EPA Raises Fuel Efficiency Standard for 2026 Vehicle Models

Automakers must reduce emissions starting with model year 2023 by 5-10% each year.

December 21, 2021

Cars in Parking Lot

WASHINGTON—The U.S. Environmental Protection Agency (EPA) yesterday released final standards setting a new fuel efficiency standard for passenger cars and light-duty trucks, reports the Wall Street Journal.

Auto manufacturers must meet a fleetwide average of 55 miles a gallon for cars and light trucks by model year 2026, up from the 43-miles-per-gallon standard set by the Trump Administration for that year. Vehicles that are model years 2023 to 2026 must reduce their greenhouse gas emissions between 5% and 10% each year.

According to the EPA, the tougher rules will save U.S. drivers between $210 billion and $420 billion in fuel costs through 2050. However, the new rules limit automakers’ flexibility in how they account for their fleets’ emissions. So, although the rules may reduce pollution more quickly, they also make it harder for auto manufacturers to comply, says the Journal.

EPA and backers of the plan say it will improve air quality as it cuts the amount of pollution cars pump into the atmosphere, reduce climate pollution and save Americans money at the pump as cars' fuel efficiency improves.

The new standards could help boost demand for zero-emission electric vehicles and come shortly after the Biden Administration released details of its plan to build out an electric vehicle charging infrastructure.

With the stepped-up greenhouse gas emissions requirements phasing in over four years, the agency projects that sales of EVs and plug-in hybrid vehicles will increase from about 7% market share in model year 2023 to about 17% in model year 2026. “These increasing levels of EVs will position the United States to achieve aggressive GHG emissions reductions from transportation over the long term,” EPA said in a news release.

Shortly after election, President Biden unveiled an electric car plan that said half of all new cars sold in the United States will be electric by 2030. But in order for that plan to become a reality, energy and auto experts say the U.S. needs at least five to 10 times its current amount of EV chargers to bring the plan to fruition.

EV sales are on track to account for 3% to 4% of sales this year, according to analysts at Deutsche Bank. However, some consumers are hesitant to purchase an EV because they fear they’ll run out of power without a charging station nearby. It also costs more to take an EV on a road trip than to drive a gas-powered vehicle, though EV owners save when driving locally and charging at home.

A recent Convenience Matters podcast episode discusses how EVs are the future, and another episode explains how convenience retailers can attract and retain EV customers. A free NACS webinar helps retailers understand how EVs and environmentally conscious consumers will affect your business.

Read more about electricity demand charges and what they mean for retailers’ ability to turn a profit from EV charging in the September issue of NACS Magazine.

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