The Biden administration and the Environmental Protection Agency (EPA) are preparing to announce strict regulations on auto tailpipe emissions to ensure that up to two-thirds of all new passenger vehicle sales in the US are electric by 2032.
This is a very ambitious undertaking, as only 5.8% of vehicles sold in the US last year were all-electric, an increase from a mere 3.2% in 2021.
All of the information in the EPA’s plan has been provided by individuals who requested to be kept anonymous, as the plan has not yet been made public.
Although the proposal hasn’t been finalised or officially announced yet, reports of the potential targets are extremely consequential for the greenhouse gases emitted through the auto industry in the upcoming decade.
Boosting EV sales is a vital part of addressing climate change, especially for the US, as the American transportation sector is responsible for the biggest share of the country’s emission of greenhouse gases.
The EPA’s plan is a complete overhaul of the automaking industry, setting very aggressive targets and implementing a strict limit on each auto company’s emissions produced by their sold vehicles.
To comply with the rules but maintain sales at a profitable level, they would have to sell a much larger percentage of EVs.
Biden was very vocal about tackling climate change during his campaign. In his first year as president, he established new short-term requirements for vehicle emissions and set a target with automakers for the sale of electric vehicles, hydrogen fuel cell cars, and plug-in hybrids to make up 50% of US sales by 2030.
Recently, however, he has been angering activists by approving the Williow Project, a huge oil drilling project in Alaska, and auctioning part of the Gulf of Mexico as part of his Inflation Reduction Act (IRA).
.@SophiaKianni, @GretaThunberg, @vanessa_vash
on the #WillowProject:"As young people who will inherit a burning planet, …We have said it before and we say it again: We need system change, not climate change." #StopWillow 👏🔥https://t.co/Wwr1SKBnnW
— Greenpeace USA (@greenpeaceusa) April 7, 2023
Still, the new proposal could go beyond the initial targets he had set. The requirements would guarantee that electric vehicles will make up around 54 to 60% of all new car sales in the United States by 2030. If such targets are achieved, EVs would account for 64-67% of all cars sold in the US in 2032.
No comment has been made by EPA and White House officials on the plan, as the proposal process is not yet final.
According to anonymous officials, the EPA has been discussing various options for new rules and said they would not necessarily decide to set their most aggressive targets into the final law.
They emphasised that they have yet to collaborate and discuss the proposal with industry officials and other state regulators, a key step in finalising this proposal.
The process prior to the EPA making a final decision is still a long one. Public comment and discussions with various stakeholders, such as the auto industry, environmental groups and energy companies, still have to occur.
With the reelection year coming up in 2024, many environmentalist groups have urged the administration to accelerate the process to ensure that the rules are fully implemented and not at risk of being abandoned if Biden loses the election.
Challenges for the EPA
Although the law could be remarkable for the world’s fight against climate change, it still could entail possible limitations in the logistics of its implementation.
Firstly, the potential requirements are very stringent and may be too demanding for smaller carmakers and for those slowest to adopt EVs, according to the officials.
Although millions of dollars have already been approved to accelerate the transition towards electric vehicles in subsidies for new factories and charging stations, the money can only be accessed under a key requirement: to get material domestically and build the parts in the US and its allies.
Unfrotnueraly, the American automaking industry relies heavily on the supply chains running through China. Before the Covid-19 pandemic, the US exported $11.7 billion of China’s $34.8 billion total export volume of Chinese-made car parts.
The second largest exporter was Japan, at a mere $3.2 billion. Diverging from such a heavy reliance on China limited American automakers from accessing the full benefits of such a subsidy.
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Many of these manufacturers have encountered supply chain issues that have impeded their production. Even the ones that are optimistic about the prospects of electric cars remain uncertain about whether buyers will purchase enough of them to constitute the majority of new car sales in the next ten years.
Although demand for electric vehicles is growing, EVs still only made up 10% of the US car market in December 2022, according to the Alliance for Automotive Innovation (AAI), a long way from the share the EPA hopes to achieve.
Arguably the biggest factor threatening the growth of EV sales is the lack of public charging stations nationwide and the uncertainty surrounding the domestic access to minerals required for batteries, the AAI says.
Although progress has been made in the creation of a network of charging stations along federal highways, after $7.5 billion dollars has been dedicated to it, a recent report from S&P Global found that millions were still needed to drive demand for EVs up.
Following Europe’s Example
According to a report released in 2021 by the International Energy Agency, countries must halt the sales of new gasoline-fueled cars by 2035 to prevent the average global temperature from rising by 1.5 degrees Celsius (2.7 degrees Fahrenheit) compared to preindustrial levels.
In October 2022, the European Union agreed to ban the sale of new combustion engine vehicles by 2035 (except those running on e-fuels) to adhere to the findings of the report and accelerate the transition to EVs.
EV's only starting from 2035 in EU.
Europe is banning the sale of petrol and diesel cars starting from 2035. It might seem far future, but it's in 12 years already. https://t.co/1BvO9ZXTY5
— Dominik Sklyarov (@DominikSklyarov) February 14, 2023
Under the rule, car manufacturers must lower the emissions of new vehicles by 55% in 2030 and ultimately achieve complete elimination of emissions by 2035. In addition, the EU Parliament has earmarked funds to support small- and medium-sized businesses operating in the automotive industry.
Focusing on the automotive industry is key to reducing emissions in Europe, just like in America. EU data shows that transportation is the only sector that has experienced a rise in emissions over the past thirty years, increasing by 33.5% between 1990 and 2019. Passenger cars, in particular, are a significant contributor, accounting for 61% of total CO2 road emissions.
The American proposal doesn’t hope to ban the sale of combustion engines fully by 2035. Still, it is a “massive undertaking,” according to John Bozzella, president of the Alliance for Automotive Innovation.
As the second biggest polluter in the world behind China, America and the world would significantly benefit from an aggressive EPA proposal, and Biden could come a step closer to achieving his pledge to cut the country’s emissions in half by 2030.
The proposal could also speed up the transition to more renewable energies, thus decreasing the demand for oil domestically, such as the one drilled in Alaska, improving Biden’s image while benefiting the planet.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — In the Featured Photo: Plugged In Electric Vehicle Featured Photo Credit: Chutter Snap
