A federal appeals court has dismantled a key Biden-era regulation that reshaped how electric vehicles are measured against fuel economy standards, siding with a coalition of Republican-led states who claimed the policy gave EVs an unfair boost.
The 8th U.S. Circuit Court of Appeals in St. Louis ruled that the Department of Energy stepped beyond its authority when it altered the long-standing “fuel content” factor. Instead of removing the factor outright, the agency opted for a phased approach between 2027 and 2030, a move the court said went further than what the law allowed.
Circuit Judge Duane Benton, writing for a three-judge panel, faulted the department for failing to give the public a genuine chance to weigh in on alternative approaches before finalizing its March 2024 rule. That omission, the court said, deprived stakeholders of the ability to lodge “informed criticism.”
At stake was the calculation of “petroleum equivalency,” a formula baked into the Department of Transportation’s corporate average fuel economy (CAFE) standards. By overstating EV efficiency, critics argued, automakers were effectively granted leeway to churn out less-efficient gasoline vehicles while still hitting federal targets.
The Energy Department had defended the adjustment, saying it would help spur near-term EV production and “accelerate the widespread adoption of EVs in the United States during this pivotal time.”
But Iowa—joined by 12 other Republican states and the American Free Enterprise Chamber of Commerce—claimed the policy undercut emissions goals and carried unintended consequences. They argued that heavier EVs chew up roadways at a faster rate, leaving taxpayers with a larger bill for maintenance.
The challenge was backed by Arkansas, Florida, Idaho, Kansas, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, Texas, and Utah.
The court’s decision came just days before Donald Trump began his second term in office, setting the stage for further policy battles over how aggressively Washington can push the electric transition.
The case is Iowa et al. v. Wright et al., No. 24-1721 in the 8th U.S. Circuit Court of Appeals.
