The Biden administration is expected to announce this week new rules governing EV mileage ratings and vehicle CO2 emissions that boil down to wins for the Motor City Three and other legacy automakers who want to keep profitable combustion vehicle franchises going just a little bit longer, Reuters colleague David Shepardson reports.
The new rules could also give another boost to Toyota, Ford, Honda, Stellantis and other automakers that have invested in gas-electric hybrid technology. Hybrid vehicle sales have been surging in the United States.
The Biden administration will allow automakers to continue getting a regulatory bonus for selling electric vehicles through 2030. The benefit is packaged as the Energy Department’s Petroleum Equivalency Factor. The Energy Department proposed last year phasing out the EV extra credit by 2027.
Environmental groups argued this extra credit allowed automakers to sell a few EVs to cover sales of a lot of combustion trucks and SUVs. Automakers counter the extra credit gives them an incentive to sell EVs even though they lose money.
The Biden Administration’s is alsp expected to ease away from its original goal of using tailpipe CO2 standards to drive U.S. automakers to sell a 67% share of electric vehicles by 2032 has a realpolitik angle.
Biden and Republican rival Donald Trump both see winning Michigan as vital to their 2024 campaigns for the White House.
The Motor City Three automakers and the United Auto Workers union that represents their 140,000 factory workers had warned the ambitious EV mandates would cost jobs.
That matters in Michigan, where thousands of auto workers build Chevy, Ford and Ram trucks as well as Bronco SUVs, Jeep Grand Cherokees and high-performance Cadillac sedans. Those profitable petrol-fueled models fund billions in EV losses – as well as share buybacks and shareholder dividends.
EV politics are complicated. Many Republican Red states have landed new EV and battery factories. Leaders of both parties agree that the United States should strengthen defenses against a potential onslaught of cheap Chinese EVs.
Anyone hoping that this week will be the end of U.S. EV policy debates will be disappointed. Ahead lie more debates about the cost of government EV subsidies. Climate action advocates will keep demanding that automakers drive toward a zero-tailpipe CO2 future.
One more thing: Technology could change the game. What if cost-competitive EV batteries could deliver 1,000 km / 600 miles of driving range and recharge in 20 minutes? Fuel economy rules might not matter anymore.
