Federal court overturns Biden administration's efficiency standard for electric vehicles
The 8th U.S. Circuit Court of Appeals has made a significant decision that could affect the electric vehicle (EV) industry. The court has ruled that the Department of Energy (DOE) lacks the authority to apply a multiplier factor when calculating the fuel economy of electric vehicles.
This ruling reinstates a 2000 rule that sets the multiplier factor for calculating the fuel economy of electric vehicles. The DOE uses a "petroleum equivalency factor" (PEF) to determine the mileage for electric vehicles under the corporate average fuel economy program, which is administered by the Transportation Department.
The multiplier factor, which increases the calculated fuel economy of electric vehicles, was a part of a proposed change by the DOE in 2024. This change aimed to alter how the Energy Department calculates the fuel economy of electric vehicles, a metric that was last updated in 2000, when electric vehicles were largely a novelty.
The proposed change would have phased out the multiplier factor, potentially forcing automakers to sell more EVs to meet fleetwide average fuel economy standards. The Energy Department rule would have meant automakers would need to sell more EVs to meet these standards, a move that could have significantly impacted the number of EVs on the roads.
Environmentalists argued that the multiplier factor overvalued the fuel economy level and pollution reduction benefits from EVs, making it difficult for traditional fuel vehicles to compete. On the other hand, the initiative to overturn the 2024 rule was taken by Republican senators in the context of opposing Biden administration regulations, with involvement connected to Trump-era officials and advisors such as Peter Navarro.
The court's decision is likely to prompt the Department of Energy to conduct a fresh rulemaking to remove the multiplier. This could potentially lead to a reevaluation of the corporate average fuel economy program and its impact on the EV industry.
As more and more electric vehicles take to the roads, it is crucial to ensure that the regulations surrounding them are fair and accurate. The court's decision marks a step towards achieving this goal, and it will be interesting to see how the DOE responds to the ruling.
