Automakers say proposed US emissions rules pose challenges

By David Shepardson

WASHINGTON (Reuters) – An auto trade group warned on Tuesday that aggressive U.S. targets for reductions in vehicle emissions may rely on a too rapid transition to electric vehicles (EVs) and pose significant challenges with manufacturing and supply chains.

The U.S. Environmental Protection Agency (EPA) has proposed sharp emissions cuts that it estimates would result in 60% of new vehicles by 2030 being electric and 67% by 2032.

The Alliance for Automotive Innovation, representing General Motors (NYSE:), Toyota Motor (NYSE:), Volkswagen AG (OTC:), Hyundai Motor and others, said automakers will struggle to meet those targets because of problems with the supply chain for EV batteries, motors and chargers as well as consumer resistance.

The EPA proposal, if finalized, represents the most aggressive U.S. vehicle emissions reduction plan to date, requiring 13% annual average pollution cuts and a 56% reduction in projected fleet average emissions over 2026 requirements.

The automaker group warned the proposal could have “significant impacts to automakers, workers, consumers and ultimately the availability of vehicles that meet the needs of individuals, families and businesses across the country.”

In August 2021, major automakers agreed to a goal of producing between 40% and 50% EVs or plug-in electric hybrids by 2030. President Joe Biden signed an executive order establishing a 50% goal.

“In that context, EPA’s proposed greenhouse gas standards for 2027-2032 represents a significant movement of the country’s electrification goal posts – not by a little, but by a lot,” the automaker group wrote.

Environmentalists are pressing the Biden administration not to soften the proposal. Some say EPA should have proposed tougher rules.

The automaker group noted EVs represented about 6% of new light-duty vehicles sales in 2022, up from about 3 percent in 2021 and 2 percent in 2020.

“These proposed rules effectively require an additional 10-fold sales increase in a mere eight years,” the automaker group wrote. “EPA is also proposing the most stringent criteria pollutant regulations ever, premised on largely the same levels of zero emission vehicles.”