Biden Administration Tightens Mileage Rules to Buoy Electric Vehicles

The new vehicle fuel mileage standards announced by the Biden administration are part of a broader strategy to transform the American auto market into one that is dominated by electric vehicles (EVs). These standards aim to reduce pollution and promote the adoption of EVs, which are crucial in the fight against climate change.

In addition to the new mileage standards, the administration is using other regulations to encourage carmakers to produce more electric vehicles. The Environmental Protection Agency (EPA) has issued strict new limits on tailpipe pollution designed to ensure that a significant portion of new passenger cars and light trucks sold in the U.S. are all-electric or hybrids by 2032.

Furthermore, the 2022 Inflation Reduction Act provides tax credits for buyers of new and used electric vehicles, incentives for charging stations, and grants and loans for manufacturers. This multi-faceted approach is intended to accelerate the transition to electric vehicles, reduce greenhouse gas emissions, and make the U.S. auto industry more competitive in the global market.

The EPA's new tailpipe pollution limits aim to significantly alter the composition of new passenger cars and light trucks by 2032, with the goal of ensuring that the majority of these vehicles sold in the United States are all-electric or hybrids1. This is part of the Biden administration's broader strategy to reduce greenhouse gas emissions, combat climate change, and promote the adoption of electric vehicles (EVs).

To achieve this goal, the EPA has set strict new limits on tailpipe pollution, which will apply to model years 2027 through 2032. These regulations are designed to push automakers to accelerate their transition to electric vehicles and hybrids. The EPA expects that under these new rules, EVs could account for up to 56% of new passenger vehicles sold for model years 2030 through 2032, meeting a goal that President Biden set in 2021.

The new rules require auto manufacturers to slash emissions of greenhouse gases, such as carbon dioxide, that contribute to global warming, as well as air pollutants that contribute to soot and smog. By setting these ambitious targets, the EPA aims to drive a significant shift in the automotive industry, encouraging manufacturers to invest in cleaner technologies and phase out vehicles with high emissions.

It is important to note that the EPA rules are not written as an EV mandate or a ban on the sale of gas cars, like some states and other countries have adopted. Instead, the EPA sets standards that apply across an entire fleet. This means an automaker can still make vehicles with higher emissions, as long as they also make enough very low or zero-emission vehicles that it averages out.

Over the next decade, automakers can continue to offer a range of vehicle types, but the "menu" that's available to consumers will shift to be cleaner overall. The rules will likely drive a shift not just among automakers, but also among their suppliers and in infrastructure, as the demand for cleaner vehicles increases.

In summary, the EPA's new tailpipe pollution limits aim to change the composition of new passenger cars and light trucks by 2032 by setting ambitious emissions targets, pushing automakers to invest in cleaner technologies, and encouraging the adoption of electric vehicles and hybrids.