Grassley: Biden Admin’s EV Push Could Drive up the Deficit by $200 Billion

Letter

Dear Administrator Regan:

In April 2023, the Environmental Protection Agency (EPA) proposed a rule imposing new
vehicular emissions standards for criteria pollutants and greenhouse gases (EV Rule).

These new standards extend the EPA’s existing emissions standards for passenger cars and light trucks for model years 2023 through 2026.

The EPA expects that by 2030, compliance with these new standards will result in at least 60% of new passenger vehicles sold in the U.S. being electric vehicles.

The EPA’s legal authority to propose this rule is questionable and it has been recently
revealed that its cost to the taxpayer is much higher than anticipated.

However, these are not the first concerns I have raised regarding this EV Rule. I wrote to
the EPA multiple times last year expressing my concerns. For instance, I wrote to the EPA on
June 23, 2023, inquiring into the human rights and national security implications of this rule.

Namely, that an increased demand for lithium-ion batteries would increase the demand for
production in foreign mines that consistently exploit workers (often children) and would increase
our dependence on China, which produces 77% of the world’s batteries.

When EPA failed to answer my questions in their response, I sent a follow-up letter on September 27, 2023. The EPA has failed to respond to that letter. I also wrote to the EPA on June 27, 2023, expressing my concern about the inconsistencies between this proposed rule and the EPA’s proposed power plant rule. With one rule the EPA seeks to increase the burden on our power grid and with the other, it limits the grid’s reliability. When EPA failed to answer my questions in their response, I sent a follow-up letter on September 19, 2023. However, EPA failed to answer my questions in its December 11, 2023, response.

And now, new information has come to light that causes additional concern about this
proposed rule. The Congressional Budget Office (CBO) released its ten-year budget and economic
outlook on February 7, 2024, which projected a $224 billion increase in the cumulative deficit
caused by higher electric vehicle tax credit claims and reduced gas tax revenues.
10 CBO made sure to note that EPA’s market-shifting EV Rule is the largest factor contributing to these revisions.

Many are recognizing these and other issues and have called for the EPA to change course
from enacting this EV Rule. For example, over 4,000 auto dealerships wrote to President Biden
in November 2023, asking him to “slow down [his] proposed regulations mandating battery
electric vehicle (BEV) production and distribution.”12 They wrote, “[w]ith each passing day, it
becomes more apparent that this attempted electric vehicle mandate is unrealistic based on current and forecasted customer demand. Already, electric vehicles are stacking up on our lots which is our best indicator of customer demand in the marketplace.”13 Allegedly, President Biden failed to respond to the dealers’ letter.14 Further, a new letter from nearly 4,700 dealerships reads, “Mr.President, our letter in November asked that you tap the brakes on the electric vehicle mandate. We now ask that you hit the brakes. It is uncontestable that the combination of fewer tax incentives, a woefully inadequate charging infrastructure, and insufficient consumer demand makes the proposed [EV Rule] completely unrealistic.”15 Even EPA’s once-supportive United Auto Worker base has expressed its disapproval.

Finally, it is chiefly concerning that the EPA is proposing this rule apparently without clear
legal authority. Just two years ago, the Supreme Court held that EPA did not have the legal
authority under the Clean Air Act to pass its power plant rule, which was a similar attempt to force
the market where EPA wanted it to go. Chief Justice Roberts and the majority wrote that the
EPA was attempting to “substantially restructure” the energy market and could not “point to
‘clear congressional authorization’ to regulate in that manner” to satisfy the “major questions
doctrine.” The Court held that “[a] decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.”

The Chief Justice wrote that, “Congress certainly has not conferred a like authority upon EPA
anywhere else in the Clean Air Act.”
The American taxpayers have not voted for and can’t afford the EPA’s proposed EV Rule.
Accordingly, for Congress to better understand the Biden administration’s plan to take
responsibility for the consequences of its proposed rule, please provide answers to the following
questions by March 29, 2024:
1. What legal authority and “clear delegation” from Congress is EPA relying on to propose
this EV Rule? Explain in detail.
2. How does the Biden administration intend to make-up the $151 billion revenue loss
caused by the EPA’s EV Rule? Provide all calculations and records.
3. How does the Biden administration intend to make-up for the $73 billion in additional
EV tax credit spending? Provide all calculations and records.

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