US to soften tailpipe rules, slow EV transition through 2030

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© Reuters. FILE PHOTO: The exhaust of a car is pictured in New York, U.S., August 2, 2018. REUTERS/Lucas Jackson/FILE PHOTO
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WASHINGTON (Reuters) -U.S. President Joe Biden’s administration intends to relax limits on tailpipe emissions that are designed to get Americans to move from gas-powered cars to electric vehicles, the New York Times reported, citing people familiar with the plan.

The administration would give car manufacturers more time instead of requiring them to rapidly ramp up sales of electric vehicles over the next few years, the report said, adding that the new rule could be published by early spring.

The shift would mean that EV sales would not need to rise sharply until after 2030.

A U.S. Environmental Protection Agency spokesperson said on Sunday that the draft final rule – titled “The Multi Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles” – is in the interagency review process.

The spokesperson added that the agency is committed to finalizing a technology standard that is “readily achievable, secures reductions in dangerous air and climate pollution and ensures economic benefits for families.”

John Bozzella, president and CEO of auto industry trade group the Alliance for Automotive Innovation (AAI), said on Sunday that the next three or four years are critical for the development of the EV market.

“Give the market and supply chains a chance to catch up, maintain a customer’s ability to choose, let more public charging come online, let the industrial credits and Inflation Reduction Act do their thing and impact the industrial shift,” Bozzella said.

Reuters previously reported that the White House could enact proposed Environmental Protection Agency regulations as soon as March that would mandate dramatic reductions in tailpipe emissions. The administration proposal would require boosting U.S. EV market share to 67% by 2032 from less than 8% in 2023.

General Motors (NYSE:GM), Ford (NYSE:F), and Stellantis (NYSE:STLA) – the European parent of U.S.-based Ram and Jeep – have warned they cannot profitably transition their truck-heavy U.S. fleets that quickly, according to a Reuters analysis of automakers’ sales data and a review of comments to regulators.

Automakers and the AAI have urged the Biden administration to slow the proposed ramp-up in EV sales. They have said EV technology is still too costly for many mainstream U.S. consumers, and more time is needed to develop the charging infrastructure.