. "From plug-in hybrids to fuel cells to fully electric, drivers have more choices today," he said in a statement.  
• "Since 2021, sales of these vehicles have quadrupled and prices continue to come down. This growth means jobs, and it means we are moving faster and faster to take on the climate crisis."

What's next: In the next few weeks, the Department of Transportation is expected to finalize new emissions standards for heavy-duty vehicles such as buses and freight-carrying trucks.