By Riley Beggin | Twitter: @rbeggin
Washington — The leading advocacy group for car companies on Monday urged the Biden administration to “ease up” on proposed emissions rules that aim to push automakers to sell 67% electric vehicles by 2032.
It’s the industry’s strongest rebuke to date of the Environmental Protection Agency’s proposed rules, released in April and acknowledged by the agency as its most aggressive proposal yet to rein in greenhouse gas emissions from passenger cars and trucks.
In a blog post penned by John Bozzella, CEO for the Alliance for Automotive Innovation, the group argued that EPA’s proposed rules would give China an opening to dominate the auto market in the United States.
China has had electric vehicles at the center of its industrial policy for more than a decade. It now controls most supply chains for key minerals needed to make EV batteries.
Even though the Inflation Reduction Act will pump money into building up domestic and allied supply chains for critical minerals, it takes time to build new mines and stand up processing and refining facilities, Bozzella wrote.
So if policymakers require a rapid increase in sales of battery-powered cars, U.S. automakers will have to use minerals controlled by Chinese companies, he said, to “meet the aggressive (and arbitrary) EPA requirements.”
“And it will be subsidized, scratch that … incentivized by American public policy,” he wrote. “Unintended consequences … there’s no sugarcoating it.”
EPA spokesperson Shayla Powell said the agency “welcomes input on the proposal.”
The proposed rules call for a 56% reduction in emissions for model years 2027 to 2032. The EPA projects that by 2055, the rules would remove nearly 10 billion tons of carbon emissions — equal to twice the total U.S. carbon emissions in 2022 — reducing fine particulate matter in the air that can have negative health effects and potentially saving up to $1.6 trillion.
EVs represented 5.8 percent of U.S. sales in 2022, according to AutoForecast Solutions LLC, which expects that to jump to 8.8 percent this year. But even by 2032, the market forecast firm is unsure adoption will reach 45%. Other analysts’ predictions also fall below the EPA’s proposed 67%.
Bozzella cited the European Union as an example of how aggressive emissions requirements could give an opening to China:
“With a 2035 ban on fossil fuel vehicles looming, Chinese manufacturers gained a foothold and entered the European market at a budget price point,” he wrote. “They achieved a five percent share of Europe’s EV market in the first nine months of 2022 and are on a steady march to hit 20 percent by 2025.”
He also noted that automakers themselves are betting on EVs and won’t back off, but that a more “balanced” approach is appropriate.
Environmental and consumer advocacy groups have supported the EPA’s proposal and urged the agency to stay the course or propose even stronger requirements.
Automakers also reportedly withheld use of their electric vehicles for an event announcing the new rules in April, prompting officials to move the unveiling from Detroit to Washington.
The comment period for the proposal closes on July 5. The Alliance for Automotive Innovation, the American Petroleum Institute and the National Automobile Dealers Association unsuccessfully petitioned EPA to extend that period.
Staff Writer Breana Noble contributed