Last year was another record breaker for the automotive industry’s transition, as fuel efficiency in new U.S. vehicles reached a record high and CO2 emissions per mile reached a record low, according to an EPA report released this week.
The report aligns with trends over previous years but comes amid questions surrounding the future of the electric vehicle (EV) industry, with President-elect Donald Trump vowing to eliminate the $7,500 EV tax credit implemented by President Biden’s Inflation Reduction Act and taking an otherwise skeptical view on the burgeoning sector.
The EPA’s report outlined that CO2 emissions for model year 2023 vehicles hit a record low of 319 grams per mile (g/mi), down from the previous record low of 337g/mi in 2022. The 18 g/mi decrease is a sharper drop than the previous three years combined.
It also found that new vehicles lowered CO2 emissions by 11 percent for the year.
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“This report provides a critical data-driven affirmation that strong, technology-neutral standards can underpin environmental progress while saving drivers money at the pump,” EPA Administrator Michael S. Regan said. “Manufacturers continue to innovate and are bringing technologies to market which will directly improve air quality, better protecting people’s health and saving lives.”
The EPA attributed much of the reduction in emissions to the increased production and deployment of battery electric models (BEVs) and hybrid plug-ins (PHEVs), stating that without the carbon-cutting vehicles, the average CO2 emissions for new vehicles would be 37g/mi higher.
Electric vehicles increased from 6.7 percent of overall U.S. auto production in 2022 to 11.5 percent in 2023. The trend is expected to continue, with the agency predicting that those combined EVs reached nearly 15 percent of production for model year 2024.
But the boom in EV manufacturing could be at risk with reduced consumer incentives from the incoming Trump administration.
In an analysis published last month, three economists, Joseph Shapiro of UC Berkeley, Felix Tintelnot of Duke University and Hunt Allcott of Stanford, projected a 27 percent drop in sales if EV tax credits are eliminated.
Their research also found the elimination of the federal tax credit would decrease annual EV registration – sales and leases – by 300,000, and reduce EV market share from around 11 percent to 8 percent.
“EVs are a technology that have fundamental advantages relative to gas vehicles, so in the long run, EV adoption is likely to be high,” Shapiro told Newsweek. “But if EV adoption happens in 2030 versus 2080, a lot of carbon would be emitted.”
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There are also possible implications for the future of American EV production, as Shapiro said that the countries where technologies are first adopted often have a competitive advantage, pointing to China’s investment into its own growing EV sector.
“In the medium to long run, there could be geographic impacts as to where green supply chains are located,” Shapiro said.
Even if the next administration rolls back federal regulations, states have proposed plans to implement their own subsidies, including California. On Monday, California Governor Gavin Newsom announced plans to maintain $7,500 buyer credits for EVs through state funding if Trump pulls the plug on the federal program.
“We’re not turning back on a clean transportation future—we’re going to make it more affordable for people to drive vehicles that don’t pollute,” Newsom said, with his office suggesting that Tesla would be excluded from the credits despite being the biggest domestic producer of EVs by far.
“Even though Tesla is the only company who manufactures their EVs in California!” wrote Tesla CEO Elon Musk in a post on X. “This is insane.”
