The One Big Beautiful Bill Act Will Crash America’s EV Market

In this episode of Electrify This! host Sara Baldwin speaks with Mary Nichols, celebrated leader on clean air and transportation, about a timely topic for all Americans––clean energy, EV’s, reliable and affordable energy, and what repealing these supporting policies would look like for our wallets, air and clean future.

Sara Baldwin: I'm your host, Sara Baldwin, Senior Director of Electrification with Energy Innovation. Hello and welcome to another episode of Electrify This!—a podcast focused on electrification as a tool to cut climate pollution and invigorate our economy. Today's episode, The One Big Beautiful Bill Act and other federal repeals will crash America’s EV market.

Today we are going to wade through the myriad federal actions that are upending progress made on clean electric vehicles that save people money and clear the air we breathe. To be honest, it’s a bit dizzying to keep track of everything, and there isn’t much good news at this juncture. But we’re going to parse through it to better understand what is going on.

My guest today is Mary Nichols. She's the former chair of the California Air Resources Board and a former director of the UCLA School of Law Emmett Institute on Climate Change and the Environment, where she now serves as Distinguished Counsel. She's a renowned leader on clean air and transportation and was awarded the Attorney of the Year Award from California Lawyer Magazine for her contributions to environmental law, among many other accolades too numerous to list. Welcome to the show, Mary. It's an honor to have you on the podcast.

Mary Nichols: Thank you, it's a pleasure to talk to you.

Sara: Mary, you've had an illustrious career working on climate and clean air and the environment. You've worked in a range of positions for the state of California, the EPA, city government, law, non-profits, and academia. I'm curious what are you working on and really focusing on right now?

Mary: So I no longer have one job, with all the responsibility that comes with running a large governmental organization. I have many small jobs, mostly volunteer. But what ties it all together for me is the desire to be useful and have an impact on the rising generation of activists who are working in the air pollution and climate space to help people think more broadly and in a more interdisciplinary way than we all have a tendency to do, because I think that's essential to dealing with the obstacles that we clearly face in terms of making big changes happen. And so my primary focus really is at the UCLA Emmett Institute, where I can work with students and faculty members and legislators and community members from a base in academia, where I have access to all of the energy and bright minds and other wonderful resources that you find in a major university. In terms of the substance of what I do, it's still primarily the public health and climate issues that keep me getting up in the morning.

Sara: Same here and, yes, your contributions on so many of these topics has been so impressive and you've really helped pave the way for so many people. As someone who's been in the driver's seat on major policy changes that have paved the way for clean vehicles in this country, how would you characterize the US EV market over the past ten years (the time that we've seen really the biggest growth)?

Mary: Well, as you said, it's been a time of big growth. We went through a situation where the California Air Resources Board (or CARB) initially had to mandate the auto companies to build electric cars using the power that we have under the Clean Air Act to set very aggressive emission standards based on California's unique air quality problems. And we have seen the manufacturers, overall, respond as well as one could imagine in terms of putting their resources and their innovation skills into creating attractive vehicles that people want to buy. So, in that sense, we've been very successful. We have not completely solved the “fuel problem”—that is, the availability of the electricity needed to power the vehicles, which is still a weaker spot in terms of being able to build the market as quickly as we would like.

So it's been a longer and harder slog, made difficult by the fact that the regulatory regime for electrification is very divided, in terms of the industries and the bureaucracies that exist, to promote the change. It has taken longer than we would like see it happen. But we're finally on the way, and there's just no question in my mind that we are going with electric transportation. It's just a question of how quickly and how affordably we're going to be able to do it.

Sara: There is no question this is the future, but we may hit a speed bump or two. I'd love for you to talk through the things happening right now that could upend the U.S. EV market.

Mary: The biggest threats to what I would describe as an inevitable transportation transformation is a complete 180 policy shift at the federal level in Washington, with the President and apparently the majority of the Republican political establishment staking out a position that electricity is either unnecessary or a wrong way to go. Either it's because the excuse for that is either that it's addressing a problem, (climate change) that they don't believe we should really be bothering to address. It does hark back to the fact that we have a home-grown industry in terms of the production and distribution of gasoline and vested interests in those companies and those technologies. Even though they will mostly acknowledge that their days are numbered, they want them to be numbered as long as possible. They are not going to just fold up and go away. They won't unless they're paid to do it. And so, they're looking to extend the subsidies that they've enjoyed for many years, which include not only financial subsidies, tax breaks, etc. But, frankly, also the subsidy that we all pay in terms of our lungs and of the pollution of our cities and of our atmosphere because of burning their product.

Sara: I want to talk about what happened in May: Congress revoked California's waiver, which it has had and is authorized to have under the Clean Air Act, and this was done sort of in spite of longstanding Senate traditions. They voted to revoke California's waiver to enact its advanced clean cars, truck, and fleet standards. Can you talk us through why the revocation of this waiver is so impactful and why Congress's actions are so unprecedented, and then we can talk a little bit more about the implications for California and other states.

Mary: The first National Clean Air Act was passed in 1970, which is still in effect today, and since then California has enjoyed a unique position in our country as the only state that is allowed to set standards for vehicles and not have them be subject to federal control. If California can show the need for stricter (but feasible) standards, they get a waiver of federal preemption. This system has been in effect ever since 1970 and has resulted in California applying for and receiving hundreds of waivers to carry out its own program.

California has a severe air pollution problem, more serious than any other state in the country. In addition, California is a large market for vehicles and uniquely well-positioned to carry out standards effectively. Not only does the state buy a lot of cars and trucks, it has a technical competence in automotive technology. Our standards have then become the norm in other states and in many other countries in the world.

The standards being attacked are those promoting zero emission vehicle technologies for cars and trucks—needed not just by California but by the world. To make meaningful progress on mitigating global warming, we must turn to zero emission vehicles and zero emission transportation.

Overall, I do think it's important to make it clear that this is not the end of California's ability to set more stringent standards or for the other states that have adopted those standards to benefit from them as well. But, we have to go back to the drawing board with a new set of regulations, unless we can succeed in overturning the congressional action through the courts, which is something that California is now pursuing very aggressively with the support of our Governor and Attorney General.

Sara: Thank you, that was a helpful overview and helped translate what's at stake here. So, let's talk a little bit more about the implications for California and other states that have adopted California standards. There are over a dozen states that have adopted Advanced Clean Cars (ACC). Several others have adopted Advanced Clean Trucks (ACT). Let’s talk a little bit about more about what states can do to keep pushing forward despite these Congressional actions.

Mary: States run their own vehicle registration systems. It is large toolbox, and people are just now kind of looking at what set of tools are going to work best for them.

Sara: It's easy to feel despair in the face of so many of these abrupt changes, but it is a good reminder that states and local governments have authority over many facets impacting vehicle markets and air regulation. I'll be interested to see how states respond and what states pick up the baton and keep moving.

Let’s pivot and talk about another fun topic: the One Big, Beautiful Bill Act. It is too early to know what the final bill is going to look like. It's passed through the House. It's now in the Senate in deliberation. Of the provisions in the House version of the bill, which are the most concerning to you when it comes to the EV market and the US (and really when it comes to consumers' ability to purchase affordable, clean cars and trucks)?

Mary: Repealing the long-standing federal tax credit for purchases of new electric vehicles signals to consumers that the federal government is no longer supporting this technology. The overall economic policy is a direct hit at our automotive industry and its ability to keep on making and marketing vehicles at a price that is becoming more affordable for more people.

In addition, the elimination of support for build out of the electric charging network—our backbone for making it possible and convenient for people to drive electric vehicles—and halting ongoing grants and programs are all seriously disruptive.

I don't want to sound like I think everything is okay. If I left that impression. I really don't mean to do that. I believe we must keep working and keep putting our feet in front of each other, finding ways to make progress. But that doesn't mean that we're not facing a difficult and hostile environment to try to make these changes happen.

Sara: It's a good reminder that this is neither a sprint, nor a marathon. This is an ultra-marathon, or maybe three back-to-back. So, we’d better have some good shoes. It's going to be a long haul.

I want to talk about the U.S. EPA and the Department of Transportation. Both agencies are announcing and making moves to undo progress on clean vehicle tailpipe standards and fuel economy standards. We know these standards set a level playing field for all vehicles and all manufacturers, which helps bring down the cost and helps accelerate the transition. What do you expect to happen with these regulations?

Mary: The administration will try to repeal existing regulations which have been enacted under the mandates of the Federal Clean Air Act and of the Energy Policy Act. They will have to do that through a rulemaking process, which means they must follow the requirements of the Administrative Procedures Act, including providing a technical rationale for their actions, having public notice and comments on the rules, and responding to the comments. In other words, repealing a regulation requires just as much work as adopting a new regulation, so this cannot be done quickly. They are also subject to litigation and congressional review. So we have some processes just starting, but I think there's room to challenge these deregulatory efforts.

Sara: Well, these are hard times for transportation electrification and climate and many other things right now. Where do we go from here? This is obviously not the first time that the U.S. EV market has hit speed bumps. You've done so much in this space and have seen the ebbs and flows, so I would love for you to share any advice or insights on what's needed to sustain this momentum for clean vehicles despite these headwinds.

Mary: I think the first thing to note is that electric vehicles are great. We're not trying to sell people a product that they don't want, and we know from experience that when people have an opportunity to drive these vehicles, they love them. They don't just love them because they're good for the environment or good for the planet. They love them because they are fun to drive, and so that is a baseline that you get to start from, which is that we have vehicles out there that deserve to succeed in the marketplace and that will succeed in the marketplace if they're given a chance.

Producing enough of the “fuel” needed to make these vehicles competitive is a challenge we must work on, focusing as much on finding ways to make charging easy, available and comfortable as it is on the vehicles themselves.

I think it's also important to figure out more ways in which electric vehicles become an integral part of the system, not just a niche or a nice-to-have.

Transportation isn't just about emissions or just about jobs. It's also about how our cities work, how our whole economy works, and building into that a more holistic approach to doing things in a way that minimizes the emissions of greenhouse gases and optimizes the efficiency of our power system overall is going to be necessary. So, while we're in this state of confusion or backsliding, I think is a really good time to be amassing the tools and the political and policy energy to take bigger, broader steps going forward and not just to rely on, emissions regulations or incentives, but also to look at sort of where we're headed overall in our economy.

Sara: That is an excellent vision for what's ahead, and this hard work needs to continue. And, it is not going away, as you said. Mary, this has been a delightful conversation. Thank you so much for carving out time and for all your contributions during your illustrious career. It is a pleasure to speak with you, and I wish you all the best and hope we have the chance to meet in person sometime.

Mary: Thank you, Sara! Keep on doing what you're doing.

Electrify This! is an Energy Innovation original podcast. Energy Innovation is a nonpartisan energy and climate policy think tank. We provide customized research and analysis to decision makers to support policy design that reduces emissions at the speed and scale required for a safe climate future.