Policy Backgrounders

EPA Clean Vehicle Standards Final Rule

March 28, 2024

Trusted Insights for What’s Ahead™

The Environmental Protection Agency (EPA) issued a final rule on tailpipe emissions from light-duty vehicles (cars and light trucks) that is somewhat weaker than the draft rule EPA proposed last year. The agency responded to criticism from both automakers and the United Auto Workers (UAW) union about an overly ambitious plan for a transition to electric vehicles (EVs) at a time when consumer demand for them is slowing.

• The final rule pushes out automakers’ effective requirements for EV sales and also relies more heavily on plug-in hybrid vehicles – a major change from last year’s draft and a win for automakers who complained about the draft’s stringent rules in the face of increasing consumer reluctance to purchase EVs.
• Nevertheless, the rule contemplates a significant shift towards EV sales from today’s market; sales of gas-powered vehicles will fall, and emissions from new gas-powered vehicles will have to fall dramatically.
• An important factor will be California’s tougher standards requiring all new cars to be zero-emission vehicles by 2035; EPA is expected to rule on California’s request shortly.
• Litigation against the final rule is likely, but business will likely be divided; the trade association representing major US automakers cautiously welcomed the final rule.