In August 2018, the U.S. Environmental Protection Agency (EPA) took the first steps in rolling back the Corporate Average Fuel Economy (CAFE) and light-duty vehicle greenhouse gas (GHG) emissions standards. The rollback has raised questions about the impact this will have on the future growth and production of plug-in electric vehicles (PEVs).
In an article for GreenBiz
, Raquel Soat, research analyst at Navigant Research, said, “The proposed changes would hold CAFE and GHG standards at current 2020 targets of about 35 miles per gallon (mpg), instead of the approximately 54.5 mpg 2026 standard in place.”
The administration and EPA cite cost savings for consumers as the main reason they intend to roll back fuel economy and GHG standards. The current standards incentivize PEV production due to their high miles-per-gallon gasoline equivalent (MPGe).
According to Soat, “The proposed changes certainly would influence PEV sales, but they would not signal the end of the market…. The growth rate for light duty PEV sales and population is expected to continue increasing across the forecast period.”
Soat added that while the U.S. is a sizable market for vehicle sales, manufacturers will continue to make vehicles that meet standards elsewhere in the world. Some models that are big sellers in the U.S. market, such as pick-up trucks, may only meet the U.S. fuel efficiency standards, but automakers will continue to build models that meet the high-efficiency standards to sell globally.