Auto Lobby Wants Input on Government EV Policy Before Changes Are Made

Matt Posky
by Matt Posky

Despite aggressively pushing for all-electric vehicles to supplant combustion models, the United States government seems to have suddenly realized that such a move could have some rather serious unintended consequences. This is nothing new, as U.S. regulations have shaped vehicle trends in ways the average motorist couldn’t even imagine. With that in mind, the automotive lobby wants to ensure it has the ear of legislators before they do anything that cannot be undone.

But the real question is: What exactly does it want?

The automotive sector is very aware that the proliferation of all-electric vehicles depends on government regulation. Frankly, almost every aspect of the industry does at this stage. If you’re curious why there are so many mysteriously sized vehicles carrying ludicrously high price tags these days, it’s a combination of bad regulations and old-fashioned corporate greed.

Automakers want to maximize their per-vehicle profits to help offset declining annual vehicle sales. But they’re also trying to circumvent emissions regulations and noticed that building increasingly large SUVs and pickups (at the expense of everything else) allowed them to simultaneously do both. Unfortunately, this has left many with product lineups overloaded with models loads of households can no longer afford.

Something similar is happening in regard to EVs.

By pivoting toward all-electric vehicles, many companies assumed they could appease regulators while also benefiting from subsidies put in place by the government over a decade ago. EVs were also assumed to reduce overhead by requiring fewer employees to assemble than traditional combustion cars, helping improve overall profitability. At the same time, Western governments have been doing their utmost to create regulatory pathways that would effectively force companies to run with EVs if they didn’t want to be fined into oblivion.

Unfortunately for everyone involved, the scheme doesn’t appear to have gone off as perfectly as hoped. While it depends on where you’re living, EV sales are slowing down and many electrical grids. and regional charging infrastructures, simply aren’t up to the task of handling a complete shift toward EVs. The vehicles themselves likewise aren’t yet well suited to being a household’s only vehicle due to the fact that their true range is limited by how quickly they can charge away from home. In many cases, charging locations aren’t even available.

Governments are now becoming aware that shifting the nation toward all-electric vehicles poses additional challenges. For example, fuel taxes (which are accounted for when you pay at the pump) are responsible for funding anywhere from a quarter to a third of all roadway maintenance — which would evaporate as more people started driving electric vehicles.

Interestingly, making vehicles more fuel efficient also gradually lowers the amount of fuel taxes collected due to the fact that drivers would be spending less money at the pump.

However, the proposed solution from many has been to create more toll roads and/or institute a per-mile tax on all vehicles (including EVs) that the government would be able to monitor via vehicular connectivity features. Such solutions have been relatively popular in states where leadership sees the transition to EVs as mandatory. But they’re not very popular with motorists that live there. 

Smelling change in the air, Automotive News reported that the automotive lobby is very eager to get involved in the legislative process before any vehicular laws are changed. Considering that manufacturers need almost a decade of runup before new models are released, nobody wants to get caught with their pants down.

From Automotive News:

There are stakeholders on all sides, including charging network providers, EV-related policy organizations and associations representing automakers and dealers. They say legislators' decisions on policies that affect EV ownership costs or charging availability will determine how quickly consumers switch from internal combustion engines.
"It's not just about producing the vehicle and bringing it to market," said Wayne Weikel, vice president of state government affairs for the Alliance for Automotive Innovation, which represents most major automakers in the U.S. and has testified before some state legislative committees on these issues. "It's all the necessary conditions around the vehicle that are needed at this point."
The debates are taking place in EV-friendly states such as California. One bill in the state assembly there would require the state and local governments to streamline permitting and application processes for curbside charging. But they're also happening in states that haven't followed California's decision to phase out new-vehicle emissions over the next decade.
Lawmakers in New Mexico, which has adopted some of California's zero-emissions regulations, passed a state-level purchase incentive for new battery-electric vehicles and plug-in hybrid vehicles. In Pennsylvania, which has not, legislators have held hearings to consider whether charging EV registration fees or switching to a mileage-based tax could be alternatives for funding roads and bridges.

But let’s not presume that the industry is exclusively the victim here. It has spent decades pitching all kinds of regulatory caveats to the government that have arguably allowed it to abuse consumers. The recent standouts include doing everything it can to get the Federal Communications Commission to allocate radio bandwidth so it could use automotive connectivity features that effectively violate the privacy of its own customers and working overtime to stymie right-to-repair laws that would improve the independent serviceability of their vehicles. Both issues are highly lucrative to the industry but come at the expense of independent repair shops, at-home mechanics, and anybody who doesn’t want their vehicle reporting their every move. Heck, we even have cars with in-cabin cameras that literally track your eye movements — another interesting example where government safety regulations and industry desires coincided.

Getting back to EVs, many automakers have bet the farm on electrification. Meanwhile, the holdout brands ( including Toyota, Mazda, and Subaru) are trying to leverage hybridization to appease regulators while they’re doing what they can to provide more traditional vehicles that the market still seems to appreciate. This has created a minor rift within the industry, which frankly sounds like a good thing if it bolsters legitimate competition.

Another rift is taking place between dealerships and the factory. Automakers appear willing to engage in direct sales in a manner similar to Tesla. However, most of the United States requires manufacturers to use franchised dealerships to sell their products due to holdover laws from the onset of widespread vehicle ownership. At the same time, companies are annoyed that dealers have been so eager to apply markups in recent years — which kicked off when production was paused during the pandemic.

But automakers are likewise raising prices and dealers are becoming increasingly upset with the rules surrounding EV sales and the fact that some states will soon prohibit them from selling combustion cars that sell in higher volumes. As an example, California plans on requiring all new-vehicle sales be “zero-emission” by 2035. This means they wouldn’t be able to sell them within the state, potentially resulting in would-be clients going elsewhere.

"If we're mandated to sell these vehicles but nobody wants to buy them, we may be forced to take a different view about whether these issues are, in fact, peripheral or directly related to what we do," Brian Maas, president of the California New Car Dealers Association, told Automotive News.

EV charging companies are similarly interested in what kind of legislation is being passed. In a bid to bolster charging outside the home, billions in government grants have been issued to businesses willing to install stations. Some states are even pushing legislation that would require EV charging stations to be installed into apartment complexes, office buildings, and multi-family homes — which would lead to an explosion of business.

Such laws are also assumed to help bolster EV sales, pleasing any company that’s heavily invested into selling all-electric vehicles. But there doesn’t appear to be any sound solution to any of this. The automotive industry has spent billions upon billions of dollars to pivot toward all-electric vehicles and many are on a development trajectory that locks them into building EVs for years to come. With the exception of the brands that held out, many couldn’t turn away from electric cars even if they wanted to right now.

This creates a lot of pressure to continue in that direction and petition the government for more help to achieve those goals, even if vehicle sales and consumer sentiment don’t support those ends. It's quite the conundrum.

[Image: ZikG/Shutterstock]

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Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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11 of 116 comments
  • D D on Jun 04, 2024

    Thanks for the great article summarizing the mess we're in.

    I think it's interesting that range is still the most often stated concern about EVs. Besides what the article points out, there's obviously more to it for those who are not sold. For example: political statements on both sides as Musk shows his true colors, and increased awareness of maintenance and repair costs as Hertz makes a business decision to reduce their fleet.

    Another obstacle is extreme wealth disparity as manufacturer's focus necessarily follows the money. We could alleviate some of the problem by integrating micro mobility into our urban infrastructure. A good start would be lower speed limits in town to give light personal transportation a chance at survival. (cue the NIMBY objections)

    • See 3 previous
    • Jalop1991 Jalop1991 on Jun 05, 2024

      1995 SC has the correct answer.

  • Jonathan Jonathan on Jun 04, 2024

    I can't believe I'm saying this, but I feel some sympathy for the legacy automotive companies. Being told by the feds to manufacture increasing numbers of a product (EVs) that the majority cannot afford, don't even want if they did have the money, and all to allegedly "save the planet". I pray more sane and rational minded people turn back some of these regulations and impending deadlines before they're implemented.

    • See 4 previous
    • 1995 SC 1995 SC on Jun 04, 2024

      @VOghost, where are you getting that EVs are cheaper? I'm not getting that from any automaker's website. I cant find a single segment where the EV is the cheaper option.

  • Sobhuza Trooper Subaru, they were almost there with the BRAT. --On a lighter note, where the hell is my Cooper Works Mini truck?
  • Mike Evs do suck, though. I mean, they really do.
  • Steve Biro I don’t care what brand but it needs to be a compact two-door with an ICE, traditional parallel hybrid or both. A manual transmission option would be nice but I don’t expect it - especially with a hybrid. Don’t show me an EV.
  • ToolGuy Lose a couple of cylinders, put the rest in a straight line and add a couple of turbos. Trust me.
  • ToolGuy Got no money for the Tasman, it is going to the Taxman. 🙁