New, Less Strict Biden EV Rules Incentivize Gas-Burning Trucks And SUVs

Happy Thursday! It’s June 6, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

1st Gear: Biden Administration EV Rollback To Have Even Worse Pollution Consequences Than Expected

A few months ago, the Biden admin changed the rules around its EV expectations for the future. Largely, this consisted of lowering the percentage of the American fleet that needs to be electric by 2032, but there was a more sinister change behind the scene: That requirement could now be met by plug-in hybrids. This is not great. From Reuters:

When the Biden administration announced new U.S. auto-emissions regulations in March, it made concessions to industry allowing for a much slower electric-vehicle transition than it had proposed a year earlier.

Instead of aiming to convert two-thirds of new vehicles to EVs by 2032, it lowered that target and said automakers could comply by producing more gas-electric hybrids.

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A Reuters examination of the rule changes and the agency’s emissions projections show the concessions will result in substantially more pollution than originally foreseen in two ways: by delaying stricter emissions limits for years; and by retaining an outdated formula for plug-in hybrids that the EPA concedes underestimates their real-world pollution.

Using the EPA projections, Reuters calculated that the rules allow the average-per-mile carbon emissions of light-duty vehicles to be 14% higher between 2027 and 2032 than in the original proposal.

Oh, those EPA projections? They’re hopelessly optimistic too. The agency’s formulas for calculating PHEV emissions haven’t been updated in years, because automakers don’t want more realistic estimates. again from Reuters:

In its original proposal, the EPA called for replacing the 14-year-old formula for plug-in-hybrid emissions with a measure “determined from real world data” on charging, but it decided under pressure from automakers to keep it until 2031. Some automakers argued a more restrictive formula would stifle plug-in innovation.

As a resident of New York, I’m excited for our city to take on a more Venetian flair. I think commuting to work by gondola would be fun, actually. Take a little boat up Sixth Ave, toss a tip to a man in a striped shirt for ferrying you. I’m not coping, you’re coping.

2nd Gear: Conspiratorial Losers Haven’t Stopped Automakers From Making Diverse Hires

You’ve likely heard the phrase “diversity, equity, and inclusion” before, but what you think it means depends on the circles you run in. To some, it’s corporate lip service that rarely ever actually challenges the status quo; to others, it’s mask-off proof of the white nationalist Great Replacement conspiracy theory. Those in the former camp interact with DEI as a corporate-mandated HR training, while those in the latter attempt to use it as a cudgel with which to beat corporations until they stop hiring anyone who doesn’t look like them. In the case of automakers, that plan doesn’t seem to be working. From Automotive News:

That work continues among automakers, but the public discussion around DE&I issues has taken a turn. Diversity efforts have increasingly become political punching bags in some circles, creating a testy atmosphere.

The U.S. Supreme Court ruled in June 2023 that race-based college admissions at Harvard University and the University of North Carolina were unconstitutional, sending a shock wave through academia. Some companies outside the auto industry have been laying off DE&I staffers, while numerous universities have disbanded programs dealing with diversity and inclusion.

Despite this environment, automakers have remained steadfast in their dedication to DE&I.

DEI is not, contrary to what some believe, something that corporations do out of the goodness of their hearts. No matter what Citizens United says, corporations lack hearts. The practice is, instead, just good business — diversity of thought can prevent companies from making mistakes.

3rd Gear: A Trade War With The Country That Produces EV Parts Could Be Bad For EV Sales: Experts

Electric vehicles are a net good for the world. As neat as it would be to commute to Jalopnik’s Manhattan headquarters by gondola, I do think it would get old pretty quickly — those guys in the striped shirts don’t come cheap. Yet, despite this net good, governments around the world are very concerned as to whether they’ll win electric vehicles. This ignores that, without EVs, we all lose. The U.S. is now implementing tariffs on EV parts from China, and experts say it’ll do exactly what you think. From Automotive News:

A simmering trade war with China may hinder America’s transition to electric vehicles.

That’s one conclusion from a new research note issued by global research firm Interact Analysis, which examined the ramifications from a slew of tariffs instituted in May by the White House.

The U.S. auto industry relies heavily on Chinese batteries — more than half of American’s lithium ion battery imports originate in China, according to the report.

As the tariff on those batteries more than triples from today’s rates of 7.5 percent to 25 percent this year, the increased prices risk “further slowing down the electrification process,” the report said.

Thank God they got the experts on this one. I wouldn’t have ever guessed that imposing tariffs on a thing would make it cost more, or that things that cost more are a harder sell than things that are cheaper. I know I have a degree in business, but I feel like I didn’t need it to figure this one out.

4th Gear: Nio Expects Business To Boom In Q2

Every new EV maker wants the Tesla success story, but plenty of them forget that Tesla existed for quite a few years before the Model S and the absurd valuations. It takes time to build a car company, but some automakers are truly putting the work in. Take Nio, for example. From Reuters:

Chinese electric vehicle maker Nio said on Thursday it expected deliveries in the second quarter to more than double from a year earlier to between 54,000 and 56,000.

Revenue would also nearly double to about $2.3 billion in the three-month period starting April, the company said.

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The company, ranked eighth by EV sales in China, saw deliveries of its Nio-branded EVs priced from $4,000 rebound to more than 20,000 units in May after it lowered fees in a battery rental scheme that encouraged sales.

Nio is undercutting the Model Y on its home turf, which could bode well for those sales targets if consumers catch on. Let’s see how it works out.

Reverse: Citizenfour