EV sales would have to reach almost unimaginable levels to hit Biden target

If historically tough fuel standards proposed Wednesday by the Biden administration are adopted and enforced, it could change Detroit and US auto manufacturing forever.

It's still a big if.

Biden's Environmental Protection Agency rolled out tailpipe emission rules so strict that the only way automakers would likely be able to hit the target is to ramp up sales of electric vehicles to almost unimaginable levels of more than 60% of all new cars sold by the 2030s.

Last year, a good year for EVs, sales were slightly under 6% of all new vehicles. And while they're up from that so far this year, it's still a far cry from 60%. That said, the U.S. auto market is changing dramatically already, with dozens of new EV models headed to showrooms − and the Biden administration says it has every reason to be bullish about technologies it believes will protect public health, battle climate change and reduce reliance on foreign oil.

"I believe we can (hit those goals) and I believe that because we’re following the market trends," EPA Administrator Michael Regan said in announcing the proposal Wednesday. "This is the future."

But is it? Here's a look at just some of the factors involved:

Everything is pointing toward growth in EV production

There's no question automakers and suppliers are embracing EVs. General Motors and Ford are investing in new models and battery plants, and there's hardly a manufacturer out there not chasing electrification, with Tesla having seen enormous success.

The number of public electric chargers has hit 130,000, a 40% increase in three years, and private sector investment in the industry has topped $120 billion. By 2030, there should be the capacity to build enough batteries to supply at least 10 million EVs a year, the EPA says, and that's more than enough to hit the target.

Climate change, public health demand it

The other thing the Biden administration is taking into account is climate change and the need to do something about it as well as address respiratory illnesses and other public health concerns exacerbated by pollution, especially in urban areas.

These standards, the EPA says, would do both at what it considers a reasonable cost to consumers and industry, since the technology to hit the standards − which, for instance, would require the fleetwide target for light-duty cars and trucks in model year 2026 of 186 grams of carbon dioxide emitted per mile to be reduced by more than half, to 82 grams per mile fleetwide, by 2032 − is considered available, even if it needs to be scaled up dramatically. That's considered a lofty goal, but there are some environmentalists who don't think it goes far enough.

A lot could still go wrong on the way to 60% sales

But before anyone thinks getting to the Biden administration's proposed target of EVs making up 60% of new vehicle sales by 2030 and all the way up to 67% of sales by 2032 would be easy, there is a lot more to consider. Those publicly available chargers that are out there aren't enough to handle the 3 million EVs currently on the road in the U.S. And while initiatives like those by Walmart and 7-Eleven to add them could change that considerably, there are still risks.

Many people aren't yet sold on EVs, polls say, even as battery technology and range have improved dramatically. In order to hit a goal like the Biden administration's it's going to require a lot of coordination between investment in chargers, incentives for consumers to buy and convincing drivers EVs are worth the additional upfront cost (which you can argue they are because they cost less in fuel and maintenance). And under the terms of legislation passed last year, fewer customers are likely to get incentives and those incentives are going to be available, when the list is complete, on fewer models.

There's little downside to being aggressive

The early indication from Detroit's automakers and the Alliance for Automotive Innovation, whose members include most of the world's biggest automakers, was that it's too early to say whether 67% is too aggressive or doable, but the Alliance's head, John Bozzella, did note that less than two years ago Biden was talking about 50% by 2030, not this.

But the automakers' desire for more readily achievable (and perhaps realistic) targets aside, Biden and his administration are facing clear concerns that not enough is being done to fight climate change, and the transportation sector pumps more greenhouse gas into the atmosphere than any other in the U.S. Therefore, anything that pushes the industry and investors into commitments that bind them to an electric future − even if standards are later revised, as they were under former President Donald Trump − would be considered a step forward.

It may help Biden politically headed into '24

On that last point, adopting more aggressive standards that could lead to increased EV sales might be especially important if Biden, as expected, runs again. Anything he can do to whip up environmentalists to his cause could help in key states, given his underwater approval levels. And while there are concerns that some key constituencies, like auto workers, might be harmed by the adoption of EVs since they generally require fewer workers to assemble, you can bet Biden is going to urge auto companies to make domestic products with union labor, something no Republican is likely to encourage.

The GOP is going to continue to argue that EVs are too expensive and that Biden is trying to force them on Americans, but expect him to say that the market is already moving toward electrification and either the U.S. can take a commanding position in that future or cede it to manufacturers in other nations.

We're a long way from knowing what will happen

Certainly, the standard proposed Wednesday by the EPA laid down a marker that was a dramatic one and represented a change in more ways than one. (For instance, the EPA didn't even try to put estimate the emission reductions in terms of an increase in gas mileage, as it has done in the past.)

But there's a lot that still has to happen and a lot more that is unknown. The EPA won't finalize its rules until next year and has offered a less stringent set of standards for consideration that could be adopted after a comment period. And it's unclear how the EPA's greenhouse gas program will be coordinated with fuel emission standards to be adopted by the Transportation Department.

Then there is the fact that the Biden administration's rules wouldn't go into effect until at least 2027, since there are already rules in place for cars and trucks between now and then. That three years, the EPA says, should give automakers and policymakers time to figure out how to hit the new standards, whether that's by selling more EVs or coming up with ways to make gasoline-powered vehicles emit fewer pollutants (or both, which will be the case).

Whether that's enough time remains to be seen but it's hard to imagine that given all that's going on in the industry now, EV sales won't have grown substantially. If that's the case, Biden and the EPA could well be right and we'll be looking at an auto world ready for such a big transformation.

We'll see.

Contact Todd Spangler: tspangler@freepress.com. Follow him on Twitter@tsspangler.