Biden's big bet on EVs is poised to take a detour

President Joe Biden’s hopes for an electric-car takeover of America’s highways are running into speed bumps — amid weaker-than-expected sales and uncertainty over how the green agenda is playing in the crucial swing state of Michigan.

And now his regulators are poised to ease back the throttle, three people familiar with the administration’s internal deliberations told POLITICO.

The Environmental Protection Agency is leaning toward approving a compromise regulation on car and truck pollution that could slow the initial pace of the required cuts compared with a draft proposal the administration released last year, the three people said. The change could mean that for the rest of this decade, electric vehicle sales would climb more incrementally than EPA had originally projected.

But the cuts — and expected EV sales — would accelerate after 2030. By 2032, more than two-thirds of new cars and light trucks sold in the U.S. would be electric, just as the agency had projected last year.

The revised approach could lessen the transition’s economic angst for the industry, auto workers and consumers, though potentially at the cost of allowing hundreds of millions more tons of planet-warming carbon dioxide pollution to enter the atmosphere. The end result would still be a revolutionary change for a country where fully electric vehicles made up just 9 percent of new car and truck sales last year.

The expected pivot underscores the challenges Biden faces in navigating the sometimes clashing demands of key constituencies he’ll need on his side in November, including green activists and organized labor — while trying to engineer a historic shift in one of the United States’ most important industries. The outcome of the debate is especially urgent in Michigan, a state where the president’s political difficulties have grown because of Arab Americans’ anger over his policies on the war in Gaza.

Another person familiar with the administration’s planning, who did not share details of the proposal’s contents, said the final rule is expected next month. The people describing the potential revisions were granted anonymity to discuss an ongoing rule process and private conversations with the administration. The New York Times first reported on Saturday that the EPA intended to relax its proposed vehicle pollution rules.

Biden’s EV policies have faced a fierce attack from former President Donald Trump, who has denounced them as “lunacy” and sought to use the issue to win votes from auto workers in Michigan, a state he narrowly won in 2016. Other Republicans have joined in, falsely accusing Biden of proposing a ban on gasoline-powered vehicles. At the same time, Biden has struggled to energize support from young climate activists, who have bristled at any move by the administration that smacks of political compromise.

Some environmental organizations defended the administration’s anticipated move, seeing it as consistent with Biden’s climate goals and efforts to boost clean manufacturing jobs.

Rather than backtracking, the reported adjustment to the proposal “honors the goal the Biden administration has always tried to deliver,” said Jason Walsh, executive director of the BlueGreen Alliance, a coalition of environmental and labor organizations that includes the United Auto Workers. That’s because it would meet climate commitments while boosting union jobs, he said.

“This entire issue is hyper-politicized right now in an enormously important and consequential presidential election in which Donald Trump in particular has decided he's just going to lie as much as he possibly can about” electric vehicles, Walsh said.

Ali Zaidi, the White House national climate adviser, said in a statement that the upcoming plan would adhere to Biden’s aggressive climate and economic goals.

“President Biden’s vision continues to catalyze the market and bring together stakeholders to take action in a way that meets the moment on climate and positions American workers to lead globally on this critical technology,” Zaidi said.

But other environmental groups criticized the initial news reports that the administration was veering from its ambitious acceleration of electric vehicles. Climate scientists have said nations must rapidly cut planet-heating emissions by 2030 to meet global climate goals that nearly 200 nations, including the United States, reaffirmed at U.N. climate talks in December.

“We urge the EPA to remain steadfast in finalizing a strong rule that will improve public health and protect our future,” Sierra Club Executive Director Ben Jealous said in a statement.

Detroit’s Big Three automakers — General Motors, Ford and Stellantis — were not alone in asking for more time to comply with the EPA proposal. The UAW, a key political ally for Democrats that has 134,000 active members in Michigan, also expressed reservations about the timeline.

Biden has “done an awful lot for the UAW,” including visiting the picket line when the union went on strike last fall, said Ray LaHood, who served as Transportation secretary in the Obama administration.

There’s little doubt that that constituency is part of what’s on the administration’s mind, LaHood said — especially in Michigan.

“They're facing some serious criticism from two separate groups on two separate issues,” he said, referring to Arab Americans and the UAW. He stressed that Michigan — which the president won with a narrow 154,000-vote margin in 2020 — is a “very, very important state to President Biden.”

Adding to the challenges for the green transformation: Electric vehicles sales — while up sharply from just a few years ago — have slowed in recent months, dismaying auto companies that had announced major investments and ambitious time lines for phasing out gasoline vehicles. GM and Ford have recently delayed some of those production projects.

The UAW, meanwhile, has raised concerns over the work standards and pay in parts of the emerging electric vehicle supply chain, where new companies such as battery makers have little history of organized labor. On Wednesday, it announced a $40 million commitment through 2026 to organize non-union auto and battery workers in a sector expected to add thousands of jobs.

For months, the union declined to endorse the outspokenly pro-labor Biden, saying it wanted the president to push harder for better wages and benefits at electric vehicle facilities.

It’s against this backdrop that EPA is weighing whether to stick with the aggressive timeline it had laid out in April for requiring carmakers to cut their vehicles’ tailpipe pollution.

The rule would not explicitly mandate a switch away from the internal combustion engine. But the required cuts would be so sharp that a wholesale shift to electric vehicles would be the clearest way to meet the limits.

A slowing of the initial timeline could match one alternative rule, known as Alternative 3, that EPA had offered in April. Compared with the agency’s original draft, EPA has said, this alternative would allow a cumulative total of 200 million more tons of carbon dioxide pollution through 2055 — an amount equivalent to the annual emissions of more than 40 million cars.

However, the administration isn’t limited to staying within those scenarios, and it is possible new modeling has changed its projections.

Some clean-power advocates emphasized that while the administration is discussing slowing its initial glidepath, it’s not expected to change the final pollution limits it’s proposing to have in place by 2032.

“The Biden administration is not pushing back their timeline,” said Jake Abbott, a policy adviser with advocacy campaign Climate Power, referencing conversations with the administration.

One of the people familiar with the administration’s thinking said the options under consideration would still allow Biden to achieve his goal of zero-emission vehicles making up at least half of new car sales by 2030, on track for even more progress two years later.

“Based on current conversations, the administration is confident the rule will meet its 2032 ambition for emissions reduction,” said the person, who was granted anonymity to discuss conversations about a process that is still in flux.

All told, the EPA says its initial proposal for passenger vehicles would avoid 7.3 billion tons of CO2 emissions through 2055. Alternative 3 would reduce CO2 emissions by 7.1 billion tons.

By a wide margin, both options would represent the biggest carbon savings of any Biden administration regulation. An upcoming EPA rule on power plants’ climate pollution, the administration’s second biggest proposed carbon-reducing regulation, would avoid 617 million tons over 20 years. A Department of Energy proposal for residential water heaters, a regulation that offers incentives for heat pumps, would reduce CO2 by roughly 500 million tons.

John Bozzella, executive director of the auto industry trade association Alliance for Automotive Innovation, implored the administration to slow the transition to “give the market and supply chains a chance to catch up.” That would provide more time to install vehicle chargers and allow incentives from Biden’s signature climate law, the Inflation Reduction Act, to flourish.

Biden and congressional Democrats have poured money and political capital into electric vehicles through the 2021 infrastructure law and the IRA, which included incentives for purchases and domestic manufacturing of electric vehicles. Biden’s environmental allies see those as a boon to the president in manufacturing-heavy states.

Trump is hoping to flip Michigan from Biden, as he did against Hillary Clinton eight years ago, and he has visited the state often during the past year, including last week. He consistently invokes electric vehicles as an economic loser in Michigan campaign stops, even angling for the UAW’s endorsement while promising to halt Biden’s “all Electric Car SCAM.” The UAW’s leadership eventually endorsed Biden, but that doesn’t prevent rank-and-file union members from voting for Trump.

At the same time, Climate Power’s Abbott said, Michigan has been “a huge beneficiary” of the IRA, and incentives have sprouted thousands of jobs there.

December polling by research firm Impact Research showed 57 percent of Michigan voters believed electric vehicles will make up the majority of sales in the next 20 years, with 55 percent supporting electric vehicle manufacturing investments in the state.

“Michiganders strongly support this spending in the clean manufacturing sector, from the federal and the state government, around everything electric vehicles,” Michigan League of Conservation Voters Executive Director Lisa Wozniak said. “They know that this is our future here in the state. And they want to be the place where we build the vehicles of the future and out -compete the rest of the world.”

Yet pushing for a more moderate shift to EVs is likely to play well with independent voters, according to the centrist political group Third Way, whichpolled voters in Michigan and five other swing states last month. Less than half of voters support EVs, although 77 percent back investing in clean energy, the poll showed.

Asked to list the most pressing issue in the election, 35 percent of respondents said economic concerns, ahead of border security and protecting democracy. Only 6 percent said climate change was their top issue, and those people overwhelmingly plan to vote for Biden, according to the poll.

“Based on what we’re seeing, relaxing the timeline for the EV transition is likely to go down a bit better with voters, without compromising support from Climate Hawks,” said Emily Becker, the group’s deputy director of communications for climate and energy, by email.

Robin Bravender, Jean Chemnick, Mike Lee and Brian Dabbs contributed to this report.