US President Donald Trump’s administration said on Wednesday it is rescinding a rule that incentivised carmakers to produce electric vehicles (EVs) to meet fuel economy requirements by overstating energy savings.
Environmentalists have long criticised the energy department rules for assigning unrealistically high fuel-economy values to electric vehicles, which are used to calculate fleetwide averages under federal corporate average fuel economy rules.
The energy department (DOE) said after an appeals court decision in September it will remove the provision known as the fuel content factor from its calculations, and plans to propose additional revisions.
Fuel content factor
The DOE said it has concluded the fuel content factor is “unlawful” and it is issuing a rule to immediately remove it from fuel economy calculations.
Former president Joe Biden’s administration initially proposed eliminating the fuel content factor from the calculations, effective in 2027, which would have lowered the compliance value of electric vehicles by about 70%.
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Under pressure from carmakers, the DOE in 2024 opted to phase it out through to 2030. Carmakers noted previously the fuel content factor results in an assessed fuel economy roughly seven times higher than would be calculated based on only the DOE’s gasoline-equivalent energy content of electricity.
Fuel economy values
Environmental groups during the Biden administration had urged the revision to the EV mileage calculation, arguing “excessively high imputed fuel economy values for EVs means that a relatively small number of EVs will mathematically guarantee compliance without meaningful improvements in the real-world average fuel economy of carmakers’ overall fleets”.
In December the Trump administration proposed slashing fuel economy standards Biden had finalised in 2024 in a push to make it easier for carmakers to sell petrol-powered cars.
The National Highway Traffic Safety Administration (NHTSA) proposed significantly reducing the fuel economy requirements from model years 2022 to 2031, requiring 6.81l/100km by 2031, down from 4.66l/100km.
Last year Trump signed legislation that ended fuel economy penalties for carmakers, and the NHTSA said they faced no fines dating back to the 2022 model year. However, carmakers are worried a future administration will reinstate the penalties.
Trump has taken steps to disincentivise EV purchases and production and make it easier to produce petrol-powered models.
Reuters
