Tailpipe Emission Rules Give Automakers More Time to Ramp Up EVs
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The Environmental Protection Agency (EPA) on Wednesday announced its final regulations to limit emissions from automobiles, as part of the Biden administration’s efforts to combat climate change.
The administration’s new, stricter standards on tailpipe emissions are expected to have ripple effects on electric vehicle production. But it also gives automakers more time to comply with the new rules. When the rules were originally proposed last year, the initial emissions limits had a shorter time frame for adoption.
The announcement comes as electronic vehicle demand has begun slowing down in recent months, despite a record 1.2 million in U.S. EV sales in 2023, according to Kelley Blue Book.
What you need to know
The new tighter rules for vehicle emissions are expected to roll out more slowly than initially proposed last April. But eventually, the emissions limits will align with the EPA’s target.
The new standards apply to passenger cars, light-duty trucks and medium-duty vehicles for all model years 2027 through 2032.
The new rule doesn’t require automakers to produce a certain number of EVs, and gas-powered vehicles will still be produced.
To comply with the stricter standards, automakers will likely accelerate the production of full-battery EVs, along with hybrids and plug-in hybrid EVs.
The emissions goals are expected to be reached by 2032 if more than half (56%) of all new vehicle sales are electric and 13% are hybrids, according to the EPA.
Why this matters
Emissions from cars and trucks are the largest contributor to atmosphere-warming greenhouse gasses in the U.S., accounting for roughly one-third of all greenhouse gas emissions, according to the EPA.
The new rules are expected to eliminate 7.2 billion tons of carbon emissions in the U.S. by 2055, according to the EPA.
For drivers, the new rules are also expected to result in $62 billion in reduced annual costs for fuel, maintenance and repairs, according to the EPA.
Auto manufacturing employment is also expected to get a boost from the new regulations as the industry increases EV production.
There are, unsurprisingly, health benefits to cleaner air: the EPA says the new regulations “provide $100 billion of annual net benefits to society, including $13 billion in annual health benefits.”
Consider this
EV adoption hasn’t been easy for consumers largely due to a lack of charging infrastructure for drivers to power up.
A 2023 analysis of federal data by Coast, a fuel card company, found there are an average of 22 EV charging ports per 1,000 road miles compared to an average of 104 gas pumps.
The sticker price for EVs is higher than the equivalent non-luxury gas-powered car, according to a study released in July 2023 by Kelley Blue Book. But EVs are more affordable than they once were — prices dropped 20% year-over-year.
What this means for you
The new time frame for meeting emissions standards means automakers don’t have to rev up EV production right now, but in the coming years, consumers can expect more affordable EV options.
Consumers are likely to save money with EVs once manufacturers beef up the inventory of less expensive EVs. Once the new standards are fully implemented, the EPA estimates the average U.S. driver will save $6,000 in fuel and maintenance costs.
There are also other benefits: EV buyers are also entitled to a tax credit. For 2024, that’s up to $7,500 for new EVs and up to $4,000 for used EVs.
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