Car Companies Try to Slow Down Electric Car Plans: It Might Work

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Car Companies Try to Slow Down Electric Car Plans: It Might Work

The automotive industry had high hopes that last year would mark a turning point similar to the color TV boom of the early 1970s, with electric vehicles (EVs) soaring in popularity and traditional internal combustion engine (ICE) vehicles starting to fade away. However, the transition to electric vehicles is happening more slowly and unpredictably than anticipated. As a result, car manufacturers are now tempering their forecasts for how quickly EVs will be adopted. They’ve managed to align their shareholders with this more conservative outlook and are actively encouraging dealers to temper consumer expectations. This strategy may benefit their financial statements in the short run.

Yet, there’s still a significant hurdle to overcome: convincing regulatory bodies that are advocating for reduced car emissions and a shift towards an electric-dominated future.

Efforts to sway these regulators are intensifying. A report by Automotive News reveals the extensive campaigns undertaken by automakers, suppliers, dealers, and the broader industry to moderate regulatory expectations. With the Biden administration on the verge of setting new emissions standards for the next decade, entities with significant interests in the fossil fuel sector are lobbying hard to ensure these regulations accommodate a substantial presence of ICE vehicles.

The Environmental Protection Agency (EPA) has introduced updated rules aiming to cut car emissions by 56% by 2032. This bold strategy starts with a target of reducing emissions by 18% by 2027, then shifts to a 9% reduction by 2031, and finally aims for an 11% reduction in 2032. The plan is to push the American auto market towards electric vehicles (EVs), with a forecast that 60% of new car sales will be EVs by 2030 and 67% by 2032. However, car manufacturers are not fully on board with this aggressive plan.

According to Automotive News, the industry would prefer a less severe path, dubbed Alternative 3. This method would achieve the same overall reduction in emissions but would do so more gradually, starting with an 11% reduction in 2027 and reaching a 17% reduction by 2032. Despite leaning towards this alternative, automakers are still worried about the practicality of making such swift changes.

Even companies like Kia, which are currently ahead in the EV market, are doubtful. Kia has shared its concerns with the EPA, arguing that hitting a 60% EV market share by 2030 seems far-fetched due to hurdles such as the high costs of EVs, the need for more charging stations, and the scarcity of essential minerals for EV batteries. These points underscore the industry’s broader worries about moving to electric vehicles as quickly as the EPA suggests, highlighting the challenge of aligning environmental goals with the realities of technology, economics, and infrastructure.

The Environmental Protection Agency (EPA) is introducing new rules aiming to cut car emissions by 56% by 2032, with steps including an 18% reduction by 2027, a 9% cut by 2031, and an 11% decrease in 2032. This strategy is designed to encourage a shift towards electric vehicles (EVs), anticipating that 60% of new cars sold will be EVs by 2030, reaching 67% by 2032. Despite this, the auto industry has not embraced these ambitious targets.

A preferred, more moderate option, known as Alternative 3, has been outlined by Automotive News. This alternative seeks the same overall reduction by 2032 but suggests a smoother transition, starting with an 11% reduction in 2027 and ending with a 17% cut. Yet, concerns about meeting these aggressive milestones remain, even among EV leaders like Kia. Kia has criticized the EPA’s projection of a 60% EV market share by 2030 as overly optimistic, citing issues like EV affordability, the need for more charging stations, and the scarcity of essential minerals for battery production.

Kia’s critique of the EPA’s ambitious targets, preferring a more gradual approach, reflects a broader industry hesitation. This hesitancy stems from challenges in transitioning to electric vehicles, balancing environmental goals with practical and financial realities. However, the industry’s reluctance to adopt stricter emission standards also points to a focus on profit, especially from high-selling internal combustion vehicles. Despite this resistance, the urgency of environmental concerns and competition from EV innovators suggests that delaying action may not be a viable solution.

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