Auto Lobby Says EPA Targets Aren’t Achievable

The Alliance for Automotive Innovation (AAI) is reportedly prepared to tell the Environmental Protection Agency (EPA) that its proposal to significantly reduce vehicle emissions through the 2032 model year is wildly unrealistic. The lobbying group believes that the government’s proposed targets are “neither reasonable nor achievable in the timeframe provided."

An internal memo was released on Wednesday, stating that the regulations introduced by the U.S. government earlier this year were so stringent that they were "a de facto battery-electric vehicle mandate.”

Updated guidance from the EPA has resulted in the most aggressive vehicle pollution standards the United States has seen so far. Under the new rules, passenger vehicles from the 2027-32 model years would now require 13-percent fleet-wide average emission reductions per year and a 56 percent reduction in average emission target levels from the 2026 model year.

Automotive News, which shared the memo and information that the AAI was going to be dressing down the EPA, suggested that the rules could force EVs to comprise half of new-vehicle sales by the 2030 model year and two-thirds by 2032. While it’s not clear why that would be surprising when the Biden administration went into office stating that as one of its primary goals.

From Automotive News:

The EPA in a statement to Automotive News said it "plans to post a response to comments in the docket for all comments, consistent with ... requirements under the Administrative Procedure Act and the Clean Air Act."

The public comment period for the proposal closes July 5.

Neither Biden nor his administration has called for a ban on sales of new combustion engine vehicles by a certain date — actions that are underway in places such as California and the European Union.

The EPA's proposal also does not mandate a specific technology such as EVs. Instead, it is designed to allow automakers to meet the performance-based requirements through multiple pathways, including efficiency improvements in internal combustion engine vehicles.

I’m not sure what they’re smoking over there at Automotive News. But forcing someone to give you their money is still robbery even if you call something else. The Biden-Harris administration has explicitly stated that one of its primary goals was having 50 percent of all new vehicle sales be electric by 2030 and these new regulations would effectively mandate that while it floods the industry with financial incentives to build more batteries.

As unhappy as it makes me to admit this, I’m siding with the automotive lobby on this one. But it’s hard to have any sympathy for the industry after so many manufacturers have been chanting the mantra of electrification since 2016.

The industry has been wildly anti-consumer in some of its recent practices and your author has been required to absorb countless press releases using language that borders on ridiculous. Marketing materials often fall just shy of calling electric vehicles the savior of mankind and just about every automotive brand has promised to pivot toward EVs as if the meme suggestion is worthy of our collective praise. There’s an unpleasant and hollow zealotry underpinning everything.

While electric vehicles certainly have a place in the industry, the push to see them widely adopted has been inorganic. Government regulators across the globe seem borderline obsessed with controlling how the public travels, especially if you’re using a conveyance reliant upon burning fossil fuels.

But the premise that electric cars default as good is starting to fall flat. Consumers are becoming increasingly aware that some of the raw materials used in battery production are difficult to source, controlled by a limited number of countries, involve some less-than-ideal mining practices, and often pollute the surrounding environment when being refined. Rolling layoffs being attributed to industry commitments to electrification and automation are also beginning to rub people the wrong way.

At this stage, it seems like legacy manufacturers wouldn’t want to intentionally tank the electric car. There’s been too much invested into the scheme. Companies have spent billions of dollars on development programs and factory retooling dedicated toward the production of EVs. But it sometimes feels like the relevant lobbying groups want to walk things back.

This could be because EV adoption rates haven’t increased at the pace the industry originally envisioned. If you count plug-in hybrids, new-model EV sales are hovering somewhere around 7 percent right now. Cost parity with combustion models, which was assumed to be even by 2025, isn't on track to happen either. Industry pushback may also have something to do with battery suppliers signaling that there just won’t be enough raw materials to produce cells at a speed that is going to satisfy their clients. But we know that the auto lobby typically signals the business sector’s true desires and it seems concerned about the status quo.

With the NHTSA having recently advised automakers not to comply with Massachusetts’ right-to-repair laws, effectively running with some ridiculous industry talking points, it’s a little difficult for me to believe the EPA isn’t likewise subject to corporate influence. Under the Trump administration, the industry was given more leeway to manufacture gas-powered vehicles as aggressive fueling standards were walked back. While the Biden administration has called for more stringent emissions limits, it also reset the EV tax credit system and set the stage for the industry to receive indefinite financial assistance from the government to build EVs — provided they adhere to the preferred regulatory requirements.

But the AAI is arguing that the EPA’s terms "cannot be met without substantially increasing the cost of all vehicles, reducing consumer choice and disadvantaging major portions of the U.S. population and territory.”

Ironically, this was the same thing said by the Trump administration when it attempted to scale back Obama-era emissions requirements deemed untenable. At the time, the automotive sector was favorable to the idea of lessened regulatory standards. But individual automakers continued to signal that electrification was their ultimate goal, with many vowing to adhere to the stringent requirements issued by California no matter what the federal government decided.

Additionally, the group said the EPA "unrealistically assumes … an over-abundance of battery critical mineral mines, critical mineral processing capacity and battery component, cell and pack production facilities lead to continued battery price reductions."

It also argues the proposal underestimates the cost of EV batteries, overestimates the availability of consumer and manufacturing tax credits such as those in the Inflation Reduction Act and wrongly excludes plug-in hybrids and fuel cells from its projections.

In a blog post published Wednesday, Alliance CEO John Bozzella said the EPA proposal would require automakers to "eke out some incremental improvements by installing expensive new technology on all internal combustion engines," while potentially taking capital away from investments in electrification.

Bozzella likewise requested that the EPA align its proposal with the California Air Resources Board and NHTSA's forthcoming fuel economy standards. As it turns out, nobody wants to try and comply with numerous agencies’ varied regulatory requirements.

"The next couple years are make or break," he stated in the blog post. "The auto industry is making huge progress on electrification and continued improvements to internal combustion engine technology. Don't toss it away now. Let's come out of this process with a balanced, achievable and durable rule that maintains customer choice and doesn't blunt America's EV momentum."

Bozzella had previously suggested that regulators and politicians could undermine the industry and effectively give Chinese brands the advantage in terms of battery supply if they attempt to fast on rules that effectively mandated EVs. While that sounds a tad goofy on the surface, there’s actually something here.

At present, China totally dominates global battery production and is only poised to get bigger as electric cars become mandated around the world. If the United States transitions to all-electric vehicles immediately, that’s going to throw a lot of business at Chinese companies. However, if North America’s EV adoption rates keep pace with domestic battery production ramping up, then there’s a chance that Western suppliers become more competitive.

It seems like something the industry should have been aware of before brands started vowing to electrify their entire vehicle lineup. But here we are. The industry wants the government to pump the brakes and (presumably) sweeten incentives to encourage localized battery production and offset high EV pricing.

[Image: JL IMAGES/Shutterstock]

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