What does the 2024 election hold for the future of automotive and energy policy and in particular engines? Speculation rules the day at this point
Seven days ago, the build up to the 2024 election and speculation about the outcome gripped the nation. What a difference a week makes. Following a landslide election victory of the popular and electoral college votes, Republican President-elect Donald J. Trump this week has already announced several appointees to his cabinet in his incoming Administration, including Lee Zeldin, former Republican lawmaker from New York, as the next Administrator of the EPA.
What does the 2024 election hold for the future of automotive and energy policy and in particular engines? Speculation rules the day at this point, so I’ll jump right in.
Domestic Energy Sector Continues Thriving: According to Valerie Thomas, Professor of Industrial Engineering at the Georgia Institute of Technology, the United States is producing more oil and natural gas today than ever before, and far more than any other country. Under each of the three most recent presidencies, Republican and Democratic alike, U.S. oil and gas production were higher at the end of the Administration’s term than at the beginning.
My take: It’s safe to say that this growth trend will continue with the Trump Administration, with pledges to expand leases on federal land and simply the demand for energy. This will translate into a boost for the heavy equipment industry as oil and gas production utilizes many different kinds of heavy-duty engines and equipment for drilling, power generation, pumping, heavy-duty truck transportation, servicing, and construction equipment.
Renewal of our Renewable Fuels Policy? Reducing carbon emissions can be accomplished in many ways; not just by electrification. The EPA’s tailpipe only emissions policy ignores the life cycle emissions policy that would lead to more practical options by boosting advanced renewable biofuels. EPA’s unwillingness to embrace a growth-oriented renewable fuels policy has failed everyone up and down the supply chain. Will the new Trump administration embrace domestically produced low carbon fuels and follow suit with supportive policies? Let’s hope so.
Renewable fuel producers and petroleum interests have often been at odds debating domestic energy policy. Finding some common ground would go a long way to helping ensure both futures for more traditional fuels and more renewable fuels. It should not be an either-or proposition. Renewable fuels are key to a sustainable future for all internal combustion engines.
Start your engines for new Auto and Commercial Truck Emission Policy. The Biden Administration implemented its climate policy by prescribing automotive and heavy-duty truck emissions policies that follow a similar approach: Adopt aggressive rules with challenging deadlines that push electrification, find out that charging infrastructure is lagging and car and truck buyers aren’t buying it as projected, compliance deadlines and costly penalties loom for all, and manufacturers’ planning and investments are upended. And, as we are now learning, sales of traditional combustion vehicles sustain all.
Automotive Policy: something’s got to give. Automakersare facing a multitude of challenges as they witness what happens when policy mandates run into market realities. Aggressive emission standards adopted by President Biden in March require automakers to produce fewer gasoline powered cars and more electric vehicles. Many factors (inflation, access to charging infrastructure) all contributed to a weaker-than-expected EV market that is expected to reach 9-10% of all new vehicle sales this year. This is substantially off pace to achieve President Biden’s goal of 50% of all new vehicle sales being EVs by 2030.
Add to all of that pressure California’s influence that will phase out the sale of gasoline powered vehicles in that state by 2035 conceivably followed by the dozen or so states that are following California. Together these states make up about 40% of the nation’s car market.
Along comes President Trump who has pledged to “eliminate the EV mandate on day 1.” But what does that mean? There is not an EV mandate per se, but rather the stringency of the light-duty car fleet emissions rules effectively forces manufacturers to sell more EVs or hold back on their gasoline vehicle sales. Adding to the uncertainty is the relationship of President-elect Trump and Tesla founder Elon Musk, who has the majority of the EV market in the country. Will Trump end the $7,500 tax credit on EVs that runs until 2032? How will California and its follower states respond to a new automotive policy? How will litigation outcomes impact policies going forward (23 states have challenged EPA’s Heavy Duty truck rules; 15 states are suing California for its truck rules)?
Rescinding or substantially modifying the most recently adopted light duty multi-pollutant rules that the EPA issued earlier in March to ease emissions standards seems to be a likely point of action in the new Administration. With the slowdown on EV adoption currently underway coupled with the new Trump Administration’s likely views on EVs, manufacturers will continue to be sustained by solid sales of their traditional combustion (gas, diesel) vehicles, and improvements in these traditional vehicles and introduce more hybrid technologies. Automakers have substantial investments and their own corporate commitments in zero emissions technology and battery manufacturing and charging infrastructure. These aren’t going away.
Trucking Policy: Something’s got to give here too. Truckers are hopeful that deregulatory and economic boosting policies in the Trump Administration help lift the trucking sector out of the depressed freight market. And it will be just in time as the industry faces a slew of new emissions rules and greenhouse gas reduction requirements from California and the EPA for new vehicles and future fuels.
The EPA’s new greenhouse gas rules for heavy-duty trucks (“Phase 3”) adopted in March effectively dictate starting in 2027 an increasing percentage of fleet sales be zero emissions technology, tied to the sale of conventional diesel and natural gas trucks.
California’s adoption of the Advanced Clean Truck Rule (ACT) and the Advanced Clean Fleets Rule (ACF) together respectively compel manufacturers to produce and sell and fleets to buy zero emissions technology in increasing percentages, which began this year in California. Ten other states have adopted the ACT rule, and nine states are on board with California’s more stringent emissions standards for nitrogen oxides rule. Some reports from California have suggested that already 10-months into the first year of the ACT rule, fleets can’t get the diesel trucks they want to order because of the rules limiting manufacturers from offering them.
And if this is not enough, the industry must make equipment acquisition decisions in 2025 and 2026 in advance of a new EPA emission rule that takes effect in 2027. In previous years facing an emissions milestone, major pre-buys of new equipment occurred in the preceding years, muting any environmental benefit from the new generation of even nearer-to-zero emissions levels.
More so than the auto sector, the commercial trucking industry transition to zero emissions technology is far more challenging. Thanks to the smaller size of the industry overall, the significantly higher infrastructure demands, costs of new equipment in general and zero emissions technology in particular, truckers are making business not emotional decisions. The growing number of state policies impacting vehicle purchase type and use are ultimately hampering both manufacturers and truckers; but can there be a resolution for all?
Truck OEMs, like automakers, have many investments and commitments at stake. They are producing an increasing range of fuel-efficient conventional engines and zero emissions technology for their customers. They too have taken on responsibility to help build out a nationwide heavy-duty truck electric charging infrastructure. These will succeed at some level in the marketplace as one of many options available.
Parting thoughts
Let me end by making a connection with safety.
If we’re about to get on a new road, let’s do it safely. One of the most important things new car and truck drivers learn if you lose control from going into a skid on a wet pavement or after turning sharply to avoid an obstacle, is not to overcorrect. Overcorrecting one extreme turn of the wheel with another raises the risk of a rollover accident and puts everyone on the road at risk. Safe and steady, and in control on the new road, will get us there. So too for our energy, fuel, and environmental policies.
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