WASHINGTON — With the White House outlining a voluntary, industry-supported goal for electrifying the nation’s vehicle fleet alongside stricter federal emissions targets, it’s up to carmakers and states to work out the details.
President Joe Biden’s executive order signed last week establishes a nonbinding target for zero- emission vehicles — battery-electrics, plug-in hybrids and fuel cells — to make up half of all new passenger vehicles sold in 2030. It also directs the EPA and NHTSA to work on longer-term fuel economy and emissions standards for vehicles produced after the 2026 model year.
The ZEV goal props up the president’s climate and energy ambitions. It also puts the onus back on states to set their own rules on ZEV sales and on automakers to carve out sales and manufacturing strategies so they can meet the more stringent auto pollution standards proposed last week by the EPA and NHTSA.
The EPA’s proposed emissions standards build on the agreement among California and five automakers — Ford, Honda, Volkswagen, BMW and Volvo — but include a one-time 10 percent increase in stringency for the 2023 model year. The targets would increase by about 5 percent each year after that through the 2026 model year, the EPA said. The rules would mandate an industrywide target of 171 grams of carbon dioxide per mile, or 52 mpg equivalent, by the 2026 model year.
NHTSA said its fuel economy standards would increase fuel efficiency 8 percent annually for the 2024-26 model years and increase estimated fleetwide average by 12 mpg by the 2026 model year.
“It’s great to see national leadership return, but we can’t mistake an aspirational goal for public policy,” said Nick Nigro, founder of EV research group Atlas Public Policy.
The agencies’ standards are a “promising space” for the federal government to carve out its role at the national level, he told Automotive News, but “states are going to have to come up with their own ways of achieving their goals.”
The Republican leader of the House Energy and Commerce Committee, Cathy McMorris Rodgers of Washington, opposes the plan, tweeting: “These restrictions will force people to either pay more for a car or keep their older cars on the road, making our roads less safe.” West Virginia Rep. David McKinley, the GOP’s leader on the Energy and Commerce Subcommittee on Environment and Climate Change, called the timeline “arbitrary” and said it will make the U.S. “more dependent on China for production of parts and batteries for EVs.”
In April, a bipartisan group of governors from states including California urged the president to set standards ensuring that all new passenger vehicles are zero emission by 2035. The Biden administration, thus far, has resisted mandating an end to sales of new gasoline-powered vehicles.
California Gov. Gavin Newsom — who issued an order last year calling for 100 percent of in-state sales of new passenger cars and trucks to be zero emission by 2035 — applauded the administration’s proposed standards and ZEV target.
“The climate emergency demands no less,” he said in a statement last week.
Combined, the administration’s ambitious ZEV target and more stringent greenhouse gas and fuel economy standards could spur activity in states where, in some cases, electric vehicle activity has been dormant.
“We’re going to see a lot more activity,” Nigro said, “not just in the states that signed on to 100 percent ZEV sales, but also states that have been kind of slow to act.”
Byron Brown, a senior counsel at Crowell & Moring’s Washington, D.C., office, cautioned that plenty of policy obstacles remain.
“States and local governments and communities need to be on board with an increase in renewable energy and transmission being built,” said Byron, who previously was deputy chief of staff for policy at the EPA. “There may be certain states that hold out, or certain jurisdictions that hold out, and don’t want to make this the same priority that the administration wants to make.”
Major automakers including the Detroit 3, Toyota Motor North America and Volkswagen Group of America last week announced their support of Biden’s goal of reaching a 50 percent ZEV sales share in 2030, with executives from Ford Motor Co., General Motors, Stellantis and the UAW joining the president as he signed the executive order outside the White House.
“The biggest thing that’s happening here is there’s a realization, on the part of both labor and business now, that this is the future. We can’t sit by,” Biden said.
The industry’s commitment, however, hinges on efforts from the administration and policymakers to put forth measures that foster greater consumer adoption EVs, including purchase incentives, charging infrastructure, R&D investments and incentives to boost domestic EV manufacturing and supply chains.
“With the right complementary policies in place, the auto industry is poised to accept the challenge of driving EV purchases to between 40 and 50 percent of new-vehicle sales by the end of the decade,” John Bozzella, CEO of the Alliance for Automotive Innovation, said in a statement. “The auto industry has stepped up. … But all levels of government will need to do their part for this challenge to succeed.”
Seth Goldstein, a senior equity analyst for Morningstar, said Biden’s voluntary target — instead of a firm regulation — “does reduce the pressure for an automaker.”
“That said, in the second half of the decade — once EVs are cheaper and reach functional parity — I think consumer demand will push automakers to produce and sell more EVs by 2030 regardless of regulations,” Goldstein said.
The president’s directive aligns with what automakers are facing globally. “European and Chinese regulations essentially force automakers to electrify their fleets over the next decade,” he said. “This just brings greater focus to the U.S. part of auto production.”
The U.S. is approaching 2 million sales of passenger EVs, according to Atlas Public Policy’s Nigro, and the U.S. Energy Information Administration is projecting 15 million passenger vehicle sales in 2030.
“If we’re going to hit 7.5 million of those being electric in 2030, we’re going to have to see a marked scale-up in sales, deployment of infrastructure and other policies in place to make it possible for consumers to buy that many EVs,” Nigro said. “It’s a huge growth.”
EVs made up 3.3 percent of new passenger vehicle sales in the U.S. through May this year, according to Atlas Public Policy data, compared with 1.7 percent through May 2020 and 1.9 percent for that period of 2019.
“This action is definitely a step in the right direction,” Nigro said. “But we’re going to need Washington to continue to deliver with really new and bold climate policy and investments in the deployment of this technology.”