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Is the auto industry ready for new proposed fuel efficiency standards?


In fewer than 10 years, American roadways, or at least the cars on them, may look very different. The Environmental Protection Agency is expected to announce new auto emission standards later today. They're aimed at dramatically increasing the number of electric vehicles sold in the U.S. Last year, EVs made up less than 6% of vehicle sales. These new standards could push that to as high as 67% by 2032. But some carmakers say the industry just isn't ready. Michelle Krebs joins me now. She's the executive analyst at Cox Automotive. Good morning.

MICHELLE KREBS: Good morning.

FADEL: OK. So first, what would these rules actually do?

KREBS: These rules, they are the strictest limits ever on auto emissions. And the whole idea behind it is to speed up our transition to EVs, which don't have emissions. There was a voluntary goal to get to 50% by 2030. That has been up to 67%...

FADEL: Yeah.

KREBS: ...By 2032. Very ambitious goals.

FADEL: Realistic? Is that timeline realistic, especially from the auto industry's perspective?

KREBS: Well, and not just the auto industry, in part. It's also the consumer part.

FADEL: Yeah.

KREBS: It's enormously ambitious. You know, we've had previous mandates where, like, higher fuel economy standards and emission standards. But they were all on gasoline engines, required some tweaking. This reinvents the vehicle. It reinvents how consumers interact with their vehicle. It reimagines the entire industrial base. So this is a massive change.

FADEL: What would you say are the biggest challenges? Is it making the vehicles, getting people to purchase them? I mean, what are the challenges to get to that number?

KREBS: I think it all lies with the consumer. Indeed, EVs are the fastest-selling vehicle category. Last year, they were up 60% over the previous year. We just put out some new numbers that in the first quarter, the U.S. industry sold 258,000. That's the highest we've ever seen. And we anticipate a million. But we sell 14, 15, 16 million vehicles per year. It's - so it's only 7% of all vehicle sales. And this requires a change in consumer behavior. You know, you don't just pull into a gas station and top off your tank. The other big obstacle is they cost more.

FADEL: Yeah.

KREBS: The average cost of an EV is $58,000, versus a still-high $48,000 for a gas-engine vehicle.

FADEL: Wow. So that's hard for people. Already, vehicles are so expensive right now. And a lot of people plan to drive their car until the wheels fall off. But if the rules change, maybe that's not an option for them.

KREBS: Well, the EPA is arguing that these standards will actually save consumers money. They're saying, you know, more than $9,000 over eight years by not buying gas. EVs, theoretically, have less maintenance because they have less parts, and so they'll save in repair bills. But I don't think, really, consumers look at it that way.

FADEL: Does this impact auto workers?

KREBS: Yes. We are seeing automakers build new plants to assemble these vehicles and to build batteries. And it's a mixed bag. There will be new jobs created, but we could lose factory jobs because EVs require fewer people to assemble them.

FADEL: Michelle Krebs is the executive analyst with Cox Automotive. Thank you so much for your time.

KREBS: Thank you.

(SOUNDBITE OF B FLEISCHMANN'S "COMPOSURE") Transcript provided by NPR, Copyright NPR.

Leila Fadel
Leila Fadel is a host of Morning Edition, as well as NPR's morning news podcast Up First.
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