Targets deemed unrealistic by the industry's big names
A group representing nearly all major car manufacturers, including General Motors, Toyota, Volkswagen, and Hyundai, has asked the U.S. Environmental Protection Agency (EPA) to lower its vehicle emissions standards. These rules, finalized under the Biden administration, aim to accelerate the transition to electric vehicles (EVs). However, according to the Alliance for Automotive Innovation, the standards are no longer applicable in the current context.
The EPA requires a nearly 50% reduction in average passenger vehicle emissions by 2032. To achieve this reduction, the EPA estimates that EVs should account for between 35% and 56% of new vehicle sales between 2030 and 2032. However, the industry argues that market realities, the slow rollout of charging stations, and the fragility of the supply chain make these targets unattainable.
"Given market challenges and recent policy changes, the standards planned for 2027 and beyond are simply unachievable," the group said.
The elimination of tax incentives will weaken the industry.
As of September 30, the $7,500 federal tax credit for purchasing an electric vehicle (EV) will expire. Additionally, some manufacturers may lose access to a tax credit worth approximately $3,000 per vehicle for battery production as early as 2026. The industry believes that this situation threatens investments in electrification totaling hundreds of millions of dollars, as well as the entire supply chain.
A political standoff over the EPA
In July, the EPA proposed rescinding its long-standing conclusion that greenhouse gases endanger human health. Such a decision would remove the legal basis for all U.S. regulations on greenhouse gas (GHG) emissions.
Democrats in Congress and several environmental groups are denouncing this move, calling on the EPA to maintain the current rules. Manufacturers, for their part, believe that a compromise is necessary. They are urging the EPA to rewrite the Biden-era standards to be "realistic and predictable," while also providing a backup plan in case the standards are maintained or reinstated.