On Monday, the U.S. Energy Department (DOE) recommended lowering E.V. mileage ratings to fulfill federal fuel economy regulations, which might push automakers to offer more low-emissions cars or upgrade conventional ones.
DOE intends to dramatically change how it calculates the petroleum-equivalent fuel economy rating for electric and plug-in electric hybrids for the NHTSA’s Corporate Average Fuel Economy (CAFE) program.
It’s been 20 years since the system was upgraded.
In its proposed regulation, DOE stated, “Encouraging adoption of E.V.s can reduce petroleum consumption but giving too much credit for that adoption can lead to increased net petroleum use because it enables lower fuel economy among conventional vehicles, which represent by far the majority of vehicles sold.”
MPGe ratings are based on national electricity, petroleum generation and distribution efficiency, and driving habits.
Environmental organizations say E.V.s’ CAFE compliance fuel economy ratings are greater than those on the government’s consumer fueleconomy.gov website.
Last year, representing major manufacturers, the Alliance for Automotive Innovation cautioned that reducing values might have far-reaching consequences and hinder E.V. adoption.
On Monday, the organization said it was unclear how future CAFE requirements would integrate the DOE figure.
Under the DOE plan, a Volkswagen (VOWG p.DE) ID.4 E.V. with 380.6 MPGe under CAFE would receive 107.4 MPGe, and a Ford (F.N.) F-150 EV decreases from 237.1 to 67.1, and a Chrysler Pacifica plug-in hybrid lowers from 88.2 to 59.5.
“Excessively high imputed fuel economy values for E.V.s means that a relatively small number of E.V.s will mathematically guarantee compliance without meaningful improvements in the real-world average fuel economy of automakers’ overall fleets,” the Natural Resources Defense Council and Sierra Club petitioned for the change in 2021.
Tesla (TSLA.O) supported the environmental petition.
Last week, Reuters reported that the Environmental Protection Agency would propose new restrictions on Wednesday to curb car emissions and boost electric vehicle sales.
Sources stated the 2027 to 2032 model year emission cuts will result in at least half of the new U.S. vehicle fleet being electric or plug-in hybrids by 2030, meeting President Joe Biden’s 2021 objective.
NHTSA will shortly propose stricter CAFE standards. NHTSA reversed Trump’s reduction of car CAFE requirements in 2022.
If they fail CAFE, automakers buy credits or pay fines. For example, Stellantis (STLAM.MI), formerly Fiat Chrysler, paid $152.3 million in 2016 and 2017 CAFE fines and risks extra civil penalties. In addition, NHTSA tripled CAFE penalties in 2022.
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