From MasterResource

By Steve Goreham

“A recent survey by the American Automobile Association (AAA) found that only 16% of potential buyers were either “likely” or “very likely” to buy a fully electric vehicle as their next car, … down from 25% in 2022 and was the lowest level of EV interest recorded by AAA surveys since 2019.”

The road to adoption of Zero Emissions Vehicles (ZEVs) is growing steeper. For over two decades, states used incentives and mandates to try to force a transition from gasoline vehicles to ZEVs. But softening market demand, shifting federal policies, and poor economics threaten to halt the ZEV revolution in the United States.

Zero Emissions Vehicles are cars and trucks that produce no tailpipe emissions. These are either electric vehicles (EVs) or hydrogen vehicles. California is the only state with a significant number of hydrogen cars, but its hydrogen car population is declining, so ZEVs mean EVs in practice.

Air pollution reached hazardous levels in the 1950s. The expanding population and automobile fleet in Los Angeles generated recurring episodes of smog, reducing visibility, causing nausea, and burning eyes. As a child, I recall having our car windows coated by pollutants from the steel mills of Gary, Indiana during a drive-by, forcing us to stop to clean our windshield.

To combat worsening air pollution, all states enacted legislation by 1970. Congress passed the Clean Air Act in 1963 and established the Environmental Protection Agency (EPA) as part of the Clean Air Act of 1970.

Early vehicle pollution regulations were enormously successful eliminating harmful vehicle exhaust. Unleaded gasoline, catalytic converters, and particulate filters dropped volatile organic compound emissions per mile by 98 percent from 1970 to 2023. Carbon dioxide (CO2) and water vapor remain the only significant gases exhausted from today’s gasoline vehicles.

With hazardous emissions all but eliminated, the primary purpose of ZEV regulations is to force a transition to electric vehicles to reduce greenhouse gas emissions, primarily CO2. The first Zero Emissions Vehicle regulation was adopted by California in 1990. Today, 22 states have ZEV regulations, many requiring up to 100 percent of new car sales to be EVs by a future date, such as 2050. But the US ZEV transition has stalled due to three factors—weakening demand, changing federal policies, and poor economics.

The US market share of Battery Electric Vehicles (BEVs) in the second quarter of 2025 was only 7 percent of car sales, down from over 8 percent during last November, December, and January. BEV share in the US has been flat since spring 2023.

A recent survey by the American Automobile Association (AAA) found that only 16% of potential buyers were either “likely” or “very likely” to buy a fully electric vehicle as their next car, while 63% were “unlikely/very unlikely.” The “likely/very likely” category was down from 25% in 2022 and was the lowest level of EV interest recorded by AAA surveys since 2019.

Under President Joe Biden, the federal government provided a wide array of tax credits, subsidies, and loans for EVs. President Donald Trump shifted policy efforts to “eliminate the electric vehicle mandate,” including ending subsidies and mandates and rolling back state ZEV regulations.

Congress passed the One Big Beautiful Bill Act and President Trump signed it this month. The act eliminates tax credits for purchasing a new EV (up to $7,500) and a used EV (up to $4,000), effective September 30 of this year. Loss of tax credits will increase the cost of EVs, likely forcing US EV market share below 7% by the end of this year.

The 1970 Clean Air Act assigned responsibility for air pollution to the EPA but allowed the EPA to grant waivers to states for regulations that were stricter than federal limits. California has received more than 100 waivers under the Clean Air Act. Other states are allowed to adopt California pollution regulations. State ZEV standards require a waiver from the EPA.

But in June, President Trump signed three resolutions that rescinded California’s ZEV mandates. The principal resolution revoked the Clean Air Act waiver to California that was granted during the Biden administration. The waiver had allowed the state’s Advanced Clean Cars II regulation, which mandated that all light vehicles sold in California by 2035 must be zero emissions. The waiver also allowed Colorado, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Washington, and other states to adopt California’s regulations.

Another resolution signed by President Trump rescinded the EPA waiver that authorized California’s Advanced Clean Fleets regulation, which began January 2024. The ACF forced new heavy-duty trucks registered in California to be zero-emissions. Prior to the Trump rollback, trucking companies wrestled with severe cost, weight, and vehicle range issues of electric trucks mandated by the regulation.

California immediately sued the federal government to restore the EPA waivers and revive ZEV mandates. But without a legal victory, state ZEV mandates are dead in the US, at least until a new federal administration is elected.

Without federal tax credits and state ZEV mandates, vehicle purchasers face the full brunt of the unfavorable economics of EVs.  Advantages of EVs include the ability to charge at home and lower cost of operation for small daily travel distances. But their economic disadvantages include higher purchase prices, heavier vehicle weight, shorter driving range, higher maintenance and repair costs, higher insurance costs, and rising licensing fees.

The average US electric car purchase price in May was $57,734, about 17% higher than the average price for a gasoline car. Cancellation of the EV purchase tax credit will push this difference to over 20%. Electric trucks and buses are two to three times as expensive as diesel alternatives.

Thousand-pound EV car batteries are needed for a driving range approaching that of internal combustion engine (ICE) cars. As a result, EVs tend to be about 50% heavier than ICE cars. The 2024 Chevy Silverado EV weighs over 8,000 pounds, a four-ton pickup truck! Greater weight means that tires wear out sooner, raising maintenance costs. States receive no gasoline taxes from EVs, so states are now imposing EV license fees for road maintenance. EV road fees should be higher because of their weight.

Hertz Rental purchased 60,000 EVs, but found that maintenance, repair, and insurance costs were higher than ICE rentals, so they sold much of their EV fleet. An EV battery damaged in a collision must be replaced, a $5,000 to $20,000 charge. US insurance rates for EVs may be 70% higher.

Poor market demand, a halt to federal EV tax credits, the rollback of state ZEV regulations, and higher economic costs threaten to halt the ZEV revolution.

——————

Steve Goreham is a speaker on energy, the environment, and public policy and author of the bestselling book Green Breakdown: The Coming Renewable Energy Failure. His previous posts at MasterResource are here.

From Energy.gov

The Department of Energy today announced the Loan Programs Office has terminated its conditional commitment for the Grain Belt Express Phase 1 project.

Energy.gov

WASHINGTON— The Department of Energy (DOE) today announced the Loan Programs Office (LPO) has terminated its conditional commitment for the Grain Belt Express Phase 1 project, a high-voltage direct current (HVDC) transmission line intended to connect wind and solar capacity across Kansas and Missouri. The conditional commitment, which would have provided a taxpayer-funded loan guarantee of up to $4.9 billion dollars, was issued by the Biden administration in November 2024 – one of many conditional commitments that were rushed out the door in the final days of the Biden administration.

After a thorough review of the project’s financials, DOE found that the conditions necessary to issue the guarantee are unlikely to be met and it is not critical for the federal government to have a role in supporting this project. To ensure more responsible stewardship of taxpayer resources, DOE has terminated its conditional commitment.

DOE is conducting a review of every applicant and borrower – including the nearly $100 billion in closed loans and conditional commitments LPO made between Election Day 2024 to Inauguration Day 2025 – to ensure every single taxpayer dollar is being used to advance the best interest of the American people. This ongoing review positions LPO to move forward with a lower risk tolerance in lending practices and an uncompromising focus on expanding access to affordable, reliable and secure energy for the American people.

DOE remains focused on advancing projects that expand American energy dominance and deliver on President Trump’s commitment to lower energy prices for the American people.

###