The Biden administration, in its latest attempt to push car manufacturers towards transitioning to electric vehicles, is proposing higher fuel economy standards for gas-powered cars.
The changes are expected to drive up car prices, but at the same time save car owners some money at the pump, the NHTSA said.
Specifically, the NHTSA said implementing the proposed standards would increase the average cost of new 2032 model-year vehicles by about $932, but the average fuel savings from the improved fuel economy would be $1,043. In other words, the federal regulator estimates new cars to cost about $111 less to buy and own toward the end of the next 10 years.
Overall, according to the NHTSA, the new fuel economy standards would save consumers more than $50 billion on fuel over vehicles’ lifetimes, make the country less dependent on oil by reducing gasoline consumption by 88 billion gallons through 2050, and avoid carbon emissions by more than 900 million tons over the same period.
The agency noted that it couldn’t consider the impact of electric or alternative-fueled vehicles when setting the standards, but car companies can use EVs to meet the requirements.
“CAFE standards have driven the auto industry to innovate in improving fuel economy in ways that benefit our nation and all Americans,” said Carlson, whose nomination to lead the agency permanently was derailed by Republican lawmakers taking issue with her previous advocacy against gas-powered cars.
Friday’s proposal comes more than a year after the Biden administration bumped up the existing CAFE standard to 49 miles per gallon by model year 2026, increasing gas mileage by 8 percent per year for model years 2024 and 2025 and 10 percent in the model year 2026.
By comparison, the fuel efficiency standards enacted under the Trump administration were just 28 miles per gallon. In 2020, the Trump administration tossed Obama-era standards that required automakers to produce fleets that average nearly 55 miles per gallon by 2025, replacing it with a more moderate goal of reaching 40 miles per gallon by 2026.
According to Ms. Carlson, the proposed CAFE standards are consistent with the rules by the Environmental Protection Agency (EPA) regarding air pollutants and greenhouse gas emissions from cars and trucks, which were released in April.
That proposal aims to cut emissions by 56 percent by 2032, with the agency projecting that two-thirds of new passenger cars and light trucks will be EVs by 2032, in addition to 50 percent of buses, 35 percent of short-haul freight tractors, and 25 percent of long-haul freight tractors going electric.
The EPA rules have drawn criticism from major multinational automakers. In comments filed, Toyota and Stellantis argued that EPA has an “overly optimistic expectation for EV market growth” while underestimating challenges like manufacturing capacity and consumer support.
According to Toyota, “hundreds of new mines” will have to be built across the world to produce enough materials vital to manufacture the EVs needed to meet EPA’s two-thirds goal.
“The sources for those minerals are almost exclusively outside the U.S., as is most of the mineral processing to turn the ore into usable battery-grade material. And the charging infrastructure (both in-home and public) needed to support that level of electrification is far from where it needs to be,” the company said.
Stellantis raised the infrastructure issue, saying that over 5.8 million public charging poles are needed to support just 40 million electric vehicles on the road by 2030. At present, there are 200,000 public chargers across the United States.
“Additionally, approved funding is only the first step to deployment of a new infrastructure—property needs to be purchased and chargers need to be installed and available to the public, which takes time,” the Dutch company said.
“These assessments represent estimates for light-duty vehicles. The charging needs for medium-duty vehicles—also required to grow dramatically by the EPA’s proposed rule—is much larger,” it added.
Meanwhile, the mismatch between EV supply and demand continues to grow, leaving unsold EVs piled up at dealerships across the country.
In the second quarter of 2023, the average inventory for electric vehicles topped more than 92,000 units on the ground at dealer lots, according to the 2023 Cox Automotive Mid-Year Review presentation. This is up 342 percent compared to the second quarter of 2022.
The new CAFE standards will undergo a 60-day public comment period as soon as they are published in the Federal Register.
