The Biden administration in the US has made a significant shift in its approach to fuel economy objectives, opting for a more relaxed stance that may impact the adoption of electric vehicles (EVs) in the country. The change in rules has eased the Corporate Average Fuel Economy (CAFE) standards, which evaluate the fuel economy average of a manufacturer’s fleet.
By making it easier for car manufacturers to meet the 2030 targets without heavy reliance on EVs, the administration is aiming for a fleet average of 5.5 liters per 100 kilometers for passenger cars and 7.6 liters per 100 kilometers for SUVs and pickups. This move comes in response to concerns raised by manufacturers following the US National Highway Traffic Safety Administration’s proposal to increase CAFE standards by two percent annually for passenger cars and four percent for SUVs and pickups over the next eight years.
The offset provided by EVs in achieving CAFE targets was initially expected to decrease by 72 percent by 2030. However, the Biden administration has now reduced this to 65 percent. This adjustment means that car manufacturers can approach a 50/50 balance between internal combustion engines and EVs in their fleet mix by 2030, rather than heavily relying on electric vehicles.
Prior to these relaxed goals, major US automakers, including General Motors, Stellantis, and Ford, were facing hefty fines for failing to meet stringent regulations pushing for EVs. GM and Stellantis alone had already paid fines totaling approximately $US363 million ($AU574 million) for non-compliance with CAFE standards.
On a different note, Australia is considering the implementation of a New Vehicle Emissions Standard (NVES) that assesses a manufacturer’s average fleet emissions rather than fuel economy. The proposal aims for gradual decreases in passenger cars and light-commercial vehicle emissions averages, targeting annual reductions of 6.8 and 3.8 percent, respectively.
The relaxation of rules in the US and the proposed NVES in Australia indicate a shifting landscape in the automotive industry, with a focus on balancing fuel economy objectives and emissions standards in the coming years.
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