Ford, GM, Stellantis to benefit from Biden emissions rules

President Joe Biden speaks at the United Auto Workers political convention at the Marriott Marquis in Washington, D.C., Jan. 24, 2024.

Saul Loeb | AFP | Getty Images

DETROIT — The Biden administration’s decision to ease its timeline for all-electric vehicle adoption and give automakers more ways to meet new tailpipe emissions standards is expected to be a win for legacy automakers.

The new Environmental Protection Agency rules released Wednesday aim to cut tailpipe emissions by 49% between model years 2027 and 2032. The EPA set a target for EVs to make up at least 35% of new vehicle sales by 2032.

The standards are less ambitious than proposed rules released last year, which targeted a 56% reduction in emissions by 2032 and called for EVs to represent 67% of new vehicles by that year.

The lower expectation for EV adoption comes amid slower-than-expected sales of the vehicles, which can cost tens of thousands of dollars more than their traditional gas counterparts.

The EPA’s new strategy for cutting tailpipe emissions doesn’t focus only on EVs. It took into account more efficient gasoline engines, hybrids and plug-in hybrid electric vehicles.

The EPA’s percentage targets for EV adoption are not mandates but expectations for how automakers could meet the emissions regulations. The target range for the share of EV sales in the market in 2032 is between 35% and 56%.

The EPA said the standards will avoid more than 7 billion tons of carbon emissions and provide nearly $100 billion of annual net benefits to society. It said those include $13 billion of annual public health benefits due to improved air quality, along with $62 billion in reduced annual fuel costs and maintenance and repair costs for drivers.

Here are some key takeaways about what the new guidelines mean for automakers, investors and the environment.

A win for Detroit

President Joe Biden, with General Motors CEO Mary Barra, looks at a Chevrolet Silverado electric vehicle as he tours the 2022 North American International Auto Show at Huntington Place Convention Center in Detroit, Michigan, on Sept. 14, 2022. Biden is visiting the auto show to highlight electric vehicle manufacturing.

Mandel Ngan | Afp | Getty Images

Tesla, some green groups unhappy

Political implications

Not over yet

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