Biden to announce target for 50% electric vehicle sales as he unveils stricter emissions rules

President Joe Biden will sign an executive order Thursday setting a target for half of all new vehicles sold in the United States to be electric or carbon-free by 2030 as part of a push to reduce the use of gasoline in transportation, the biggest driver of greenhouse gas emissions causing climate change.

The Biden administration will also unveil a proposal to impose stricter standards for fuel-efficiency and tailpipe emissions for cars and light trucks as it seeks to undo a major regulatory rollback of former President Donald Trump.

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The new fuel economy standards and emissions rules set by the Transportation Department and Environmental Protection Agency are consistent with stricter measures imposed by California, a state that joined with several automakers to break from Trump’s weakening of fuel economy mandates.

Biden will be flanked by industry officials from Ford, General Motors, and Stellantis, the company formerly known as Fiat Chrysler, along with the United Auto Workers union at the White House Thursday afternoon as he makes the dual announcements to project unity with automakers already cleaning their gasoline-powered fleets and moving to electric vehicles.

A Biden administration official told reporters automakers that represent an “overwhelming” percentage of the U.S. market would announce their own pledges for electric vehicles to make up between 40%-50% of new car sales by the end of the decade.

Biden’s executive order setting a sales target of 50% electric vehicles does not carry the force of law, and it will apply to battery electric vehicles and fuel cell-powered and plug-in hybrids.

But the official said the president’s target is intended to “galvanize private investment and congressional action” to send a “clear direction that we intend to not only enhance deployment of these vehicles but work as hard as we can to seize a leadership position in electric vehicles around the world.”

“We are hearing consensus on the direction this industry is going, and we are coming together to say that this is a moment of truth that allows us to strengthen American leadership in clean cars and trucks,” the Biden administration official said.

The enhanced fuel economy standards and emissions rules are one part of Biden’s multi-pronged agenda to promote greater use of electric vehicles, which remain a small part of U.S. sales even as automakers shift to produce and sell mostly electric vehicles.

The rules will match a 2019 pact between California and five automakers — Ford, BMW, Honda, Volkswagen, and Volvo — that mandates a 3.7% annual mileage increase in fuel economy through the 2026 model year. That is not as strict as requirements set by the Obama administration for automakers to raise fuel economy by 5% per year.

Trump weakened that mandate to require a 1.5% year-over-year increase in fuel efficiency, acting at the behest of automakers who said consumer preference for larger vehicles, such as SUVs and pickup trucks, made the Obama administration standards unattainable.

The Trump administration also revoked California’s Clean Air Act waiver for greenhouse gases, which allows the state to set tougher tailpipe emissions rules than the federal government. More than a dozen states and Washington, D.C., follow California’s aggressive vehicle emission standards.

Trump’s moves ended up fracturing the auto industry because of the prospect of a long legal battle that could lead to two different car markets in the U.S.

Some automakers that originally backed the Trump administration’s rules — including GM, Toyota, and Fiat Chrysler — eventually switched sides to get in the Biden administration’s good graces.

The Alliance for Automotive Innovation, the main auto industry trade group, soon announced it would support fuel economy targets “roughly midway” between the Trump administration’s revisions and the Obama standards.

What has shifted is many individual automakers are ramping up plans to go electric as they face public and investor pressure to address climate change.

GM has already announced plans to eliminate tailpipe emissions from its vehicles by 2035, a step that likely means it will transition from selling gas-powered cars.

Volvo said it would only sell electric vehicles by 2030. Just this week, Ford announced it plans to spend more on electric vehicles than it does on gasoline-powered vehicles starting in 2023, the first time in its 118-year history.

But automakers have warned stricter fuel economy rules won’t spur sluggish demand for electric vehicles without complementary policies.

Biden’s Build Back Better agenda also proposed providing rebates for consumers purchasing electric vehicles, along with investing more in charging infrastructure to reduce range anxiety, spending on technology to reduce the cost of batteries, and incentivizing factories to build the cars.

The bipartisan infrastructure agreement progressing in Congress provides $7.5 billion to help build a network of electric vehicle chargers across the country and includes measures to bolster the supply chain for electric vehicle equipment, including batteries and critical minerals. It does not include consumer subsidies, which Democrats are expected to pursue as part of a second larger infrastructure bill without Republicans.

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“The Build Back Better agenda will allow us to unleash the full economic potential this shift represents,” the Biden administration official said.

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