The National Highway and Traffic Safety Administration is expected to release new fuel efficiency standards this summer for models made in 2027 through 2032. They’ll address corporate average fuel economy, commonly known as CAFE Standards.
The pending regulations follow an initial proposal made in summer 2023 and a subsequent public comment period.
The draft proposal called for an industry fleet-wide average of approximately 58 miles per gallon for passenger cars and light trucks (like SUVs) in 2032.
According to NHTSA, that would be a 2% year-over-year increase for passenger cars and a 4% year-over-year increase for light trucks. Republicans have vowed to fight it, while Democrats say the goal is reachable with high EV sales.
The new emissions ruling and the fuel-efficiency standards “have different objectives, but they're supposed to work together to make the auto sector and the transportation sector cleaner,” said Stevens, of MICHAuto.
Detroit automakers are planning dozens of EV rollouts over the next five years and they’re actively participating in talks about the regulations, he added.
“They clearly have very strong voices in Washington.”
Prices, charging stations remain barriers for buyers
Despite the enthusiasm for EVs among Biden administration regulators and manufacturers, consumers are still catching up, with costs and ease of refueling giving many pause.
Still, 70% of US consumers are considering buying an electric vehicle, according to a report released this week from Boston Consulting Group. Of them, 38% say they plan to purchase an EV as their next vehicle.
“The next wave of EV adopters in the US wants lower prices and has higher expectations for performance, variety, and access to high-speed chargers than current owners,” the report said.
Manufacturers are starting to meet them at lower price targets. In 2022, the average price of an EV was about $61,000, compared to $50,000 for all passenger cars and trucks. The average price today is about 20% lower, or $55,353. Tesla, Ford Motor Co. and others have cut prices, though that move isn’t helping EVs reach profitability for manufacturers other than Tesla.
Many variables remain in lifetime costs for EVs, with some scenarios making the total price tag more expensive than petroleum-fueled vehicles, according to a recent University of Michigan study.
So far, the U.S. has more than 170,000 public charging ports, the White House said in January, an increase of about 70% since President Joe Biden took office.
The attention to public chargers comes as range anxiety — or concerns about frequent charging — keep potential buyers from the EV marketplace.
Access on the road is only part of that concern: About 29% of EV owners do not have a charging station installed at their residence, according to a 2023 survey by FLO, a charging network operator with offices in Auburn Hills.
That can influence costs, too, since at-home chargers can reduce “lifetime costs by $10,000 on average, and up to $26,000, even when including the cost of installing a charger,” the U-M study found.
Michigan, meanwhile, is planning to add chargers around the state. A $23 million federal grant awarded in February will add more than three dozen to areas near the state’s highways. The state publishes a map of available charging stations. They include 480 that are publicly accessible and 146 private charging locations.
Michigan is still attracting non-production EV jobs
Michigan’s engineering and tech-centered automotive industry expertise continues to be a draw for EV-related job growth.
A recent example is Lucid USA, a luxury EV manufacturer that expects to invest up to $10 million to establish an office in Southfield. The Michigan Strategic Fund Board voted in February to offer a $6 million subsidy to the company if it meets its goal of hiring 262 people.
Of those, about 200 workers will be engineers, with much of the office dedicated to research and development. The automaker is American-based, but backed by a Saudi Arabian investment fund.
Other EV makers establishing or increasing their footprints in Michigan over the past year or so include Bollinger Motors and Scout Motors (which just broke ground on a 200,000-square-foot factory in South Carolina).
Other companies are setting up multiple locations with several types of non-production jobs. Among them is ATC Drivetrain, Inc., which is opening an “EV Center of Excellence” in Holland.
“We continue to have a robust, and growing pipeline of projects looking to Michigan to establish their EV footprint,” Otie McKinley, spokesperson for the Michigan Economic Development Corp., said Friday.
The gains are important to Michigan even as it seeks EV manufacturing jobs, too.
However, wages for auto production work — particularly at suppliers — has declined in value when compared to the U.S. average. Income gains in Michigan are coming from the engineering jobs and related professional positions.
The recent job promises may help to offset some job losses among the Detroit Three as they adjust their capacity and expenses. Salaried reductions have hit GM and Ford, while Stellantis announced 400 tech and engineering layoffs on Friday. Many are in Michigan, where it makes its North American headquarters.
Michigan’s auto industry leaders, meanwhile, remain concerned about developing talent to keep jobs in the state.
“We just need more technical talent, particularly in the software development and encoding standpoint,” Stevens told Bridge. “These vehicles continue to be more and more electronic, (with) more and more connectivity.”
The U.S. EV industry is watching other countries like China and Mexico
Michigan-based automakers General Motors and Ford once turned to overseas markets to boost sales, but those dynamics are changing with EV growth.
Ford, for example, had a 2% market share in China in 2022, down from nearly 4% in 2016. General Motors’ market share dropped below 10% from 15% in 2016.
While those legacy companies balance the costs of parallel propulsion products — gas-fueled and electric vehicles — other makers appear poised to sell their EVs in the U.S., leaving market share victory up for grabs.
More Chinese automakers will be looking at North America for sales opportunities, most analysts agree. One move this year involved startup BYD, China’s top-selling EV maker, which is considering a factory in Mexico, Reuters reported in February.
The move is significant because BYD outsold Tesla in late 2023. The automaker also introduced a model selling at under $17,000 about one-third of the U.S. average EV price.
However, the global slowdown extends to China, the world’s largest vehicle consumer, as companies seek a sales foothold while the volume of sales dips.
Various reports indicate the sales pace is leaving EV battery producers — still largely based in Asian countries — struggling for profits.That too has implications for Michigan, where LG Chem in November laid off workers even while continuing a major expansion.
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March 23, 2024 at 03:48AM
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Michigan's auto industry awaits an EV revolution in flux - Bridge Michigan
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