Last week, the Biden administration announced ambitious new proposed vehicle emissions standards that are expected to result in a huge increase in the number of all-electric cars sold in the US. Environmental Protection Agency (EPA) administrator Michael S Regan called the new proposals “the most ambitious pollution standards ever for cars and trucks”.
Although the new rules would not force manufacturers to sell a certain number or percentage of electric cars by a certain year, the new limits on emissions (an industry-wide average target of 82g of carbon dioxide created per mile travelled) are expected to lead to light-duty all-electric cars achieving up to a 67% share of new sales by 2032. Government officials estimate this would mean a 60% share by 2030.
Currently, the US is a long way from being able to compete with China and many European countries when it comes to its share of new battery electric vehicle (BEV) sales. Data published in March by the European Automobile Manufacturers’ Association shows that BEVs represented an average of 12.1% of new car sales in Europe last year, skewed by high proportions in countries like Norway (78%) and Sweden (33%). In China, BEVs accounted for 22% of new sales in 2022, according to news site Inside EVs. The US lags, with BEVs making up just 5.6% of total light-vehicle sales last year.
The EU and China are currently neck-and-neck in the lead with an estimated 67% share of BEV and plug-in hybrid electric vehicle (PHEV) new car sales by 2030, according to estimates from Citi’s January 2023 State of Global Vehicle Adoption report.
BEVs projected share of total new car sales by 2030 in Europe (the EU plus the European Free Trade Association and the UK), China, and the US, would be 71%, 59% and 45%, respectively, according to November 2022 analysis by the European Automobile Manufacturers’ Association and S&P Global Mobility.
While projections are constantly changing – electric vehicle (EV) sales in China are already surpassing expectations this year, with recent estimates showing they could reach a market share of 35% by the end of the year – projections from the European Automobile Manufacturers’ Association and S&P Global Mobility suggest that Biden’s proposed rules, if finalised, would make the US a serious competitor in the global EV race .
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Estimates that two-thirds of new cars sold in the US could be all-electric within a decade represents a significant increase on Biden’s 2021 goal that 50% of all new cars be zero-emissions vehicles by 2030. However, the new proposed standards are less stringent than California’s mandate that 100% of new vehicles sold must be zero emissions by 2035.
Given that hitting Biden’s new targets will require a complete overhaul of the US automotive industry, several challenges will have to be overcome. For example, questions remain over whether consumer demand will match supply, given that EVs' sticker prices are currently more expensive than petrol cars. In addition, automotive industry insiders have expressed concern that there is not sufficient supply of charging infrastructure as well as raw materials like lithium for batteries to support such a rapid market shift. The US could also work to reduce the total number of cars on its roads, which are responsible for a significantly greater number of road fatalities each year than in other developed countries.