Biden Ditches Trump Mileage Cuts, Targets EVs As Half U.S. Car Sales By 2030

Biden Ditches Trump Mileage Cuts, Targets EVs As Half Of U.S. Car Sales By 2030
President Biden, standing in front of a Jeep Wrangler 4xe plug-in hybrid, says he wants half of all U.S. car sales to be electric vehicles by 2030. AFP Via Getty Images

The Biden Administration took several steps towards achieving carbon neutrality in the auto industry Thursday, not only reversing the sharp cuts in federal mileage standards ordered by former President Donald Trump, but also with an aggressive goal to make half of all U.S. auto sales zero-emissions vehicles by 2030.

The targets won’t be easy to meet, Biden acknowledged, especially boosting electric vehicle sales from low single-digit levels today. And they will require a hefty investment by the government if the U.S. is to be more than an also-ran. Plug-in and fuel-cell electric vehicles also will count toward the mix.

The future, “is electric and there’s no turning back,” the president said before signing the executive order that sets the plan in place. “The question is whether we’ll lead. Right now, China is leading the race.”

China is not only the largest market for battery-powered vehicles but produces about 80% of the batteries used by the auto industry worldwide. According to a report by price reporting agency Benchmark Mineral Intelligent, there are 93 automotive battery plants in China compared with just four in the U.S.

Several new U.S. plants have been announced by battery suppliers as well as automakers, including General Motors, Ford and Stellantis (formerly Fiat Chrysler Automobiles). But experts question whether that gap will narrow without significant government intervention.

2022 Chevrolet Bolt EUV
General Motors’ Chevrolet Bolt EUV is not currently eligible for the $7,500 tax credit, and as such is priced at a competitive starting price of $36,500. Chevrolet

It would help to have a big jump in demand in the U.S. market. Currently, pure battery-electric vehicles, or BEVs, account for just over 2% of new vehicle sales, according to industry data firm MotorIntelligence. Adding in hybrids and plug-in hybrids brings that up to around 6%. But the trendline is moving up at an aggressive pace. During the first six months of this year, sales of PHEVs and pure BEVs doubled over the year before.

It’s helped to have a significant increase in the number of long-range models available, with products such as the larger Chevrolet Bolt EUV (electric utility vehicle), Ford Mustang Mach-E and Volkswagen ID.4 debuting during the 2021 model-year. Others, such as the Mercedes-Benz EQS, GMC Hummer, Ford F-150 Lightning and Rivian R1T will follow in 2021.

During the White House signing ceremony, President Biden was flanked by senior executives from the Detroit “Big Three,” including General Motors CEO Mary Barra. Notably absent was Elon Musk, the Tesla CEO, who tweeted, “Seems off that Tesla wasn’t invited.”

But despite any sour grapes at being left out, the response to the EV order was, from the auto industry perspective, all but entirely positive, both from Detroit and foreign-owned manufacturers.

“You can count on Toyota to do its part,” the automaker said in a statement. Both Nissan and Honda said they support the president’s goals, as well.

Rivian R1S
Delivery of electric carmaker’s R1T pickup and R1S SUV (pictured) have undergone several delays, but the company said the vehicles will go on sale this fall. The startup’s EVs would not eligible for the new proposed maximum $12,500 tax credit. Rivian

EV start-up Rivian was a rare critic within the industry. “This draft proposal would drive us in the right direction after several years in reverse,” said Chris Nevers, Rivian’s senior director of environmental policy, “but slowly getting back on track is not enough.”

That position was echoed by some environmentalists. Many activists have been pressuring the Biden White House to echo steps taken by both Canada and the European Union, where the sale of new vehicles using internal combustion engines are expected to be banned by 2035.

“Today’s proposal relies on unenforceable voluntary commitments from unreliable car makers,” wrote Dan Becker, director of the Safe Climate Transport Campaign of the Center for Biological Diversity, in a statement. Describing the Biden plan as “loophole-ridden,” Becker said “strong rules” are the only way to get automakers to cut emissions.

While the wave of new electrified products coming to market over the next few years should help build demand, the president acknowledged the government will need to lend support. He stressed some of the goals the administration has already outlined such as the installation of a nationwide charging network as well as tax credits, loans and grants to support research and development of new batteries and battery vehicles.

Biden also praised a proposal co-authored by Michigan Congresswoman Debbie Dingell that would see the current $7,500 federal tax credits for EV buyers jump to as much as $12,500 for models built in the U.S. using union labor.

Energy Secretary Jennifer Granholm visits GM's FactoryZERO
U.S. Energy Secretary and former Michigan Governor Jennifer Granholm visits General Motors’ Factory Zero in Hamtramck, Michigan. The plant is GM’s first pure EV production facility. Getty Images

While the primary focus during Thursday’s signing ceremony was on EVs, the administration also reversed the cuts made to the Corporate Average Fuel Economy (CAFE) standards under Trump. As originally enacted under the Obama Administration, mileage was to jump an average of 5% annually, reaching more than 50 mpg over the next five years. Trump ordered that cut to 1.5 a year, a drastic reduction that had little industry support.

The complicated new CAFE target will work out to a mileage increase of 25% through the four years ending in 2026. According to a White House briefing, the Environmental Protection Agency and the U.S. Department of Transportation, the two agencies involved in the rulemaking, say the new fuel efficiency and emissions standards will save about 200 billion gallons of gasoline, and reduce around two billion metric tons of carbon pollution.