00:00The U.S. government announces higher gas mileage requirements under the latest federal rules
00:07issued in June.
00:09The National Highway Traffic Safety Administration said it would like to hike corporate average
00:14fuel economy requirements to about 50.4 miles per gallon by 2031.
00:20That's up from 39.1 miles per gallon currently.
00:24The new fuel mileage requirement is barely above the 49 miles per gallon it previously
00:29required for 2026 and is among several regulations the administration is using to push carmakers
00:37to focus on producing EVs.
00:39In April, the Environmental Protection Agency issued strict new limits on tailpipe emissions
00:45to ensure the majority of new passenger cars and light trucks sold in the United States
00:50are either all-electric or hybrids in the next eight years.
00:55Joining us now to discuss is former EPA Administrator Andrew Wheeler.
00:59Andrew, thank you so much for coming on today.
01:02We appreciate having you.
01:04It's great to be on.
01:05Thank you for having me.
01:06So, the White House has stressed that its desire to push Americans towards EVs and it's
01:11instituted some regulatory goals to help aim that progress.
01:14Recently, there's been a little bit of some blowback from customers and even auto manufacturers.
01:20Can you explain this for us?
01:23Sure.
01:23So, this is the third regulation as part of the EV or auto cafe standards in the last
01:31few months from three different agencies, EPA, Department of Energy, and now we're hearing
01:36from the Department of Transportation.
01:38All of this taken together, though, is pushing EVs on the American consumer.
01:44And I believe the EPA's estimate of around 67 percent, two-thirds, will have to be EVs
01:51or hybrids by 2032 is still the overall number that will have to be met.
01:59What are some of the benefits that it could have to the environment?
02:01Well, there could be a lot of benefits and I'm a supporter of EVs, but the administration,
02:07they haven't explained how we're going to get there.
02:10And there's been a number of officials from the administration who've testified in Congress
02:14and they haven't been able to explain how we're going to get there, how we're going
02:17to be able to generate the energy that we need.
02:20So let's talk a little bit about gas-powered cars, light trucks.
02:23The original goals put forth by the National Highway Traffic Safety Administration were
02:27to be at 55 miles per gallon by 2026.
02:31They recently revised those goals down to about 49 miles per gallon.
02:35Do you know why the change?
02:38I don't know for sure the change.
02:39The auto companies have publicly said that they cannot go with the more stringent requirements.
02:48And what happens when you have the more stringent requirements under the DOT regs is if you
02:52don't meet those, then the auto companies have to pay very large fines or penalties
02:58to the federal government.
02:59And we're talking billions of dollars.
03:01So what the auto industry said was if you're going to stick with these more stringent requirements,
03:09we're going to be using all of our available cash to pay these penalties instead of investing
03:13in new EV cars and new EV technologies.
03:17So it was a plea that they made to the administration publicly through a number of media sources
03:23and interviews where they said that their money would be better spent investing in new
03:27technologies than paying penalties.
03:29But you also have to remember, if they're paying those penalties, so it was a question
03:34of the penalty aspect.
03:36And Detroit successfully argued to this administration that instead of paying the penalties, lower
03:42the standard and we use the funds in order to innovate more.
03:47How do you think that the consumers might view these new standards?
03:51Well, I mean, if somebody says, if you ask somebody in a poll walking down the street,
04:00do you think cars should be cleaner than they are now?
04:04Everybody's going to say yes.
04:05I'm going to say yes.
04:06Everybody's going to say yes.
04:08But when they go to buy and purchase the vehicles, that's where they're making their decision.
04:13And that's actually the information that basically voting by purchase.
04:19And last year, one million EV cars were sold, highest level ever.
04:25But that's one million out of 16 million EV cars stay on a lot on the lots.
04:32On average, 130 days, I believe, as of last year to two gas powered cars staying on lots
04:3870 to 80 days.
04:40So American consumer is not purchasing the EV cars as quickly as the Biden administration
04:46would like them to.
04:48The NHTSA regulation for the 50 miles per gallon, that's the fleet average.
04:53That means that if an auto company is selling regular gas powered cars and EVs, they're
04:59going to price the EVs lower and they're going to raise the price of the gasoline
05:03powered cars in order to hit that average.
05:06This is not that every single car has to be a 50 miles per gallon.
05:10This is an average for all the cars that each company sells.
05:14And what Detroit does, what the auto companies do, is they raise and lower the prices to
05:19incentivize purchasing an EV or to disincentivize purchasing a gas powered car so that fewer
05:27of those will be sold.
05:28So do you think then we've seen maybe the end of these mile per gallon changes?
05:33And then also, do you think there's a future for gasoline powered vehicles in the U.S.?
05:38I think there's absolutely a future because we are going to be able to generate the electricity
05:43that we need for two thirds of our fleet to be EVs by 2032.
05:48So I would say we're going to be needing gasoline powered cars for at least another generation
05:53until either the technology improves or the infrastructure is greatly expanded.
05:59All right.
06:00Andrew Wheeler, thank you so much for coming on, for sharing your expertise.
06:03Absolutely.
06:04Thank you for having me.
Comments