Big Oil Is Unhappy With The EPA’s New Rules

By automotive-mag.com 10 Min Read

The shift to electric vehicles is happening. We’ve known it for a while, and automakers have all but given in to the governmental and consumer pressure by committing to adding battery-powered cars to their fleets (or, in some cases, completely committing to fleet-wide electrification). That hasn’t exactly gone over smoothly with big oil, and now the EPA’s new ruling on tailpipe emissions—despite being more lenient on acceptable levels of pollutants—could prompt a long legal battle.

Welcome to Critical Materials, your daily roundup for all things EV and automotive tech. Today, we talk about petroleum’s potential fight against the EPA’s new emissions rules, Ford’s new dealer pricing policy for EVs and a recall for EVs made by Hyundai, Kia, and Genesis.

30%: Big Oil is Unhappy With EPA’s New Lenient Rules

Automakers are feeling better after the U.S. Environmental Protection Agency unveiled its final emission rulings through 2032 this week. The EPA’s final rule is more lenient than initially anticipated, giving automakers the option to move forward with a less aggressive rollout of electrified vehicles by dialing back emissions-reduction targets.

Ultimately, automakers will still have to meet a notable reduction in emissions by 2032. The end goal of 85 grams of CO2 per mile is just 3.7% away from the agency’s original target of 82 grams. But the ramp to get there is less steep, giving automakers more time to hit the harder targets.

EPA Targets

Manufacturers will eventually have to shift towards cleaner vehicles to meet the emissions targets set by the regulatory agency despite these more lenient requirements. This shift— combined with efforts from states like California to end the sale of gas cars within its borders by 2035—has oil industry trade groups up in arms. 

More specifically, American Fuel & Petrochemical Manufacturers (AFPM)—which includes members like Chevron, ExxonMobil, Marathon, and Valero—is expected to fight back the EPA’s rulings. The group has been fighting more restrictive revisions to the EPA’s guidance since 2018. Earlier this year, it launched a seven-figure smear campaign ahead of the final ruling which deemed it as a “gas car ban” despite it not actually outright banning combustion-powered cars.

AFPM isn’t the only trade group that has the EPA’s ruling in its sights. Mike Sommers, CEO of American Petroleum Institute (API), the largest trade group for the oil industry in the U.S., said that it plans to “do everything it can to stop the rule.”

Here’s a joint statement issued by Sommers and AFPM CEO and President Chet Thompson:

At a time when millions of Americans are struggling with high costs and inflation, the Biden administration has finalized a regulation that will unequivocally eliminate most new gas cars and traditional hybrids from the U.S. market in less than a decade. As much as the President and EPA claim to have ‘eased’ their approach, nothing could be further from the truth. This regulation will make new gas-powered vehicles unavailable or prohibitively expensive for most Americans. For them, this wildly unpopular policy is going to feel and function like a ban.

Whether you’re a Republican or Democrat, Congress has to make a decision whether to protect consumer choice, U.S. manufacturing workers and our hard-won energy security by overturning this deeply flawed regulation. Short of that, our organizations are certainly prepared to challenge it in court.

Whether or not these groups succeed in challenging the rulings, automakers are likely already on the way to compliance. Many manufacturers have already committed to wide-scale electrification, which would sharply reduce the fleet’s CO2 output.

60%: Ford EVs Get Competitive: Dealers Permitted to List Below MSRP

Ford F-150 Lightning

In a new policy change, Ford will now allow dealers to list the Ford F-150 Lightning, Mustang Mach-E, and E-Transit below MSRP.

The Blue Oval previously barred dealerships from listing either electric vehicle below MSRP—something that wasn’t really an issue given that demand was through the roof. In fact, dealers not only listed the vehicle at MSRP, but also often attached hefty markups.

It’s important to note that Ford has technically always allowed dealers to sell the vehicle for whatever price they chose, however, the Minimum Allowable Advertised Price (MAAP) policy didn’t allow for dealers to advertise the vehicles to the public at that price. But Ford has been shaking up its pricing policies since December when Ford changed its Minimum Allowable Advertised Price policy.

The new policy permitted dealers to advertise the Mustang Mach-E below MAAP, but not any of Ford’s other EVs. Now, a new service bulletin obtained by CarsDirect reveals that Ford has dropped the MAAP requirement for both the F-150 Lightning and E-Transit too. This will allow dealers to list all of Ford’s current EV models at the price of their choosing, effectively allowing for a more competitive sales market.

The EV market is growing increasingly cutthroat, and that’s not about to let up any time soon. Ford has since been working to combat this by strategizing a more aggressive approach to its pricing, including lowering the price of its EVs and changing the way it invoices its vehicles to ensure that a margin of dealer holdback—that’s the money an automaker pays a dealer when it sells a car—was included in the vehicle invoice rather than work it out based on a complex formula. Since consumers now know that margin, it might be possible to negotiate even better prices, so as long as the dealer is willing to play ball.

Either way, this is a good sign for the consumer. A more competitive market with transparent pricing means that consumers will have more affordable access to EVs.

90%: Hyundai and Kia Will Recall 147,100 U.S. Vehicles Over Damaged Charging Unit

2024 Kia EV6

Hyundai, Kia and Genesis are set to recall a combined 147,100 vehicles in the U.S. over a unit responsible for charging the vehicle’s battery that can become damaged.

Hyundai is set to recall 98,878 units across its Ioniq models and Genesis-branded vehicles, while Kia will recall 48,232 EV6s.

The part in question is the car’s Integrated Charging Control Unit (ICCU) which charges the car’s 12-volt battery. The unit can become damaged and stop charging the 12-volt battery, which may result in a loss of power while driving.

Here’s how Kia describes the problem in its official recall notice:

The Integrated Charging Control Unit (ICCU) may become damaged over time from transient high voltage and thermal cycling. A damaged ICCU may not be able to charge the 12-volt battery which can discharge gradually while driving with progressive reductions of motive power. If the driver ignores the warnings associated with the discharging battery condition and continues to operate the vehicle in a reduced power mode, the vehicle may eventually experience a complete loss of motive power.

Dealerships will inspect the ICCU and ICCU fuse to determine if it sustained any damage and replace it if necessary. If no damage is present, the fix is simply a software update. The recall notice indicates that an improved ICCU software will decrease thermal loading and reduce peak voltage in order to mitigate damage to the unit.

100%: Would You Pay a Dealer Markup?

Nissan starts using BEV Class 8 trucks to deliver cars to dealerships in the LA area

It wasn’t long ago that I was trying to buy a Toyota Supra. No matter the dealer I went to, each one added an astronomical markup to the car. I couldn’t bring myself to buy one out of principle (let alone immediately being upside-down on the loan).

I know I’m not alone here. Markups were everywhere last year. And while it’s cooled down, thousands of Americans undoubtedly paid well over sticker for their vehicle for whatever reason—whether that be necessity, want or just bad timing.

So I ask you: have or would you pay a dealer markup? And if so, under what circumstances? Let me know in the comments. 

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