Emission Fights Cloud Electric Vehicle Growth
As the U.S. market for electric vehicles has grown in recent years, many electric utilities around the country have welcomed the resulting incremental demand for power. However, the uncertainty over future U.S. national fuel economy standards isn’t helping the segment’s growth. The last several months have been especially tumultuous, as the Trump administration has sparred with various automakers over not only the standards, but also who has the authority to set them. There is reason to believe that the current administration is reconsidering its stance, if only slightly.
The Trump administration has long planned to freeze the rise in U.S. vehicle fuel efficiency standards. That strategy appears to have lost steam in recent months. In July 2019, Ford, Honda, Volkswagen, and BMW announced that they had agreed with California to pursue annual efficiency gains of 3.7% per year. While the current administration remains vehemently opposed to this agreement, arguing that California lacks regulatory authority to enact such standards, there are signs that the administration may soften its stance with a proposal for a 1.5% annual increase in fuel efficiency standards.
Given the significant disparity in the positions held by certain industry players and the Trump administration, we appear to be several months away from clarity on U.S. vehicle efficiency standards for the mid- to late-2020s and beyond. This uncertainty will likely further delay meaningful progress by many automakers on the electrification of their U.S. vehicle fleets, somewhat delaying the incremental load available to electric utilities nationally.
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