Largest US oil trade group sues to block Biden's 'intrusive' EV efforts

The United States' largest oil trade group, which includes Exxon Mobil and Chevron, filed a federal lawsuit on Thursday seeking to block the Biden administration's efforts to reduce planet-warming emissions from cars and light trucks and encourage electric vehicle manufacturing.

The US Environmental Protection Agency issued new tailpipe emission rules in March that will force automakers to produce and sell more EVs to meet the new standards. Under the rule, the administration projects up to 56 percent of all car sales will be electric between 2030 and 2032.

The American Petroleum Institute says the EPA has exceeded its congressional authority with a regulation that will eliminate most new gas cars and traditional hybrids from the US market in less than a decade.

"Today, we are taking action to protect American consumers, US manufacturing workers and our nation's hard-won energy security from this intrusive government mandate," API Senior Vice-President and General Counsel Ryan Meyers said.

The National Corn Growers Association and the American Farm Bureau Federation will join API as co-petitioners, along with six auto dealers representing 16 brands and collectively operating dozens of dealerships across the country.

The two farm groups rely on gas-powered vehicles to support the corn-ethanol industry.

"By approving tailpipe standards that focus exclusively on electric vehicles, EPA has ignored the proven benefits corn ethanol plays in reducing greenhouse gas emissions and combating climate change," Minnesota farmer and National Corn Growers Association President Harold Wolle said.

The regulations are among the most significant environmental rules implemented under President Joe Biden, who has made tackling climate change a key pillar of his presidency. It has also complicated his relationship with a key ally, the United Auto Workers, who have been slow to embrace the transition to EVs.

The US auto industry has largely endorsed the new tailpipe standards. In the final rule, Biden slashed its target for EV adoption amid an auto worker backlash, but the watering down of the measure did little to pacify an oil industry that needs gas-powered vehicles to survive.

For both Biden and his Republican rival, Donald Trump, the road to the White House in November's presidential election goes through the industrial states of Michigan, Wisconsin and Pennsylvania where workers fear that the EV transition threatens jobs.

Trump has repeatedly excoriated EVs and promised to roll back the new tailpipe standards.

Major carmakers in the US are facing slower-than-expected EV sales.

Ford Motor is planning to allow all of its dealers to sell EVs, reversing its more selective allocation system to boost their sales.

The automaker based in Dearborn, Michigan, unveiled the EV selling rules in late 2022, requiring dealers to spend between $500,000 to about $1 million on charging equipment and other programs. About half of Ford's 2,800 dealers enrolled in the group since it was introduced.

Ford CEO Jim Farley previously warned dealers they would be held to "brutal" standards to stay competitive and serve customers during the EV transition.

That transition has been bumpier than many auto executives expected. Automakers like Ford have prioritized production of hybrid vehicles as the sales growth rate of these models have outpaced pure EVs.

US hybrid sales increased 25.3 percent from 2022 to 2023 for Ford, whereas EV sales rose 17.9 percent over the same period.

Scott Kunes, COO of a Midwest dealer group that sells Ford vehicles among several other brands, was one of the 1,400 dealers who joined the program. He had concerns about EV demand, though, so his group only made the investment for their two largest Ford locations in Wisconsin and Illinois.

"The dealers have been kind of screaming from the sidelines for a while here that the EV demand is just not there," Kunes said. While he's glad Ford took the step they did, "it's still a little bit too late."

REUTERS