President Joe Biden and his administration have not wasted any time drafting legislation that will impact the automotive industry. Early on the President made it known that he’d like to see the federal fleet switch over to electric vehicles, and he’s even tasked the feds with investigating the supply chain for necessary EV materials and components. At the beginning of this month, President Joe Biden also set aside some $174 billion to help aid the speed of electric vehicle adoption in the United States, as part of the broader $2 trillion American Jobs Plan. Now though, EPA Administrator Michael Regan has made an announcement related to the question of emissions regulations and fuel economy standards here in the States. According to a report from Bloomberg, we can expect tougher regulations to start taking effect in July. Here’s what you need to know.
As you might already know, the Trump Administration made a concerted effort to roll back Obama era fuel economy standards. The former President not only achieved this, but he also went to battle with California over that states’ right to determine their own CAFE standards. Obama’s initial plans would have seen automakers required to meet a fleet-wide average of 54 mpg by 2026, whereas Trump dropped that figure down to a rating of just 40.4 mpg. And while you might expect that this made automakers quite pleased, that wasn’t unilaterally the case. In fact, a number of automakers, including Ford, VW, and Honda, teamed up with California regulators to create a stricter set of standards to follow. They settled on increasing fuel economy ratings by 3.7 percent per year, compared to the current federal standard of just 1.5 percent. The Biden Administration will likely follow California’s lead.
Of course not every automaker wanted in on the California agreement. Both General Motors and Stellantis are actively lobbying the Biden Administration to find a compromise between the California regulations and those set by President Trump. They also would like to see the return of the multiplier for compliance credits received for building electric vehicles, which was part of the Obama era plan. Automakers will likely get their wish when it comes to these credits, though it isn’t expected that the EPA will set standards below those from the Golden State.
“We’re taking a strong look at what the science is urging us to do.” EPA Administrator Michael Regan told Bloomberg. “We’re looking at where technologies are. We’re marrying our regulatory policy and what we have the statutory authority to do with where the science directs us and where the markets and technology are.”
As we head into the summer months, expect these new emissions regulations from President Joe Biden and the EPA to make waves in the industry. While automakers are genuinely embracing electrification across the globe, that doesn’t necessarily mean they will be thrilled about these tougher rules. GM is a perfect example of this, saying one thing publicly while actively trying to encourage something else within the government. That said, we’re sure the Biden Administration is speaking with automakers as they develop these new fuel economy standards.