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The U.S. government has finalized regulations that rate electric vehicles lower than internal combustion engine vehicles when calculating car manufacturers’ average fuel efficiency. The calculation aims to further promote the sale of electric vehicles by making them significantly advantageous under the Corporate Average Fuel Economy (CAFE), the minimum fuel efficiency standard that U.S. car manufacturers must comply with. However, considering the backlash from the automotive industry, the government has stepped back from the standards proposed last year.
Bloomberg reported that the U.S. Department of Energy unveiled the final regulations on the 19th (local time), with the core being the change in the conversion factor applied when calculating the fuel efficiency of electric vehicles. Fuel efficiency is the distance a car can drive on a certain amount of fuel. In the U.S., the fuel efficiency of internal combustion engine vehicles is the distance that can be driven on 1 gallon of gas (approximately 3.8 liters) in miles (approximately 1.6 km). However, because electric vehicles do not use gasoline, their fuel efficiency cannot be calculated traditionally. Thus, undergoing a complex calculation process, their fuel efficiency is displayed at the same standard as that of internal combustion engine vehicles.
The Department of Energy’s newly proposed conversion factor for measuring the fuel efficiency of electric vehicles is 29 ㎾/h per gallon, 65% lower than the previous 82 ㎾/h per gallon, Bloomberg reported. In a draft last year, the Department of Energy had initially planned to lower the conversion factor to 23.2 ㎾/h per gallon but softened this considering the industry’s backlash. Also, the new standard will be gradually introduced by 2030 instead of being immediately implemented in 2027, a policy change.
Although the fuel efficiency calculation for electric vehicles is less relaxed than the initial draft, the industry still expects a significant increase in sales. Bloomberg predicted that by 2032, electric vehicles will account for two-thirds of the sales of new cars and light trucks under this regulation.
Car manufacturers must measure the average fuel efficiency of all vehicles they sell and meet the standard set by CAFE to avoid fines. They benefit from selling more electric vehicles, which are more fuel-efficient than internal combustion engine vehicles. Even if they sell many vehicles that lower the average fuel efficiency, such as pickup trucks or sports utility vehicles (SUVs), selling enough electric cars with high fuel efficiency can offset this impact.
The Biden administration is using various policy means to increase electric vehicle sales and revise the conversion factor. One of them is strengthening car emission standards, which are also expected to be relaxed compared to the original plan due to backlash from the automotive industry and labor unions. The Environmental Protection Agency (EPA) plans to announce the final regulations on the 19th.
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