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New Rules Will Still Push Carmakers to Sell More Electric Cars

New Rules Will Still Push Carmakers to Sell More Electric Cars

New Biden administration auto rules will ease requirements compared with an earlier proposal but will still add to market pressure for cheaper electric vehicles.

Even if clean air rules announced on Wednesday in Washington are less forceful than some environmentalists would have liked, they should still have a powerful effect on what kinds of cars appear in showrooms over the next several years, experts said.

The rules will amplify market forces pushing the industry toward battery power, giving automakers a strong incentive to sell a broader, more affordable variety of electric cars — not just the expensive sport utility vehicles that have dominated sales so far.

“It probably means more models and lower prices,” said Craig Segall, former deputy executive officer of the California Air Resources Board, an agency that played a key role in promoting electric vehicles in that state. “The way you win,” he said, referring to carmakers, “is making sure you have an E.V. in each segment.”

Despite talk of a slowdown, sales of electric vehicle are growing much faster than sales of vehicles that run on fossil fuels. Prices of electric vehicles have dropped significantly and are likely to fall further as carmakers get better at making them and the cost of batteries and raw materials plummets.

The Environmental Protection Agency rules announced Wednesday “certainly don’t slow down the pace at which our members are scaling up production,” said Albert Gore III, executive director of the Zero Emission Transportation Association. The association’s members include Tesla and other electric car makers, as well as battery manufacturers, charging companies and suppliers.

The Inflation Reduction Act passed by Democrats in 2022 sparked a boom in investment in battery factories and electric vehicle plants. Since then, companies have announced investments of more than $110 billion in battery factories and electric vehicle assembly plants, according to the Environmental Defense Fund. These are long-term financial commitments that companies will likely stick to regardless of what the federal government does.