Planned EPA Rules Could Make 67% Of New U.S. Cars Electric By 2032

Topline

The Environmental Protection Agency announced two proposed rules Wednesday designed to ensure that 67% of new passenger cars and 25% of heavy trucks sold in the U.S. are all-electric by 2032, in the latest push from the Biden Administration to reduce planet-warming emissions by pivoting to electric vehicles.

In an aerial view, Tesla cars recharge at a Tesla charger station on February 15, 2023 in Corte … [+] Madera, California.

Justin Sullivan/Getty

Key Facts

The agency is not mandating a certain number of electric cars be sold, but is setting tighter pollution standards for new cars and trucks with model years between 2027 and 2032, in essence pushing carmakers to sell a lot more electric vehicles in order to meet the new emissions standards.

The standards for emissions are based on the size and type of vehicle being built, and the EPA says most companies will have to produce 67% all-electric cars to follow the new rules, but the standards also allow automakers to find other ways to meet the emissions rules.

The EPA wants 67% of new light-duty vehicles—such as sedans and pickup trucks—to be electric, along with 46% of new medium-duty trucks like delivery vans and 25% of heavy-duty vehicles like buses and heavy trucks.

The standards would mark a massive increase in EV sales: All-electric vehicles made up 5.8% of the 13.8 million new cars sold in the U.S. and fewer than two percent of new heavy trucks sold in 2022, according to data from the Kelley Blue Book.

At a press conference Wednesday, EPA Administrator Michael Regan said increased consumer demand and market-enabled development of battery technology made the administration’s goals a realistic standard.

Regan also said the administration was committed to bringing more electric vehicle manufacturing to the U.S., and not be dependent on China—where most electric vehicle batteries are produced—for battery manufacturing.

Big Number

10 billion. That’s how many tons of carbon emissions the Biden Administration is projecting the new standards would avoid emitting through 2055.

What To Watch For

The proposed rules, which will be available for public comment and review, are likely to face legal challenges.

Key Background

While sales of electric vehicles in the U.S. have increased in the past few years, automakers will need to heavily lean into electric vehicle manufacturing and sales to meet these new EPA requirements. The federal government has pushed to increase electric vehicle sales in the past: The Inflation Reduction Act, passed by congressional Democrats and signed into law last year, expanded tax credits for electric car purchases. But even then, the new standards fall short of some environmental recommendations. A International Energy Agency report from 2021 found that countries would have to completely stop sales of new gasoline-powered vehicles by 2035 in order to stop global temperatures from increasing 1.5 degrees Celsius. In 2021, the Biden Administration committed to reducing U.S. greenhouse gas emissions by at least 50% by 2030 and hit net-zero emissions by 2050.

Contra

Many automakers have argued the transition to all-electric vehicles could come at a cost. Last week, the Alliance for Automotive Innovation, a trade association that represents major automakers, questioned whether the proposed EPA changes were feasible and if the market was ready for “a massive,100-year change to the U.S. industrial base and the way Americans drive.” Some auto workers fear job losses as electric vehicles require fewer workers to assemble vehicles than internal combustion engines do. In the past year, both Ford and Chrysler parent company Stellantis have announced U.S. layoffs prompted by the shift to electric vehicles—Ford cut 3,000 jobs in August and Stellantis laid off more than 1,000 in February.

Surprising Fact

General Motors is fully leaning into the electric vehicle revolution, ramping up electric vehicle production as it aims to produce more than one million EV vehicles in North America in 2025. The U.S. automaker is aiming to solely make electric vehicles by 2035.