A federal appeals court on Friday struck down a Biden-era regulation that reshaped how electric vehicles’ (EVs) fuel economy is measured, handing a legal victory to 13 Republican-led states that claimed the rule overstated EV efficiency and undermined emissions targets.
The 8th U.S. Circuit Court of Appeals in St. Louis said the Department of Energy (DOE) acted beyond its authority when it sought to gradually phase out a “fuel content” adjustment between the 2027 and 2030 model years, rather than eliminate it outright. That factor, in place for decades, inflated petroleum-equivalent ratings for EVs to account for energy losses when generating electricity.
Circuit Judge Duane Benton, writing for a three-judge panel, said the DOE had also failed to give the public sufficient notice of the range of alternatives it was considering, leaving stakeholders unable to provide “informed criticism” of the final rule.
The petroleum-equivalency formula is critical in determining whether carmakers comply with corporate average fuel economy (CAFE) standards set by the Department of Transportation. Those standards require automakers to balance the efficiency of their overall fleets.
The DOE had argued that retaining a modified version of the adjustment would encourage production of EVs and “accelerate the widespread adoption” of battery-powered cars in the United States. The department said such incentives were particularly important as automakers ramp up electrification strategies.
Iowa Attorney General Brenna Bird, who led the challenge, said in court filings that the rule “masked the true efficiency of EVs,” enabling manufacturers to offset less efficient gasoline-powered vehicles while technically meeting federal requirements. The states also argued that increasing EV adoption would strain road maintenance budgets because heavier electric models cause greater wear on highways.
Attorneys general from Arkansas, Florida, Idaho, Kansas, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, Texas and Utah joined the lawsuit, alongside the American Free Enterprise Chamber of Commerce.
