Clean Car Standards

Trump Misled Viewers On Clean Cars And Gas Mileage. According to E&E News, “President Trump misrepresented his rollback of clean car standards and his record on electric vehicle subsidies at the first presidential debate last night, in a remarkably substantive exchange on climate and transportation policy. As part of an unexpected series of questions on climate change, moderator Chris Wallace of Fox News asked Trump why he loosened fuel economy standards established by former President Obama, a move that will increase pollutants in the atmosphere. Trump said earlier that he wanted ‘immaculate air.’ ‘Why have you relaxed fuel economy standards that are going to create more pollution from cars and trucks?’ Wallace asked the president. Trump responded by asserting that the rollback, which is formally known as the Safer Affordable Fuel-Efficient (SAFE) Vehicles rule, would make cars safer and cheaper. ‘What’s happening is the car is much less expensive, and it’s a much safer car, and you’re talking about a tiny difference,’ Trump said. ‘And then what would happen, because of the car, you would have at least double and triple the number of cars purchased,’ he continued. ‘We have the old slugs out there that are 10, 12 years old. If you did that, the car would be safer, it would be much cheaper by $3,500.’ Trump’s claims echoed an argument made by top officials at EPA and the Department of Transportation, the two agencies that crafted the SAFE Vehicles rule. The argument goes like this: The rollback will reduce the price of new cars. That will encourage more Americans to replace their older cars with newer, safer models. Administration officials say that would prevent thousands of fatal car crashes.” [E&E News, 9/30/20 (=)]

EPA

EPA Questions Legality Of California's Attempt To Phase Out Sales Of Gas-Powered Cars. According to The Hill, “The federal government is raising legal and practical questions about a recent California executive order attempting to end sales of gas-powered cars in the state by 2035. Environmental Protection Agency (EPA) Administrator Andrew Wheeler wrote to California Gov. Gavin Newsom (D) on Monday, saying he believes California would need to request a waiver from his agency for the order to be implemented and implying that the state’s electricity infrastructure is insufficient for a shift toward electric vehicles. ‘While the [executive order] seems to be mostly aspirational and on its own would accomplish very little, any attempt by the California Air Resources Board to implement sections of it may require California to request a waiver to U.S. EPA,’ Wheeler wrote. The EPA last year revoked a waiver that allowed California to set its own vehicle tailpipe emissions standards, so it appears unlikely that the agency would grant one on car sales under the current administration. California, alongside 22 other states, has sued the agency over that decision, arguing that its standards were achievable and that the EPA’s decision is bad for climate change. The executive order also comes as California has recently faced rolling blackouts, Wheeler noted. ‘California’s record of rolling blackouts — unprecedented in size and scope — coupled with recent requests to neighboring states for power begs the question of how you expect to run an electric car fleet that will come with significant increases in electricity demand, when you can’t even keep the lights on today,’ the country’s top environmental official wrote.” [The Hill, 9/29/20 (-)]

EPA Vs. California, Again. According to the Washington Examiner, “EPA Administrator Andrew Wheeler slammed Gov. Gavin Newsom’s commitment to 100% zero-emissions vehicle sales by 2035 in a letter Monday, suggesting California’s move might not be legal given the Trump administration’s withdrawal of the state’s ability to set its own tailpipe greenhouse gas limits. Wheeler also didn’t pass up a chance to hit California again on the rolling blackouts it experienced in August amid peak electricity demand during a severe heat wave. Wheeler and other Republican politicians have blamed California’s aggressive climate policies and increasing amounts of renewable energy for the blackouts. ‘California’s record of rolling blackouts – unprecedented in size and scope – coupled with recent requests to neighboring states for power begs the question of how you expect to run an electric car fleet that will come with significant increases in electricity demand, when you can’t even keep the lights on today,’ Wheeler wrote.” [Washington Examiner, 9/29/20 (=)]

1 Big Thing: EPA Vs. California's New EV Mandate. According to Axios, “EPA is making its opening moves against California’s plan to phase out sales of new gasoline-powered cars by 2035 — the latest front in the battle between the White House and the state over climate policy. Driving the news: Via The Wall Street Journal, EPA boss Andrew Wheeler sent California Gov. Gavin Newsom a letter attacking the plan and arguing it would require EPA approval. The letter Monday says there are ‘serious questions’ about the plan’s legality and that it may require a waiver from EPA, per Reuters’ report on it. Why it matters: California is the nation’s largest auto market. Newsom’s plan last week is the most aggressive U.S. move to curb carbon emissions from transportation and push electric vehicles. Wheeler’s letter underscores the stakes of the ongoing litigation between EPA and California over cars, as well as the outcome of the election, and even the Supreme Court makeup. Last year the Trump administration revoked the state’s special authority under the Clean Air Act to set its own tailpipe emissions rules that a number of other states may adopt. Yes, but: The fight over California’s plan is in its early stages. Newsom’s executive order last week is only a first step. State regulators’ completion of final rules to actually implement it is likely years away. The intrigue: It’s a legal fight, but also a PR battle, with Wheeler’s letter taking aim at California’s recent rolling blackouts. The states’ power woes raise the question of ‘how you expect to run an electric car fleet that will come with significant increases in electricity demand, when you can’t even keep the lights on today,’ it states. Newsom spokesman Jesse Melgar, in a statement to several outlets, said the Trump administration is trying to ‘drive this country off a climate cliff.’ ‘We aren’t going to back down from protecting our kids’ health and the air they breathe,’ he said.” [Axios, 9/29/20 (=)]

Election 2020

Debate Fact-Check: False Claims Amid Disorderly Fracas. According to Roll Call, “President Donald Trump and former Vice President Joe Biden met on the debate stage Tuesday for the first time and stretched or mangled facts on several topics. The debate in Cleveland was moderated by Chris Wallace of Fox News. […] Unplugging electric car incentives The president claimed to support the manufacture and sale of electric vehicles during a portion of the debate on climate change, saying, ‘I’ve given big incentives for electric cars.’ But his record doesn’t reflect that. A 2019 report from the Congressional Research Service identified three federal programs that incentivize the manufacture or purchase of electric vehicles — the Advanced Technology Vehicles Manufacturing Loan Program, which supports production of fuel-efficient vehicles; the Corporate Average Fuel Economy (CAFE) standards, which are aimed at increasing fuel efficiency; and the Plug-In Electric Drive Vehicle tax credit, which gives tax credits to purchasers of electric vehicles. All three programs predate the Trump administration, and the president has proposed eliminating two of them. In his budget for fiscal year 2020, Trump proposed eliminating the Plug-In Electric Drive Motor Vehicle Tax Credit, which had been introduced in 2008. The following year, Trump sought to eliminate the Advanced Technology Vehicles Manufacturing Loan Program in his 2021 budget proposal. That program had been established in 2007.” [Roll Call, 9/30/20 (=)]

Trump, Biden Clash Over Michigan COVID-19 Policies, Auto Jobs. According to The Detroit News, “President Donald Trump and Joe Biden put the spotlight on Michigan during a fierce Tuesday night debate as the two candidates dueled over COVID-19 restrictions and economic policies. Between frequent interruptions and verbal clashes — including one in which the former vice president asked Trump to ‘shut up’ — the two candidates talked about policies that could directly impact the state, such as fuel economy standards and how they’ll handle the results of the Nov. 3 election. The Republican president renewed his call for Gov. Gretchen Whitmer and other Democratic governors to lift economic restrictions during the ongoing pandemic. The Democratic nominee challenged Trump’s claims on boosting the economy, touting his involvement in the 2008-2009 auto bailout. ‘I’m the guy that brought back auto manufacturing,’ Biden said at one point. ‘I was asked to bring back Chrysler and General Motors, and we brought them back right here in the state of Ohio and Michigan. He blew it. They’re gone.’ Former President Barack Obama, under whom Biden served as vice president, forced GM and Chrysler into bankruptcy and loaned them and their lending arms about $55 billion after President George W. Bush loaned them $25 billion near the end of 2008. Trump interrupted Biden’s claim during the debate, ‘Ohio had the best year it’s ever had last year. Michigan had the best year they’ve ever had.’ ‘It’s not true,’ Biden said. On one measure of the economy, the jobless rate in Michigan was down to 4.9% when former President Barack Obama and Biden left office, according to the federal Bureau of Labor Statistics.” [The Detroit News, 9/29/20 (=)]

Trump Claims Credit For Electric Vehicle Incentives His Administration Opposes. According to the Washington Examiner, “President Trump claimed during Tuesday’s debate that his administration has given ‘big incentives’ to electric cars, despite a consistent push from his White House to pull the plug on federal tax credits for the vehicles. ‘I’m okay with electric cars, too. I’m all for electric cars,’ Trump said during a climate change segment within Tuesday night’s debate. ‘I’ve given big incentives to electric cars, but what they’ve done in California is just crazy.’ Trump didn’t go into detail, but he was likely referring to Democratic California Gov. Gavin Newsom’s commitment last week to require 100% zero-emissions vehicle sales in the state starting in 2035, essentially banning the sale of new gas-powered cars by that year. The president’s claims that he supports electric car incentives don’t hold up, however. The White House has repeatedly sought to kill tax credits, which offer consumers a $7,500 incentive to purchase an electric car, and Trump himself has threatened to end them. The White House even proposed eliminating the incentives in its fiscal year 2020 budget request. The tax credit has already run out for Tesla and General Motors. Democratic presidential nominee Joe Biden, meanwhile, has pledged to extend and expand incentives for electric cars. ‘We’re going to make sure that we are able to take the federal fleet and turn it into a fleet that are electric vehicles,’ Biden said during Tuesday’s debate. He also touted his plan to build 500,000 public electric car charging stations.” [Washington Examiner, 9/29/20 (=)]

Trump Claims Support For Electric Cars, Takes Credit For Obama-Era EV Tax Credit. According to Electrek, “President Donald Trump claimed support for electric cars during the presidential debate with former Vice-President Joe Biden and appeared to take credit for the federal EV tax credit implemented during the Obama administration. The first presidential debate of the 2020 election was held tonight and while it’s not something that we would normally cover, there was a small item about our industry: electric vehicles. When talking about climate change, President Trump refused to acknowledge the climate crisis and instead focused only on air and water quality. However, he also briefly mentioned that he supports electric cars: ‘I’m all for electric cars.’ Then President Trump quickly claimed that he has given ‘big incentives’ to electric vehicles: ‘I’ve given big incentives to electric cars.’ It’s unclear what EV incentive he is referring to since the only federal incentive is an IRS tax credit for plug-in and all-electric vehicles. But that program wasn’t implemented by the Trump administration. It dates back to the American Clean Energy and Security Act of 2009 (ACES) under the Obama administration under which Joe Biden was vice-president. It greatly expanded on another plug-in car initiative signed into law by President Bush. In fact, the Trump administration attempted to eliminate the tax credit for electric vehicles in the original version of their 2020 budget – though the provision never passed. Furthermore, President Trump has been actively seeking to rollback vehicle emission standards that were encouraging automakers to produce more electric cars.” [Electrek, 9/29/20 (=)]

Courts and Legal

Judges Freeze NHTSA Trailer Rule, For Now. According to Politico, “Three federal judges on the D.C. Circuit Court of Appeals who earlier this month heard an industry challenge Obama-era rules for truck trailers have stayed the remaining requirements pending their ultimate ruling on the regulations. The court years ago iced the EPA emissions standards for trailers, which would have taken effect in 2018; now the National Highway Traffic Safety Administration fuel economy portion of the rule is frozen as well, according to a brief order issued Tuesday night. It was slated to take effect Jan. 1, and the Truck Trailer Manufacturers Association said continued uncertainty would harm manufacturers who starting to take orders for delivery after that date. Dept. of Tea Leaves: It’s hard to read too much into such an order given the rule’s rapidly approaching deadline. However, the judges during arguments focused a lot on whether striking down the EPA half of the rule would mess up implementation of the NHTSA half — potentially signaling that they may split the difference but order NHTSA to revisit certain implementation issues for its half.” [Politico, 9/30/20 (=)]

Auto Manufacturers

GM Tests Its Ultium Battery System For Cruise Origin Autonomous Electric Vehicle. According to Electrek, “GM has started testing its Ultium battery system, which is going to power its next generation of electric vehicles, for the Cruise Origin autonomous electric vehicle. Earlier this year, GM Cruise, General Motors’ autonomous driving subsidiary, unveiled its self-driving electric car designed for ridesharing. The vehicle was technically the first vehicle to get GM’s new Ultium battery system. This week, Ken Morris, General Motors’ VP of AV and EV programs, sent an update to GM employees about the program: ‘Despite the pandemic, we haven’t missed a beat. Our EV and AV programs remain on track. In fact, from 2020 until 2025, we will allocate more than $20 billion of capital/engineering resources to our EV/AV programs, which equates to more than $3 billion annually.’ Cruise has been testing its autonomous driving system in specially outfitted Chevy Bolt EVs, but they stopped testing the vehicles during the pandemic and instead use the fleet to help local food banks. Morris wrote: As the pandemic began to spread in the U.S., Cruise stopped the testing of their Chevrolet Bolt EV-derived Cruise AV fleet as San Francisco shut down. Seeing a means to serve its community, Cruise volunteered its support to the San Francisco-Marin Food Bank and SF New Deal, a San Francisco based nonprofit, dedicated to keeping small businesses working during the COVID-19 pandemic. Using the Cruise AVs, the Cruise team has made almost 100,000 contactless deliveries and counting, allowing them to continue to capture real world data, and continue to meet their intended milestones.” [Electrek, 9/29/20 (=)]

AP | Closing Date Of GM-Nikola Partnership May Be Delayed. According to E&E News, “Shares in electric and hydrogen-powered truck startup Nikola fell more than 6% yesterday after General Motors Co. cast doubt on whether a $2 billion partnership would close as scheduled. GM said in a statement that the deal has not closed and discussions with Nikola are continuing. Yet a press release from when the deal was announced said the companies expected to finalize it before today. A regulatory filing by Nikola says either side can end the deal if it doesn’t close by Dec. 3. GM’s statements said it will provide updates when appropriate or required. Under the partnership announced Sept. 8, GM would get an 11% stake in Nikola in exchange for engineering and building Nikola’s Badger hydrogen fuel cell and electric pickup truck. GM also will supply batteries for other Nikola vehicles, including heavy trucks. But on Sept. 20, Nikola founder and Chairman Trevor Milton resigned after Hindenburg Research, a company that’s betting Nikola stock will drop, accused Nikola of fraud. Nikola denies the allegations and called them misleading. Hindenburg said Nikola’s success was an ‘intricate fraud,’ including a video showing a truck rolling downhill to give the impression it was cruising on a highway, and stenciling the words ‘hydrogen electric’ on the side of a vehicle that was actually powered by natural gas. The Securities and Exchange Commission and the Justice Department are reportedly investigating. GM has said it did proper due diligence before entering the partnership. Nikola shares shot up after the deal was announced, but since then have tumbled over 60%. GM’s stock is down about 11% since the partnership was unveiled.” [E&E News, 9/30/20 (=)]

AP | SEC Fines Fiat Chrysler For Misleading Investors. According to E&E News, “Fiat Chrysler will pay $9.5 million to settle charges from U.S. securities regulators that it misled investors about emissions control problems. The Securities and Exchange Commission said Monday that the Italian-American automaker made incomplete disclosures to investors about an internal audit of its vehicle emissions systems. The agency says that in February of 2016, FCA said in a news release and in its annual report that the audit determined its vehicles complied with emissions regulations. But the audit wasn’t a comprehensive review of the company’s compliance, the SEC said. About the same time, engineers from EPA and the California Air Resources Board raised concerns about emissions systems in some FCA diesel engines. The SEC said that Fiat Chrysler agreed not to violate reporting provisions of U.S. securities laws. The company did not admit to or deny the agency’s findings. Last year, Fiat Chrysler agreed to pay hundreds of millions of dollars, including a $300 million fine to the U.S. government, to settle allegations that it cheated on diesel emissions tests. Fiat Chrysler has maintained that it didn’t deliberately scheme to cheat and the company didn’t admit wrongdoing. Also last year, the SEC said Fiat Chrysler would pay $40 million to settle allegations that it misled investors by overstating monthly sales numbers over a five-year period.” [E&E News, 9/30/20 (=)]

Tesla (TSLA) Secures Massive Order Of Tesla Semi Electric Trucks From Walmart. According to Electrek, “Tesla (TSLA) has secured a massive order of 130 Tesla Semi electric trucks from Walmart Canada. Back in 2017, shortly after the unveiling of the Tesla Semi, Walmart Canada ordered 15 electric trucks from the automaker. They have been adding to that original order and now almost 3 years later and after the Tesla Semi program was delayed, Walmart has announced that it is expanding its Tesla Semi orders to 130 trucks: ‘Walmart Canada is now reserving a total of 130 Tesla Semi trucks, making it one of the largest reservations of electrified trucks in the country. The move comes on the heels of Walmart Canada announcing a major $3.5 billion investment over the next five years aimed to generate significant growth in the business and is aligned with Walmarts global goal to target zero emissions by 2040 announced at Climate Week earlier this month.’ Tesla first started taking reservations with a $5,000 deposit per truck, but it later changed the listed deposit price to $20,000 for a ‘base reservation’ of the production version and the full $200,000 for the ‘Founders Series’ truck. It means that Walmart would have placed over $2 million in deposits alone for the electric trucks and the total order could be worth over $20 million. It makes this new order one of the biggest orders to date for the Tesla Semi. John Bayliss, Senior Vice-president of Logistics and Supply Chain at Walmart Canada, commented on the new order: ‘Tripling our reservation of Tesla Semi trucks is part of our ongoing effort to innovate the business and prioritize sustainability.” [Electrek, 9/29/20 (=)]

Electric Vehicles

Karma Automotive Will Build 20,000 Electric Vehicles With Ayro By 2023. According to Forbes, “Karma Automotive is getting into the light-duty electric vehicle game. Karma says it will work with Ayro, Inc. in a ‘strategic manufacturing, engineering and design partnership’ to make ‘more than 20,000 vehicles’ by the end of 2023 that will be valued at more than $300 million. Ayro, formerly known as AEV, says its EVs are purpose built, which is one way of saying they’re the small work trucks that you’re likely to see on college campuses or working in cities to make last-mile deliveries or municipal duties. The company’s current line-up of ‘light-duty, urban and short-haul electric vehicles’ come in two versions, the Club Car 411 and the 311. Ayro’s Club Car 411 is a prototypical example of these work trucks, one of these simple utility vehicles that you can imagine cruising around with rakes and a big water cooler strapped to the back. The Club Car 411 has three configuration options - flatbed, pickup or a full van box that offers 123 square feet of cargo room and a half-ton payload capacity. The Ayro 311 looks like it’d be more fun, but the three-wheeler is still meant to be used as a delivery vehicle. The 311 also comes in three flavors: as a fully enclosed two seater, one with half doors, and as a one-seater with a cargo area. The Ayro 311 has a driving range of up to 85 miles per charge. Ayro has also developed the 511 4x4 Concept, which is meant to be an off-road EV with full-time four-wheel drive and 13 inches of ground clearance. The company has not said when or if it will put the 511 4x4 into production.” [Forbes, 9/29/20 (=)]

Off-Roading Is Going Electric. According to Axios, “Polaris plans to electrify its popular lineup of off-road vehicles and snowmobiles through a new 10-year technology partnership with Zero Motorcycles, Axios’ Joann Muller reports. Why it matters: People who want to enjoy the Great Outdoors don’t have to worry about polluting the environment or disturbing the wilderness when they’re riding on a nearly-silent, zero-emission machine. Details: Under the exclusive agreement, Polaris will develop, manufacture and sell electrified off-road vehicles and snowmobiles using Zero’s powertrain technology, hardware and software. The company will offer an electric vehicle option within each of its core product segments by 2025, the first of which will debut by the end of 2021. It includes Polaris’ Ranger, Razor and General side-by-side vehicles, as well as its all-terrain ride-on vehicles (ATVs) and snowmobiles. Between the lines: In an interview with Axios, Polaris CEO Scott Wine acknowledged he was an ‘extremely reluctant’ convert to electric powersports, because the company could never find the right balance of cost, performance, weight and range. But EV technology has improved, and Zero Motorcycles, which has been designing and manufacturing electric motorcycles since 2006, is the right partner, he said.” [Axios, 9/29/20 (=)]

The Long Road To EV Dominance. According to Axios, “For advocates of electric cars and cutting carbon emissions, that chart could be viewed as encouraging, daunting, or both. The big picture: Per DOE’s handy transportation ‘fact of the week’ series, it shows how EV sales have taken off over the last decade. And full electrics have overtaken plug-in hybrids over the last five years. Why it matters: EVs are growing, but still represent a tiny share of the roughly 17 million-plus passenger vehicles sold annually in the U.S. (a number dropping this year because of the pandemic). Even in California, the biggest EV market, cars with a plug were around 8% of new sales last year. What we’re watching: The angle of that upward line. Joe Biden, if he wins, hopes to juice EV sales with investments in charging infrastructure and expanded vehicle tax credits (among other things). Automakers, for their part, are bringing a suite of new models to market, and as noted in the item above, the fate of state efforts will matter too. Go deeper: Eyeing the end of gas-powered cars” [Axios, 9/29/20 (=)]

Research and Analysis

Why Electric Vehicles Will Likely Emerge As California’s Top Manufacturing Export In 2020. According to Forbes, “In the last five years, California’s electric vehicle (EV) industry has emerged as a driver of good jobs and manufacturing exports, and the industry’s value is only gaining speed. Increasingly favorable economics, rising global demand, and the COVID-19 pandemic mean EVs will likely emerge as the state’s top manufacturing export in 2020. The fast-moving EV industry is powering an expanding clean energy ecosystem in California and the economic payoff has been significant, generating tens of thousands of good jobs, millions in tax revenue for governments, and nurturing multiple other supporting businesses. Workforce development at an electric bus production facility in Southern California. PROTERRA For policymakers in California and elsewhere considering accelerating the transition to clean energy, the EV industry’s economic growth is a case study in the potential economic upside of fighting climate change. By setting strong policies that stimulated innovation and market demand and supporting manufacturing startups, the state is developing a blueprint for clean energy exports and economic growth. The state’s EV exports are positioned to grow in 2020 on strong global demand for EVs, which hit a record of 515,000 in Europe through the end of July 2020, rising to nearly 9% of all new car sales. EV sales have also reached new heights in China, jumping 44 percent in August 2020 compared to August 2019. Even if EV exports remain level in 2020, trends suggest a significant decline for the civilian aircraft category, which includes export of civilian aircraft engines and parts. The airline industry was the state’s leading export in 2019 and has been hit hard by the economic fallout of the COVID-19 pandemic. Taken together, these market fundamentals mean EVs are likely to claim the mantle of California’s top manufacturing export this year.” [Forbes, 9/30/20 (=)]

Opinion Pieces

Editorial: Move Toward Electric Vehicles Grows. According to the Huntington Herald-Dispatch Editorial Board, “It isn’t just California that wants to replace gasoline-powered vehicles with electric ones. This region’s largest supplier of electricity plans to do the same. American Electric Power, the parent company of Appalachian Power, Ohio Power and Kentucky Power, announced plans Monday to accelerate its electric vehicle purchases with the goal of replacing all of its 2,300 cars and light-duty trucks with electric vehicle alternatives by 2030. In its announcement, AEP said its total fleet is composed of nearly 8,000 vehicles, including medium- and heavy-duty vehicles. By converting medium- and heavy-duty vehicles as electric or hybrid models become available, AEP expects to achieve its goal of electrifying 40% of its entire on-road vehicle fleet in less than 10 years. Transitioning light-duty vehicles to EVs has been part of AEP’s fleet strategy and will become the standard across its subsidiaries. AEP will begin to transition medium- and heavy-duty vehicles, as well as off-road equipment, as electric and hybrid alternatives become available. In addition, AEP said it will electrify 50% of its forklifts by 2030. ‘AEP has made great progress in reducing the carbon dioxide output of our power generation fleet, cutting emissions by 65% since 2000 and setting a goal to achieve a more than an 80% reduction, and aspiring to be net-zero, by 2050,’ Nicholas K. Akins, AEP chairman, president and CEO said in a prepared statement. It’s not surprising AEP would make such a move. It’s in the business of selling electricity, so it’s only natural the company would want to transition its vehicle fleet to electricity as the technology and financial considerations allowed. AEP apparently believes that time is now.” [Huntington Herald-Dispatch, 9/30/20 (+)]

Chad Ellwood

Senior Research Associate

Climate Action Campaign

cellwood@cacampaign.com

202.448.2877 ext. 119