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Nervous automakers await rules pushing them toward EVs

Looming regulations from EPA and NHTSA would reshape the road

Automakers contend the Biden administration’s goal of electric vehicles comprising 67 percent of new cars sold by 2032 is not reasonable or achievable.
Automakers contend the Biden administration’s goal of electric vehicles comprising 67 percent of new cars sold by 2032 is not reasonable or achievable. (Frederic J. Brown/AFP/Getty Images)

Makers of cars and trucks sold in the United States are in a state of high anxiety, with two looming regulatory proposals aimed at forcing a rapid transition to electric vehicles.

The EPA’s strict new emission limits proposed in April have generated heavy pushback from the auto industry, as well as from congressional Republicans and even some Democrats concerned about the possible impacts on a huge sector of the economy.

At the same time, automakers are waiting for a Transportation Department agency to issue new fuel economy standards for the light-vehicle fleets they sell in model year 2027 and beyond.

The most recent regulations known as the Corporate Average Fuel Economy standards were set by the National Highway Traffic Safety Administration last year at 49.1 miles per gallon for model year 2026, up from 44.2 mpg for 2024 models, and the industry is bracing to see how much further they will need to go with the cars, SUVs and pickups they sell beginning in 2027.

Under the CAFE standards, manufacturers get credit for each EV they sell in a model year, bringing down the average fuel economy of all the vehicles sold that year. Companies whose fleets fall short of the CAFE standard could face big fines.

An NHTSA spokeswoman said via email on Friday that the agency “expects the CAFE rule to be proposed soon.” The Office of Management and Budget has been reviewing the new standards since May.

Automotive engineers familiar with the federal regulations expect NHTSA rules for average fuel economy to align fairly closely with the EPA proposal for tailpipe emission limits for cars and light trucks, but that offers little comfort to the industry.

The new EPA regulations call for light-duty vehicles, by model year 2032, to reach an industrywide target of producing no more than 82 grams of carbon dioxide for each mile traveled. The current standard is 128.1 grams for model year 2026. In 2018, the agency estimated that the average passenger vehicle emitted about 404 grams of carbon dioxide per mile.

Under the tougher standards, the agency projects that electric vehicles will account for 67 percent of new light-duty vehicles by model year 2032, as the Biden administration pushes an ambitious goal of weaning all cars and trucks sold in the U.S. off oil and gasoline — the reason the transportation sector is the nation’s largest producer of greenhouse gases.

‘Neither reasonable nor achievable’

But in comments to the EPA, the Alliance for Automotive Innovation, which represents 42 automakers producing nearly all the passenger vehicles sold in the United States, called the administration’s goal of EVs constituting 67 percent of new cars sold by 2032 to be “neither reasonable nor achievable in the time frame covered in this proposal.”

The EPA makes unreasonable assumptions about the availability of critical materials needed to make EV batteries, about the adequacy of charging infrastructure in place across the country and, most importantly, about consumer willingness to switch from vehicles powered by gasoline to EVs, the group said.

“For our part, automakers can produce electric vehicles,” the alliance said in its comments, but the EPA’s goals are only achievable if consumers can afford EVs and if they feel confident that they can charge them and that materials for batteries are available.

Congressional Republicans have been nearly unanimous in criticizing the EPA proposal, but even some Democrats are worried.

Rep. Debbie Dingell, who represents a heavily Democratic district in southeastern Michigan that is at the core of the U.S. auto industry, said in an interview this summer that the EPA proposal might be too ambitious.

“Climate change is real, but we’ve got to be realistic,” she said. “You know, there are environmental justice issues, we’ve got to build out a lot of this stuff. So I’m focused on bringing everybody together and being pragmatic and getting it done.”

Dingell also raised concerns at a June 22 hearing: “What happens if automakers can’t get there because what needs to be in place isn’t there? What happens if the charging stations aren’t there? What happens if the assumptions and forecasts the EPA relies on aren’t viable?”

That pretty much sums up the industry’s concerns.

‘Enormous amount of uncertainty’

David L. Greene, a research professor in the Department of Civil and Environmental Engineering at the University of Tennessee, who was contracted to assist NHTSA in developing the CAFE standards under OMB review, echoed those concerns.

“I think — and this is just my personal opinion — that going forward, there’s an enormous amount of uncertainty,” Greene said in a phone interview last week. “I’m not saying EPA is wrong, I’m just saying in a rule of this nature in which you are looking forward almost a decade and expecting a very large change in the power trains and energy basis for light-vehicle transportation, there’s a fair amount of uncertainty.”

Greene noted the concerns about battery costs, critical materials, consumer acceptance of EVs and possible political change in Washington that could sink the new regulations, plus fears about reliance on China, which dominates production of EV batteries today.

“The industry naturally worries about all this stuff,” Greene said. “On the one hand they really want to go to electric vehicles, but it’s normal for them to worry about exactly how fast they have to do that.”

Another expert on EPA and NHTSA regulations, Daniel Sperling, director of the Institute of Transportation Studies at the University of California, Davis, said there are two big concerns with EVs: “Are consumers going to buy them? The regulators can mandate everything they want, but are people actually going to buy them? … And the other question is, can the companies get those batteries?”

Jeff Alson, a former EPA senior engineer and policy adviser on vehicle emission regulations, said he believes NHTSA will issue fuel economy standards that are consistent with the EPA goal of encouraging more production of EVs.

“These are very important regulations,” Alson said. “And the reason EPA is doing them is because they see it as the only way to protect the planet for future generations, so future generations can grow up on a planet like the one that I grew up on.”

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