2023 is a fork in the road for bold action to accelerate clean transportation
President Biden’s recently released blueprint to decarbonize the United States’ transportation sector was both prescient and potentially a green light to his administration’s largest remaining opportunity to tackle climate change by the end of his term.
While the Biden administration’s policy wins in the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) put electric vehicles (EVs) in the fast lane, transportation electrification could be waylaid by a change in administration or the eventual expiration of federal incentives and tax credits — risking Biden’s climate goals and a dangerous climate future.
Transportation is the single largest source of U.S. greenhouse gas emissions in the United States. The same week the administration released their blueprint, a Rhodium Group report revealed greenhouse gas emissions for the transportation sector and national economy grew 1.3 percent in 2022. This upward trend further pushed the country off course from Biden’s goal of reducing emissions 50-52 percent below 2005 levels by 2030.
Going further, faster with new U.S. Environmental Protection Agency (EPA) regulations in 2023 would backstop the IRA’s electrification potential to ensure America leads the global EV race, cuts greenhouse gas emissions on the pace needed for a safe climate future and protects consumers from inflation.
One of Biden’s best opportunities to mitigate the accelerating effects of climate change will come this March when EPA proposes new greenhouse gas standards for light- and heavy-duty vehicles. An ambitious EPA proposal will likely be the administration’s greatest chance to lock in rapid decarbonization gains before the end of his term.
But how far should the EPA go? The good news is that an ambitious set of EPA standards will be made more realistic by a set of converging pillars.
First, the IRA includes about $370 billion in climate investments to decarbonize the power and transportation sectors. The law offers up to $7,500 to buy new EVs and up to $4,000 for used EVs, along with tax credits of up to $40,000 for commercial zero-emission vehicles (ZEVs) and $100,000 for truck charging stations. An additional $1 billion provides funding for zero-emission school buses, heavy-duty trucks and public transit buses. Finally, billions of dollars will be invested in manufacturing loans and investment in EVs and domestic fuel cell production.
A new study by the International Council of Clean Transportation (ICCT) and Energy Innovation (EI) modeled how the IRA will drive new EV sales, finding that IRA incentives mean 48 to 61 percent of total new, light duty vehicles sales would be EVs by 2030. The sales of new heavier commercial EVs, like tractor trailers, school buses, and delivery vans, could likewise rise dramatically to represent 38 to 48 percent of new vehicle sales.
Second, the private sector has announced a record $1.2 trillion in EV investment by 2030 — this amount has virtually doubled in just the past year, following global EV sales. Beyond investments, manufacturers have publicly committed to timeframes for fully transitioning to EVs. Volvo has announced it will sell only electric cars by 2030; GM by 2035. Ford, Volkswagen, and Stellantis have committed to selling 50 percent EVs in the U.S. by 2030.
Manufacturers are also committing to manufacturing heavy-duty electric vehicles. Navistar and Volvo’s executives expect 50 percent heavy-duty ZEV sales by 2030 and 100 percent EV or fossil free by 2040.
Third, market forces are already driving consumer EV adoption: 2022 EV sales are expected to account for 14 percent of new vehicle sales globally and 7 percent of new vehicle sales in the U.S. — which is considered the “tipping point” to mass adoption. EVs will also soon reach cost parity with gasoline and diesel-fueled passenger cars and trucks. The ICCT-EI study shows that passenger EVs will be cheaper than gasoline vehicles before 2030, in most cases. When the savings from charging instead of gassing up are factored in, EVs will be cheaper to own by 2025. Among heavy-duty commercial vehicles, electric trucks and buses will be cheaper to operate than their diesel counterparts between 2024 and 2030 depending on the vehicle segment.
Fourth, states are accelerating EV deployment. California now requires 68 percent of new car sales and 45 percent of new truck sales to be zero emissions by 2030. California’s new emissions clean car and truck rules have been adopted by other states, amplifying their impact for tens of millions of additional drivers. This means the California standards requiring much more stringent greenhouse gas standards will cover around 40 percent of the light-duty and 36 percent heavy-duty vehicle markets.
Given the IRA and IIJA, the industry’s staggering investment plans, the exponential growth of EV sales, and California’s clean emissions roadmap, bold action by the EPA in 2023 is warranted and appropriate.
An ambitious national standard that helps the country transition to zero emission vehicles and trucks would save more than 100,000 lives, especially in communities of color and low-income communities that are disproportionally impacted by air pollution and climate change. It will strengthen our economy by providing certainty to automakers and a level playing field for the massive transformation of the auto industry and its supply chains.
History will remember this administration for its climate actions, and 2023 can be a turning point — if the EPA acts decisively.
Margo Oge is the chair of the Board of the International Council on Clean Transportation (ICCT) and the author of “Driving the Future: Combating Climate Change With Cleaner, Smarter Cars.” Oge was the director of the Environmental Protection Agency’s office of transportation and air quality from 1994 to 2012.
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