U.S. Fuel Economy Regulations Tightened: MY 2026 CO2 171 g/mile, CAFE 52.0 mpg

Biden administration announces 2030 goal to make 50% of light-duty vehicles EVs, PHEVs, and FCEVs

2021/09/24

Summary
EPA announced fuel economy regulations that set CO2 emissions at 171 g/mile and CAFE at 52.0 mpg for MY 2026
EPA’s forecast of each company's BEV + PHEV ratio
Biden administration: Announced target of 50% of sales in 2030 as EVs, PHEV, and FCEVs
U.S. Congress to consider infrastructure bill including USD 7.5 billion for EV charging networks

Summary

This report provides an update on the status of the new model year (MY) 2023-2026 fuel economy standards, the goal of having 50% of light-duty vehicle sales be BEVs, PHEVs, and FCEVs (battery electric vehicles, plug-in hybrid vehicles, and fuel cell vehicles) by 2030, and congressional deliberations on funding for EV charging networks and other projects included in the infrastructure development bill announced by the U.S. Biden administration in August 2021.

The U.S. Environmental Protection Agency (EPA) has announced proposals for new U.S. light-duty vehicle fuel economy standards for the model years 2023 through 2026. The proposal sets the MY 2026 CO2 emission standard to 171 g/mile and CAFE (Corporate Average Fuel Economy) standard to 52.0 mpg (miles per gallon, about 22 km/L), exceeding the 2012 Final Rule Standards that were formulated in 2012 under the Obama administration, and becoming the strictest standard in the history of CAFE in the United States.

The EPA said that this regulation can be achieved by utilizing technologies already in use by automakers and by increasing the number of EVs and PHEVs to some extent. In MY 2026, internal combustion engine vehicles are expected to dominate the market, with EVs and PHEVs combined accounting for only 8% of new light-duty vehicle sales.

On the same day, the Biden administration announced a goal of making EVs, PHEVs, and FCEVs 50% of all light-duty vehicle sales in 2030. The policy is not legally enforceable, but intended to lead automobile manufacturers to this target with strengthened fuel economy regulations and measures to support the spread of EVs.

The automakers, UAW (United Auto Workers union), and others who participated in the signing ceremony of the Executive Order all agreed with Biden's policy and promised to cooperate. At the same time, there were requests for support for EV purchase incentives, charging network development, and EV production, arguing that such support was essential for the success of this plan.

The U.S. Congress is currently debating a USD 1 trillion infrastructure bill that includes a USD 7.5 billion investment in building an EV charging network, which was proposed on a bipartisan basis and has already been passed by the Senate. At the same time, however, the Democratic Party is preparing a "3.5 Trillion Dollar Package" that would invest USD 3.5 trillion over 10 years in a wide range of areas, including climate change and education assistance. The Democratic Party's executive branch and liberal lawmakers want to make this bill a priority, but centrist lawmakers are concerned about the USD 3.5 trillion budget size, and there is no consensus among Democrats. The realization of these two important bills is considered to be tumultuous.


2022 Ford F-150 Lightning Pro, pre-production model (Source: Ford) (In May 2021, President Biden visited the Dearborn plant, where the model is produced.)	North American version of the Toyota bZ4X Concept, to be launched in 2022 (Source: Toyota)

This report is for paid members only. Remaining 4 chapters remaining.
Free membership registration allows you to read the rest of the article for a limited time.

Click here for a free trial.