Last spring, the White House proudly rolled out new proposed regulations on tailpipe emissions as part of its effort to speed up the country’s embrace of electric vehicles. The rules were supposed to be finalized next month. Now officials are backtracking. “Instead of essentially requiring automakers to rapidly ramp up sales of electric vehicles over the next few years, the administration would give car manufacturers more time, with a sharp increase in sales not required until after 2030,” The New York Times recently reported.
The Environmental Protection Agency’s regulations on tailpipe emissions—both in the earlier proposal and in the new version—are intended to establish updated fleet-wide emissions targets. Rather than requiring automakers to produce certain cars, the rules are structured so as to allow automakers to choose how to comply with them. In other words, manufacturers are free to determine what composition of internal combustion engines, hybrids, and electric vehicles will allow them to satisfy regulations. The EPA projected that the rules it had originally proposed could mean 67 percent of sales of new cars and light-duty trucks would be all-electric by 2032. But with the change of plans, the Times reports, standards will now come into effect more gradually and give automakers more time to adjust. In a possibly related development, recent polling in Michigan, home of “Big Three” U.S. automakers, Ford, General Motors, and Stellantis, show Biden trailing Trump in this crucial swing state.
The shift is being framed as a concession to car companies and the labor movement, which both pushed back on new requirements. Yet it also highlights a core tension at the heart of the Biden administration’s approach to decarbonization, between the goals it espouses and the actual policies it puts out.
The administration’s goals are relatively ambitious. The White House aims to cut greenhouse gas emissions in half by 2030. It has proposed and implemented some regulations toward that end. But the Biden team’s messaging has mostly focused on the clean energy incentives it championed in Congress via the Inflation Reduction Act. That law is not designed to cut emissions so much as to help companies produce more of the things that can help cut emissions in the United States. Those include electric vehicles, which—if they’re made wholly or mostly in the U.S.—now benefit from a bevy of consumer and producer-side subsidies.
Those incentives that the IRA provides for electric vehicles seem to be working well on their own terms: Fully electric vehicles and hybrids accounted for an estimated 9.2 percent of all cars sold last year, up 50 percent over the year prior and at the high end of the impact analysts expected the IRA to have on vehicle sales. Emissions from the transportation sector, meanwhile—this country’s biggest-emitting sector—rose by 1.6 percent over the same time period. Through September 2023, road traffic volumes increased by 2.2 percent over 2022 levels, leading to increased consumption of gasoline.
The fundamental problem here is that green industrial policy and decarbonization are different goals, even if they sometimes overlap. Green industrial policy, which is what the IRA is, aims to build out strategic export industries and make supply chains for certain goods less dependent on—if not totally independent of—foreign countries, especially China. That’s why the Inflation Reduction Act features incentives for electric vehicles made in the U.S. and disincentives for competitors. New requirements that took effect at the start of this year mandate that automakers who want their vehicles to qualify for consumer-side tax credits source 50 percent of their components either from the U.S. or countries with which it has a free trade agreement. Last year, 28 cars—including different versions of 14 models, made by five different automakers—qualified for full or partial E.V. tax credits. As a result of tightening rules on E.V. tax credits, just 19 cars across nine models currently qualify.*
As I’ve written before, U.S. automakers are especially ill suited to steward a reduction in transportation-sector emissions. They’ve spent the last several decades prioritizing big, heavy cars that both skirt energy efficiency rules and allow them to charge more for superfluous features. Such hulking trucks and SUVs are difficult and resource-intensive to decarbonize, which is especially challenging given that the so-called critical minerals they demand are largely mined and refined outside of the U.S. Selling them, moreover, has meant cultivating a customer base less open to the smaller cars that dominate global E.V. sales. The Big Three effectively ceded the market for those kinds of smaller vehicles to foreign automakers. Now faced with the prospect of electrification, they’re trying to fit a square peg—massive, expensive cars—into the circular hole of passenger vehicle electrification.
If the White House’s goal were simply to get people in the U.S. to buy as many E.V.s as possible, they wouldn’t limit the types of cars that qualify for incentives like this. If the goal were to decrease transportation-sector emissions, their focus would likely be less on electric vehicles than on a rapid expansion of mass transit. The tensions between green industrial policy and decarbonization is a dilemma in the literal sense, of choosing between two possibilities: a maximally competitive U.S. auto sector and a minimally carbon-intensive one. In watering down tailpipe emissions regulations, the administration has chosen to prioritize profligate U.S. automakers over the climate.
* A previous version of this story incorrectly suggested that Ford does not have models eligible for IRA tax credits.
