Have we jumped the gun on electric cars?

Demand for the Ford F-150 Lightning has slowed in the USA

The United States is set to hit the brakes on future emissions regulations as local automakers complain the switch to electric cars is happening quicker than they can keep up.

Just 7.6 per cent of all new vehicles sold in the USA in 2023 were battery electric, but the American Environment Protection Agency (EPA) warned last year that number needed to increase to 60 per cent by 2030 – more than a seven-fold increase in just six years. Proposed regulatory changes endorsed by the Biden Administration also stipulated US tailpipe emissions to reduce 56 per cent by 2032, with electric vehicles to comprise 67 per cent of new vehicle production by 2032.

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The tough new rules, tabled for implementation from 2027, would represent the strictest-ever regulations on tailpipe emissions seen in the US. However, it’s a target that’s “neither reasonable nor achievable”, said last year the Alliance for Automotive Innovation, a group representing 42 US car manufacturers including GM, Ford, Stellantis, Toyota and Volkswagen.

And now, responding to pressure from domestic automakers, the EPA is poised to soften the requirements for American auto-makers as they race to switch to EVs by 2030, according to the New York Times. The unreleased, amended regulations would ease the EV requirements on car makers in the lead up to 2030 – to less than 60 per cent of total annual production – after which the pressure would ratchet-up substantially.

The New York Times reports that auto-makers think recharging infrastructure needs time to develop and catch-up and that the price of EVs remains too high. Meanwhile labour unions want more time to unionise new EV plants opening across the US.

After boom times for EV sales in the US in earlier 2023, the market for battery vehicles softened as the year progressed, even in California where more EVs are sold than any other state.

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Ford received a deluge of orders for its F-150 Lightning electric pick-up – up to 200,000 – but demand has dropped substantially off the back of the vehicle’s poor performance, especially its range when towing and in sub-zero temperatures. In 2023, Ford sold 24,000 Lightnings despite creating capacity to produce up to 150,000, requiring a scaling back of production at its Michigan plant. Electric pick-ups from other brands have also faltered.

The news comes after former Toyota CEO and now chairman Akio Toyoda criticised the international shift to electric vehicles.

“The enemy is CO2,” Toyoda told assembled media at the 2024 Tokyo Auto Salon in January, adding that a “multi-pathway approach” is needed and that “customers, not regulations or politics” should guide any change. Toyoda, who was famously anti-EV in his role as CEO of Toyota, estimated that EV adoption will peak at just 30 per cent. Notably, Toyoda was replaced as CEO of the Japanese auto giant in early 2023 by Koji Sato, the former Lexus chief who is known to be more pro-EV.

Despite the setbacks, EV sales are expected to reach record highs in the US in 2024 – as they probably will in Australia. It’s estimated more than 1.5 million EVs will be sold in America in 2024, up from nearly 1.2 million in 2023.

In Australia, EV sales softened in January as Tesla hit roadblocks with deliveries, highlighting the local market’s focus on the US brand. However, the market bounced back strongly in February, comprising 9.6 per cent of the 105,023 vehicles sold – a record best for battery electric vehicles.

The global race to an electric vehicle future is driven by increasingly panicked warnings from climate scientists, who warn of catastrophic consequences if the planet’s fragile climate systems warm by more than 1.5 degrees on pre-industrial levels. The climate has already warmed by about 1.2 degrees, demanding substantial and urgent action from not just transportation but every industry and sector around the globe.