The U.S. Environmental Protection Agency (EPA) has announced what are expected to be its most stringent vehicle emissions standards to date, a move anticipated to significantly boost the adoption of electric vehicles (EVs) and deliver substantial cost savings to American consumers. The agency formally unveiled these new regulations on April 12, 2023, in Detroit, Michigan.
New Standards Target Significant Emission Reductions and Cost Savings
The comprehensive regulations, set to take effect from 2027 through 2032, are designed to dramatically reduce tailpipe pollution. The EPA projects these measures will cut emissions by at least 40% by 2030 and could save owners of compliant vehicles an estimated $12,000 over the lifetime of their car. This initiative aligns with the Biden-Harris Administration’s commitment to protecting public health and addressing climate change, while simultaneously offering financial benefits to U.S. families.
“EPA Administrator Michael S. Regan will formally announce new actions the Biden-Harris Administration will take to accelerate the transition to a clean-transportation future, lower consumer costs, and protect public health,” the agency stated in relation to the announcement.
Administrator Regan emphasized the administration’s pledge to safeguard citizens, which necessitates environmental protection efforts. He highlighted that curbing harmful air pollutants and mitigating climate change are urgent priorities that can also yield economic advantages for American households.
Projected EV Market Share and Fleet Emission Targets
Under the proposed standards, electric vehicles are projected to capture a significant portion of the new vehicle market. The EPA estimates that by 2032, EVs could account for approximately 67% of all new light-duty passenger vehicle sales and 46% of new medium-duty vehicle sales in the U.S.
The standards will become progressively stricter each year, culminating in a fleetwide average target of 82 grams per mile of carbon dioxide for 2032 model-year light-duty vehicles. For medium-duty vehicles, the target for 2032 is 275 grams per mile. This represents a substantial reduction compared to the current rules, which aim for a fleetwide goal of 161 grams of carbon dioxide per mile by the 2026 model year for a combined fleet of light- and medium-duty vehicles. The EPA anticipates the new standards could reduce emissions by as much as 56% compared to existing regulations.
Flexibility for Automakers and Focus on Heavy-Duty Vehicles
Importantly, the new EPA emissions standards do not mandate specific EV sales percentages or ban gasoline-powered vehicles. Instead, they set performance targets that automakers must meet using any combination of vehicles. However, the stringent nature of these rules is expected to incentivize increased EV production and sales, particularly as many manufacturers have already made substantial investments in electric vehicle technology.
The regulations, referred to as Phase 3 by the EPA, also extend to heavy-duty vehicles, including school buses, delivery trucks, and construction vehicles. The objectives for this segment include achieving 50% of new bus sales and 25% of new heavy truck sales to be fully electric by 2032.
Broader Economic and Health Impacts
The implementation of these standards could lead to trillions of dollars in savings for the U.S. through reduced fuel and healthcare costs, while simultaneously eliminating approximately 10 billion tons of emissions. The EPA projects that by 2030, at least 50% of all new vehicles sold in the U.S. will be zero-emission vehicles, potentially reaching up to 10% higher. This marks a significant increase from 2022, when only 6% of new U.S. vehicle sales were fully electric.
Enhancements for EV Battery Durability and Warranties
In recognition of the growing role of EVs in automakers’ compliance strategies, the EPA is also proposing new requirements for EV battery durability and the inclusion of built-in battery health monitors. The agency plans to incorporate EV batteries and related powertrain components under existing emission warranty provisions, aiming to ensure the long-term reliability and effectiveness of these vehicles.
The EPA stated, “Recognizing that electrified vehicles are playing an increasing role in automakers’ compliance strategies, that their durability and reliability are important to achieving the emissions reductions projected by this proposed program, and that emissions credit calculations are based on mileage over a vehicle’s full useful life, EPA is proposing new battery durability requirements for light-duty and medium-duty BEVs and PHEVs. In addition, the agency is proposing revised regulations which would include BEV and PHEV batteries and associated electric powertrain components under existing emission warranty provisions.”
While detailed information is available from the EPA, the press conference was expected to provide the most comprehensive summary of the new guidelines. These proposed changes are subject to modification and will undergo a final approval process in the coming weeks and months.