What you should know about the new electric vehicle rule

The Biden administration announced rules Wednesday that are expected to facilitate a significant shift from gasoline-powered vehicle sales to electric vehicle (EV) sales.

For consumers, this is expected to mean more available and affordable EVs. Some analysts say it could have the opposite effect on gas-powered cars, making them more expensive and less available.

“Purely gas-powered vehicles will become even more expensive,” Sam Abuelsamid, principal research analyst for mobility at market intelligence firm Guidehouse Insights, said in an email.

New rules will make it more difficult for gasoline-powered vehicles to comply with Environmental Protection Agency (EPA) standards, which will gradually rise over time and require “more advanced technology that drives up prices,” Abuelsamid said. he said. He said.

At the same time, he pointed out that increased production and availability of EVs will lower average costs.

Other analysts disagreed. Amaiya Kardenavis, an EV charging infrastructure analyst at Wood Mackenzie, said he doesn’t expect prices for gas-powered cars to rise because the technology already exists.

“We are already in the mass market… [internal combustion engine] vehicle. “Therefore, in the future the price of EVs will be lower than that of gasoline cars, but we cannot expect the price of gasoline cars to be higher than the current price,” Cardenavis said.

The Biden administration said the rules issued Wednesday could leave just 29% of the new car market with gas-powered cars in 2032. Under the administration’s lowest-cost scenario, it is estimated that 56% of vehicles will be battery electric by the same year.13 Percent will be plug-in hybrids and 3 percent will be other hybrids.

This regulation does not explicitly mandate a transition to electric vehicles or any other specific vehicle types. Instead, it sets pollution standards for automakers’ fleets that are difficult to meet without increasing the share of electric cars and other low-carbon vehicles.

Chris Hart, senior policy analyst for transportation and energy at Consumer Reports, said the rules are not mandatory, giving automakers at least some degree of coordination to find the mix of technologies that best meets consumer demands. He pointed out that there was room.

“If for some reason battery electric vehicle sales are delayed, we have the flexibility to introduce more hybrids, plug-in hybrids, or alternative technologies,” Hult said.

“Within the structure of these rules, there is a lot of room to let the market decide, and there is room for different strategies for different automakers,” he added.

The rule was praised by the auto industry’s main lobbying group, which said the Biden administration made the right choice in delaying short-term goals in the transition to EVs.

“These adjusted EV targets, while still a stretch, should give the market and supply chain a chance to catch up. policies can take effect,” John Bozella, president and CEO of the Alliance for Automotive Innovation, said in a written statement.

“So what’s the big deal? This regulation takes into account the importance of driver choice and allows drivers to choose the vehicle that is right for them.”

But Abuelsamid said it would be difficult for automakers to meet their goals with gasoline-powered vehicles alone, and they could become increasingly rare.

“Achieving the combination of performance and gas-only efficiency that customers want will be difficult at any price,” he said. “I think gasoline cars will become even rarer, but hybrid cars should easily meet consumer demand.”

Cardenavis said the group’s electric vehicle demand forecast is relatively in line with the EPA’s forecast, meaning there is unlikely to be a shortage of gas-powered vehicles.

He said demand for gasoline-powered cars “will only continue to slow down.”

But the rule could face legal challenges in the near future, and oil industry trade groups have already threatened to take action. Therefore, it is unclear whether this rule will ultimately survive.

And Trump, a vocal opponent of electric vehicles and the Biden administration’s policies aimed at promoting them, could seek to roll back the standards if he wins the presidential election in November.

Nevertheless, Corey Kanter, an EV analyst at BloombergNEF, said the rule’s existence in the first place likely will help automakers prepare for an EV-driven future.

“Car manufacturers need to make sure they don’t wait too long when the rest of the market moves to cleaner vehicles, leaving them holding the bag or paying fines. , we may not be able to compete,” Kanter said. He said.