President Donald Trump‘s Department of Energy (DOE) has rescinded a rule that incentivized automakers to produce more EVs to comply with Fuel Economy norms.
Fuel Content Factor On EVs
The rescinded provision, called the “fuel content factor,” allowed automakers to calculate fleetwide fuel economy by assigning higher-than-usual efficiency figures to electric vehicles, which then helped bring down the fleetwide fuel consumption figures, Reuters reported on Wednesday.
The agency, according to the report, cited an appeals court decision back in September as the basis for following through on the decision to remove the provision.
EPA, CAFE Rollback
The decision could further prove to be a headwind for EVs, which have already been affected by Trump’s decision to roll back the 2009 Endangerment Finding by the EPA.
The EPA rollback, mixed with the relaxed Corporate Average Fuel Economy (CAFE) norms, which had resulted in what Trump says was an “EV mandate” by the previous Joe Biden administration. The administration has touted affordability in the auto sector as a cornerstone in its policy decisions.
GM, Ford Reaffirm EVs
Interestingly, this decision comes as General Motors Co. (NYSE:GM) and Ford Motor Co. (NYSE:F) reaffirmed their commitment to EVs as the Mary Barra-led automaker shared that it had no intention of ceasing production of the Chevrolet Silverado EV Pickup Truck.
Ford, too, unveiled more details about the company’s Universal EV Platform, which will underpin its $30,000 midsize EV Pickup truck scheduled to arrive in 2027. Company CEO Jim Farley has touted the platform as a crucial element in offsetting China’s dominance in the automotive industry.
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