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Biden administration proposes new mileage standard as Toyota, Ford and other automakers agree on EV goal

The Biden administration wants automakers to raise gas mileage and cut tailpipe pollution between now and model year 2026, and it has won a voluntary commitment from the industry that electric vehicles comprise up to half of U.S. sales by the end of the decade.

The moves are big steps toward President Joe Biden’s pledge to cut emissions and battle climate change as he pushes to shift the nation away from internal combustion engines to battery-powered vehicles.

The administration on Thursday announced there would be new mileage and anti-pollution standards from the Environmental Protection Agency and Transportation Department.

In addition, it said the auto industry had agreed to a goal that 40% to 50% of new vehicle sales be electric by 2030.

Both the regulatory standards and the voluntary target will be included in an executive order that Biden plans to sign later Thursday.

The Alliance for Automotive Innovation, a large industry trade group, said in a statement it will work with the administration to reach zero carbon emissions from transportation.

But it said the best opportunity for environmental benefits will come after 2026 as more electric vehicles are sold.

The industry, it said, will invest more than $300 billion in electrification by 2025, producing 130 electric models by 2026. Only about 50 are available today.

The regulations, it said, must strike a balance between pollution cuts and encouraging added investment in electric vehicles.

In the infrastructure bill awaiting passage in the Senate, there is $7.5 billion allocated for grants to build charging stations, about half of what Biden originally proposed.

He wanted $15 billion for 500,000 stations, plus money for tax credits and rebates to entice people into buying electric vehicles.

Several automakers already have announced similar electric vehicle sales goals to those in the deal with the government.

Last week, for instance, Ford’s CEO said his company expects 40% of its global sales to be fully electric by 2030. General Motors has said it aspires to sell only electric passenger vehicles by 2035. Stellantis, formerly Fiat Chrysler, also pledged over 40% electrified vehicles by 2030.

Automakers said in statements they would work toward the 40% to 50% electric vehicle sales goal.

“You can count on Toyota to do our part,” said Ted Ogawa, the company’s North America CEO, adding that the goal is great for the environment and Toyota employees.

General Motors, Stellantis and Ford said in a joint statement that their recent electric-vehicle commitments show they want to lead the U.S. in the transition away from combustion vehicles.

www.marketwatch.com