This post was originally published on this site
The Biden administration will raise gas mileage standards and cut tailpipe pollution between now and model year 2026, officials announced Thursday. Biden also secured a voluntary pledge from the auto industry that electric vehicles will comprise roughly half of U.S. sales, pushing out competing gas-powered engines, by 2030.
The mileage efficiency rules, also known as CAFE standards (Corporate Average Fuel Economy), still have to go through the regulatory process. They would reverse fuel economy and anti-pollution rollbacks under a regulation-lite Trump administration, a time period that saw many automakers lean one way and then the other as some had already adjusted their car and truck designs to favor changing consumer demands for greener vehicles in California and elsewhere.
Automakers General Motors
GM,
Ford
F,
Toyota
TM,
and Tesla
TSLA,
have told Biden their cooperation hinges in large part on his continued push for consumer tax credits and other infrastructure support for the big shift to EVs. Opponents to more stringent vehicle rules have argued that relatively cheap U.S. gasoline has empowered more U.S. households to drive to better-paying jobs and for U.S. businesses to compete globally.
“
Opponents to more stringent vehicle rules have argued that relatively cheap U.S. gasoline has empowered more U.S. households to drive to better-paying jobs and for U.S. businesses to compete globally.
”
For now, consumers still have a wide array of choices between fossil fuel-powered or internal-combustion-engine (ICE) vehicles, hybrid vehicles that use electric power to supplement gasoline power, and fully electric vehicles, most of which require at-home overnight charging while the network of EV hookups around the nation slowly expands and evolves to offer quicker charges, similar to the speedy roadside fill-ups consumers are used to. Biden’s separate initiatives push for broader solar and wind power for the nation’s electrical grid, whose output will be tested by increased EV charging.
Here’s a brief look at the figures, costs and savings associated with the Biden mileage and EV plan:
What do the Biden changes mean for mileage per gallon? Administration officials said the new Biden standard would be 52 miles per gallon by 2026, on average. For comparison, regulations enacted by the Obama administration in 2012 required that passenger vehicles sold by automakers achieve an average of roughly 51 miles per gallon by 2025. Trump loosened the standard in 2020 to about 44 miles per gallon by 2026.
The Biden administration plans another set of tougher mileage regulations for vehicles produced beyond 2026, which is seen pushing manufacturers into exiting the ICE market.
Fuel economy is important to buyers, according to Consumer Reports. Its recent fuel economy survey found 94% of consumers felt fuel economy was important to them when buying a new vehicle. In addition, fuel economy has consistently been the No. 1 attribute that has the most room for improvement on their current vehicle, consumers tell the nonprofit advocacy group. That’s almost twice as often as consumers cite price and reliability, and three times as often as horsepower.
How much will drivers save at the gas pump? Stricter CAFE standards are expected to save consumers $900 annually in gasoline, on average, said environmental policy group Climate Power.
Will this make a dent in emissions? Mileage efficiency is expected to cut car emissions by 2 billion tons, the White House estimates, and will prevent the burning of about 200 billion gallons of gasoline. Gas-powered cars and trucks are the largest single source of greenhouse gases produced in the U.S., accounting for 28% of the nation’s total carbon emissions, according to the EPA.
Are EVs already seeing a sales jump? EV sales held at a slim 2% of the total vehicles sold in the U.S. in each of the past three years, according to International Energy Agency data. The EV share of the U.S. auto market is projected to be 20% annually by 2030, particularly if tax incentives or other promotions continue, says the Edison Electric Institute. By 2045, Ernst & Young predicts gasoline vehicles will make up less than 1% of new car sales globally.
Can consumers still receive an EV tax credit? Biden’s proposal to include $100 billion in new electric-car subsidies has been dropped from the pending infrastructure bill, but an existing federal-tax incentive remains. The savings do not come off the initial price of the car, no matter how car sellers may market this incentive that way. Buyers can claim up to $7,500 in credit against the federal income taxes owed in the year in which the car is purchased, lowering their federal tax liability. If the federal tax owed is lower than the amount of the credit, taxpayers receive the difference in a refund. The incentive does not apply to used cars.
How much more do EVs cost than a comparable gas-powered vehicle? “Most EVs still have a bit of a price premium, but that is rapidly changing,” Chris Harto, senior policy analyst for transportation and energy with Consumer Reports, told MarketWatch.
Nissan, for instance, just reduced the price of its 2022 Leaf so that it now starts at $20,000 (when the tax incentive is factored in), which positions it in line with most compact cars on the market, and less expensive than a few compacts.
Is there other savings to consider? A Car and Driver analysis of the electric Volkswagen ID.4 and its similarly sized, gas-powered Tiguan small SUV found a similar cost comparison over five years for the two vehicles. The EV base price was just over $45,000 compared to the Tiguan’s $33,700. But the EV won out on tax credits, saved some $3,500 in fuel over five years and required about one-third the maintenance costs of its gas-powered equivalent over five years. The EV’s resale value was also higher. Insurance, however, was cheaper on the traditional Tiguan. In all, the ID.4 cost $37,874 from purchase price to five years of ownership; the Tiguan cost $36,378.
Related stories:
Yes, you can still get electric vehicle tax credits — here’s a guide
Buying a home? Why you should ask whether it’s wired for electric vehicles even if you don’t own one
Read Barron’s:
Biden’s EV Plan Means Billions in Spending. Here’s Who Benefits
