Court Voids Biden-era EV Efficiency Rule

By Jonathan Stempel

(Reuters) – A U.S. appeals court voided a Biden administration rule regarding the petroleum-equivalent fuel economy of electric vehicles (EVs), marking a win for 13 Republican state attorneys general who argued that the rule exaggerated EV efficiency.

The 8th U.S. Circuit Court of Appeals in St. Louis determined that the Department of Energy overstepped its authority by proposing to phase out from 2027 to 2030 a “fuel content” factor that inflated EV fuel economy metrics, instead of eliminating it completely.

Circuit Judge Duane Benton indicated that the department did not adequately inform the public of the alternatives considered when soliciting comments for the March 2024 rule, thus limiting the ability of commenters to provide “informed criticism.”

The petroleum equivalency is a critical component in assessing whether manufacturers comply with the Department of Transportation’s corporate average fuel economy (CAFE) standards.

The final rule was less stringent than an initial proposal, but the Energy Department claimed that maintaining the fuel content factor would likely spur EV production in the short term while also “accelerating the widespread adoption of EVs in the United States during this pivotal time.”

With Iowa leading the challenge, the 13 states along with the American Free Enterprise Chamber of Commerce asserted that the inflated efficiency claims negatively impacted the production of less-efficient gas-powered vehicles, thus increasing greenhouse gas emissions and allowing manufacturers to meet CAFE standards.

They also argued that the rise in EV sales escalates road maintenance costs due to the heavier weight of EVs, which cause more wear and tear on infrastructure.

Both the Energy Department and Iowa Attorney General Brenna Bird’s office were unavailable for immediate comments.

Other states opposing the rule included Arkansas, Florida, Idaho, Kansas, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, Texas, and Utah.

The oral arguments occurred just five days before Republican President Donald Trump began his second term.

The case is Iowa et al. v. Wright et al., 8th U.S. Circuit Court of Appeals, No. 24-1721.