Cars are getting more efficient and less polluting, resulting in better air quality for everyone, according to a new report from the Environmental Protection Agency. But with a new administration coming in that has made climate change and air pollution less of a priority — and drilling for more fossil fuels more of one — it’s unclear how sustainable this trend will be.
In the US, new model cars are traveling further on less gas, the EPA reports. Real-world fuel economy improved by 1.1 miles per gallon of gasoline to a “record high” of 27.1 mpg for model year 2023 vehicles. That’s an improvement of 13.1mpg since 1975, when the EPA first began gathering fuel economy data.
These gains in fuel economy do not take into account the EPA’s new, stricter tailpipe emission standards, which won’t go into effect until model year 2027. Under those rules, which were finalized earlier this year, passenger vehicles like sedans, SUVs, and trucks will have to hit an industrywide target of 85 grams of greenhouse gas (GHG) emissions per mile by 2032, down from 170 grams per mile in 2027. And today’s report shows that automakers are on their way toward hitting those marks.
“Manufacturers continue to innovate and are bringing technologies to market which will directly improve air quality, better protecting people’s health and saving lives,” EPA administrator Michael Regan said in a statement.
For model year 2023, real-world CO2 emissions decreased to a record low of 319 grams per mile. And new electric vehicles and plug-in hybrids have helped reduce CO2 emissions by 11 percent for model year 2023, the EPA says. (EV sales in the US grew by 11 percent in the third quarter of 2024 compared to the same period last year, according to Kelley Blue Book.)
Real-world CO2 emissions decreased to a record low of 319 grams per mile
The manufacturer with the lowest tailpipe emissions was obviously Tesla, which only produces fully electric vehicles. Kia and Hyundai came in second, with 289 grams per mile and 292 grams per mile, respectively. Stellantis, maker of Dodge, Jeep, and Ram vehicles, had the worst fuel economy, with an average of 402 grams per mile, followed by General Motors, with 396 grams per mile, and Ford, with 374 grams per mile.
The three German automakers, Mercedes, Volkswagen, and BMW, showed the most improvement in pollution reduction between 2018 and 2023. Mercedes eliminated the most pollution, reducing its emissions by 73 grams per mile, followed by VW (44 grams per mile) and BMW (34 grams per mile).
Unsurprisingly, Tesla also sold the most regulatory credits, which has always been a huge part of the company’s revenue stream (and lately has become even bigger). Companies that pollute less than emission standards require can generate regulatory credits, which they can then sell to other companies that pollute more than the rules allow.
Tesla generated nearly 34 million metric tons of greenhouse gas credits for model year 2023, the EPA reports. The industry as a whole, meanwhile, generated a deficit of nearly 11 million credits, led by GM, which posted a nearly 18 million metric ton deficit. GM also led the industry in purchasing the most credits: 44 million in 2023.
Regulatory credits have become a key piece of Tesla’s success. The company earned $2.1 billion by selling regulatory credits to other automakers in the first three quarters of 2024, according to The New York Times, which calculated that figure based on the company’s regulatory filings. That’s over 40 percent of Tesla’s profit for the year.
All of that revenue could be jeopardized if President-elect Donald Trump follows through on his threat to roll back President Joe Biden’s climate legacy. Trump successfully rolled back former President Barack Obama’s tailpipe emission rules during his first administration and has promised to do the same in his second term.
Of course, that could put him on a crash course with his new best friend, Elon Musk. While Musk claims that Tesla could benefit from Trump killing the $7,500 EV tax credit, it’s unclear whether he would feel the same way about wiping out tailpipe emission rules, which would also impact Tesla’s ability to sell regulatory credits to other automakers.
