Joe Biden to Tighten Car Pollution Rules in Effort to Boost EV Adoption

The Biden administration is planning to propose the toughest-ever pollution rules for cars in the US as part of its efforts to combat climate change without outright banning internal combustion engines and mandating all-electric modes of transportation.

The proposed rules, which were unveiled to Bloomberg by people with knowledge of the matter, will prompt automakers to drastically cut CO2 and nitrogen oxide tailpipe emissions— supposedly up to 75%— starting with model years 2027 through to 2032. The proposed requirements— currently being drafted by the Environmental Protection Agency— will also include tougher standards on carbon emissions from heavy duty trucks, that are set to be announced separately as early as next week.

To encourage EV adoption, the rules would include incentives for automakers to produce more zero-emission vehicles previously outlined in the Inflation Reduction Act, such as higher credit multipliers for EVs with longer ranges. The administration is also reportedly considering a mandate for automakers to sell a certain percentage of EVs each year, similar to the approach taken by California and a dozen other states.

The proposed rules on car pollution are part of the Biden administration’s Paris Agreement commitment to axe greenhouse gas emissions by 50% from 2005 levels. Automakers are likely to resist the new rules, which could add costs to their operations and limit the availability of certain types of vehicles.

The transition to net zero will require a “massive, 100-year change to the US industrial base,” said the Alliance for Automotive Innovation, stressing that other factors also need to be considered before accelerating the shift from traditional combustion engines, such as charging infrastructure investments and increased critical mineral production.

Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.