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Latin American Geothermal Investments Set to Surge

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The U.S. Looks To Lower EV Mileage Ratings  

The U.S. administration is considering slashing the mileage ratings for electric vehicles (EVs) to meet fuel economy regulations for automakers, in a major overhaul of the Corporate Average Fuel Economy (CAFE) program.  

The U.S. Department of Energy is looking to reduce significantly the way petroleum-equivalent fuel economy for EVs is being calculated, which could mean that automakers need to sell more low-emission cars.  

If carmakers cannot meet CAFE rules, they either buy credits or pay fines.

Vehicles are ranked by their EPA combined city/highway rating. All-Electric vehicle fuel economy is estimated in Miles Per Gallon equivalent (MPGe), where 33.7 kWh equals to 1 gallon of gasoline.

“Encouraging adoption of EVs can reduce petroleum consumption but giving too much credit for that adoption can lead to increased net petroleum use because it enables lower fuel economy among conventional vehicles, which represent by far the majority of vehicles sold,” said DOE in the proposed regulation.   

“Moreover, contrary to the original intent behind the fuel content factor, “excessively high imputed fuel economy values for EVs” can also act as a disincentive to manufacturers to produce additional EVs if manufacturers can achieve CAFE compliance with a relatively small number of EVs,” DOE said in the proposed rule.

The Alliance for Automotive Innovation (Auto Innovators) requested that DOE take careful consideration in determining whether to slash the EV mileage ratings, according to DOE’s proposal published today.

The alliance requested an increase in the ratings if they are changed, counter to the requests of other commenters.  

“Auto Innovators stated that Congress's intent has been to incentivize the use of alternative fuel vehicles. They suggest that an increased value for the PEF would result in higher sales of electric vehicles that would substitute for petroleum-fueled vehicles, as automakers would have a greater regulatory incentive to sell the electric vehicles,” DOE said.

DOE will accept comments regarding the rule on or before June 12, 2023.

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By Tsvetana Paraskova for Oilprice.com

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  • Mark Markhughw on April 11 2023 said:
    From what I read about real usage mileage, which includes when you turn on the headlights, heating and AC, mileage estimates are inflated by about 20-25%. Since gas taxes pay for a lot of road building and maintenance, EVs need to pay their fair share probably through annual registration fees based on vehicle weight; I would suggest a 5% tax on the amount over 2,000 pounds so that it is a progressive tax.

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