Overshadowed by the Biden administration’s new tailpipe emissions rule, the Department of Energy finalized changes last month to a little-known calculation that could dramatically impact automakers’ ability to sell gas-powered cars and trucks.
The changes to the calculation, known as “petroleum equivalency factor,” will significantly cut the miles-per-gallon rating for electric vehicles, even after the Biden administration scaled back its initial proposal and added a phase-in period. After the phase-in ends in 2030, MPG ratings for EVs will be about 65% lower.
“I think very few people understand it, and understand the impact and the math behind it,” said Shea Burns, an automotive regulatory expert for AlixPartners. The change is “as impactful, if not more impactful” than upcoming fuel economy regulations.
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