EPA Proposes Drastic Emissions Cuts Through 2032, Aims for EVs to Make Up Two-Thirds of New Vehicle Sales

A seismic shift will need to happen in order to meet these goals

  • The Environmental Protection Agency prosposed sweeping cuts to new car and truck emissions through 2032 on Wednesday.
  • If finalized, these new standards would cut pollution by 13% and projected fleet average emissions by 56% from the current 2026 requirements.
    • These proposed 2027-2032 cuts would cut nearly 10 billion tons of CO2 emissions through 2055 — more than double the United States’ total CO2 emissions last year.
  • The EPA estimates benefits will exceed costs by at least $1 trillion over the next three decades and reduce oil imports by approximately 20 billion barrels.
  • Stricter standards are also in play for medium-duty and heavy-duty vehicles through 2032, though the rules have not yet been locked in.

The Biden administration is working to finalize new, stricter emissions rules by early next year.

On Wednesday, the Environmental Protection Agency (EPA) proposed sweeping emissions reductions in light-duty and medium-duty vehicles between 2027 and 2032. If these new rules come into play, the agency says the new standards could result in EVs comprising two-thirds of all new vehicle sales in the U.S. within the next decade. The move aims to not only curb CO2 emissions and improve air quality in the coming years, but also reduce reliance on 20 billion barrels of imports.

This latest proposal is the most aggressive plan to-date aimed at curbing emissions. Some of the highlight figures include a 13% cut in average pollution from 2026 requirements, as well as a 56% reduction in fleet average emissions. While the Biden administration is not outright proposing a gasoline sales ban — as some states have — the EPA projects that automakers could shift 67% of their new light-duty vehicle sales to electric vehicles by 2032 to meet the stricter rules. Wednesday’s move surpasses Biden’s 2021 goal seeking half of new vehicle sales be EVs by 2030.

Today’s announcement covers the broad ambitions of the EPA’s plan, but it’s not likely the agency will finalize this proposal until early 2024.

EPA argues these rules will bring a net economic benefit around $1 trillion through 2055

Overall, the agency argues the benefits of this more aggressive program will outweigh its implementation costs by $850 billion to $1.6 trillion between 2027 and 2055. Reuters reports complying with the proposal will cost roughly $1,200 per vehicle per manufacturer by 2032. However, the EPA also predicts the average light-duty vehicle owner will save ten times that amount ($12,000) in fuel costs, maintenance and repairs over that vehicle’s lifetime, compared to a vehicle that is not subject to the newly proposed standards.

The EPA’s proposal also once again tackles heavy-duty truck standards. While the agency finalized new rules in December 2022, this represents “phase 3” of its Clean Trucks Plan. This component aims to reduce CO2 emissions by 1.8 billion tons by 2055 (on top of the 7.3 billion-ton reduction for light-duty vehicles) and projects that half of “vocational vehicles” like buses and garbage trucks will be electric by model year 2032.

Additionally, 35% of short-haul freight tractors and a quarter of long-haul freight trucks could also be EVs within the next decade.

Whether these rules are finalized obviously remains to be seen, but some stakeholders appropriately point to the support structure for such a huge EV shift as a crucial part of reaching the proposed requirements. Reuters cites Alliance for Automotive Innovation CEO John Bozzella, which represents several large automakers: “…charging infrastructure, supply chains, grid resiliency, the availability of low carbon fuels and critical minerals will determine whether EPA standards at these levels are achievable.”