When the Biden administration announced new U.S. auto-emissions regulations in March, it made concessions to industry allowing for a much slower electric-vehicle transition than it had proposed a year earlier.
Instead of aiming to convert two-thirds of new vehicles to EVs by 2032, it lowered that target and said automakers could comply by producing more gas-electric hybrids.
Then Environmental Protection Agency (EPA) chief Michael Regan made a surprising claim – that the relaxed rules would deliver essentially the same pollution reductions as the administration’s original proposal.
A Reuters examination of the rule changes and the agency’s emissions projections show the concessions will result in substantially more pollution than originally foreseen in two ways: by delaying stricter emissions limits for years; and by retaining an outdated formula for plug-in hybrids that the EPA concedes underestimates their real-world pollution.
Using the EPA projections, Reuters calculated that the rules allow the average-per-mile carbon emissions of light-duty vehicles to be 14% higher between 2027 and 2032 than in the original proposal.
Moreover, the plug-in-hybrid formula estimates their emissions to be between about 25% to 75% lower than they really are, depending on the vehicle’s battery range, according to data from researchers and California regulators.
That’s because the EPA formula assumes drivers charge their cars more (and use their combustion engines less) than most people do in reality.
Reuters compared the EPA formula with one using real-world vehicle-charging data from the International Council on Clean Transportation, a Washington-based think tank, and California automotive regulators.
In its original proposal, the EPA called for replacing the 14-year-old formula for plug-in-hybrid emissions with a measure “determined from real world data” on charging, but it decided under pressure from automakers to keep it until 2031. Some automakers argued a more restrictive formula would stifle plug-in innovation.
The EPA said in a statement to Reuters the new rules provide “significant” pollution reductions that are “achievable and affordable” for automakers and give consumers wide-ranging options.
The agency said it delayed changing the hybrid formula because of “extensive public comment,” from automakers and others, and considerations of “appropriate lead time” for developing cleaner vehicles.
Incentivising Hybrid Trucks, SUVs?
The impact of the generous regulatory treatment could be magnified if the rules incentivize more plug-in-hybrid production. These vehicles currently account for just 2% of U.S. retail auto sales, according to automotive analytics firm J.D. Power. All hybrids account for 11.9%, a share that has been rising.
Environmental advocates expressed concern that Detroit automakers, which depend on truck-and-SUV sales, could respond to the EPA regulations with plug-in versions of popular gas-guzzlers that might be only marginally more efficient.
The EPA said its rules will not incentivize inefficient plug-ins because automakers would have to offset them with more efficient vehicles.
Stellantis, which makes Jeep SUVs and Ram pickups, has proven the concept of applying plug-in technology to relatively inefficient SUVs.
The automaker may see the biggest benefit from the hybrid-friendly rules because it’s among America’s most prolific tailpipe polluters and the nation’s leading seller of plug-in hybrids, including “4xe” versions of its Jeep Wrangler and Grand Cherokee.
Stellantis said in a statement that its 4xe models offer lower emissions for customers wanting a powerful off-road vehicle. Reducing pollution, Stellantis said, requires automakers to produce cleaner vehicles that serve “a wide range of consumer demands.”
General Motors said in January, shortly before the EPA announced the new rules, that it planned to build plug-in hybrids for North America after previously eschewing all hybrids as a distraction from EVs.
Ford has recently seen surging sales of traditional hybrids, including pickups, and sells a plug-in Escape SUV.
GM said it expects plug-in hybrids to grow from a “small niche” into a bigger opportunity over three years, adding: “We’ll be ready.” Ford said its hybrid strategy predates the EPA decision.
Emissions vary widely
EVs produce zero tailpipe emissions but hybrid pollution varies widely by model. Plug-ins travel short distances on electric-only power before their gasoline engines are needed.
Some are highly efficient, such as Toyota’s Prius Prime, which travels 44 miles on electricity and gets 52 mpg thereafter.
But the Jeep Wrangler 4xe, America’s best-selling plug-in hybrid, isn’t exactly a green machine. The appeal of this electrified off-roader, in fact, may be based more on the power rather than the efficiency its battery provides, according to a Reuters review of online comments from 4xe owners.
The electrified Wrangler produces a prodigious 375 horsepower and 470 pound-feet of torque, significantly more than standard gasoline-powered Wranglers.
But its electric-only range is just 21 miles, after which the vehicle gets only 20 mpg – slightly worse than a gasoline-powered Wrangler with the same turbocharged engine.
Stellantis said the 4xe model, which accounts for about half of Wrangler sales, helps it comply with regulations but that it has bigger plans for clean vehicles, including 25 U.S. EV models it aims to launch by 2030.
Electric versions of its Ram pickup, Jeep Wagoneer and Dodge Charger will go on sale this year.
Hybrids for ‘Torque and Speed’
The EPA’s outdated plug-in-hybrid formula gives automakers outsized credit for pollution reductions because it assumes drivers charge daily and rarely burn gas.
“Unfortunately, none of those things appear to be true in the real world,” said Aaron Isenstadt, a senior researcher at the International Council on Clean Transportation.
The EPA formula gives Stellantis a reduction of about 40% in estimated pollution for a plug-in Wrangler, compared to its emissions while using gasoline. The allowance is based on its electric-only range.
A Reuters review of online Jeep forums found some owners touting the 4xe’s efficiency but others saying they don’t regularly charge it because they bought it for other reasons. One Reddit user this year reported charging twice a week and driving longer than the electric range daily: “Really it’s the torque and speed I love my 4xe for.”
Jeep tries to ease drivers’ charging anxieties. “Do I need to charge my 4xe vehicle every night?” it asks in a “your questions answered” section of its website. “No! You only need to charge your 4xe vehicle when you want to.”
Stellantis said that its customer feedback shows most regularly charge, and that Jeep offers an “Eco Coaching” app to help owners drive efficiently.
Pollution Politics
The EPA’s original proposal aimed for a 67% EV market share for new cars in 2032, compared to less than 8% in 2023. Under the final rules, the EPA projects slower adoption in a wide range – between 35% and 56% by 2032 – rather than with a specific target, reflecting the flexibility to comply using hybrid engines and other technologies.
The EPA’s retreat came amid political pressure on Democratic U.S. President Joe Biden as he seeks re-election in November. Biden and his Republican rival, Donald Trump, both need to win Michigan, an auto-industry hub and a critical election battleground. Trump trashes EVs as a job-killer.
The EPA standards, while less strict than proposed, do require substantial pollution reductions over the rules they will replace.
The agency told Reuters that the differences between pollution allowed in its original proposal and final rule will become smaller over time, once the strictest standards are in place.
It said that, when projected through 2055, the final rule would achieve 94% of the carbon-emission reductions predicted in its original proposal.
But it remains unclear whether the toughest restrictions, which don’t take effect until after 2030, will survive in future administrations.
Automakers have a history of lobbying to delay strict regulations for years – then working to reverse them. That happened in the transition between the administrations of Barack Obama and Trump.
Detroit automakers agreed to support stricter emissions standards in 2011 after talks with the Obama administration. But the industry convinced Trump’s administration to weaken them after he took office in 2017, before the toughest provisions took effect.
