New EPA Rule Will Expedite Transition to Electric Vehicles

Jeff Siegel

Written By Jeff Siegel

Posted April 10, 2023

It states its mission pretty simply …

To protect human health and the environment.

A bit vague for my taste, but we all know what the EPA is there for.

Unfortunately, for far too long, it has been unable to act independently and has often been used as a pawn by whichever administration is running the show.

When a sitting president is hostile towards environmental protection efforts, it meets much resistance.  When a sitting president embraces environmental protection efforts, it's sometimes persuaded to act outside of its jurisdiction. 

As an unapologetic environmentalist, I do like the idea of legitimate oversight when it comes to environmental protection.  But the EPA – oftentimes under direction of past and present sitting presidents – has lost legitimacy over the years.  The fact that there are still people in this country drinking contaminated water, and toxic spills resulting from train derailments get swept under the rug pretty quickly, shows just how NOT independent the agency is. 

So anytime the EPA makes a major announcement, I’m very suspicious.

One of those announcements will be happening this week.

According to the New York Times, the EPA is expected to make a groundbreaking announcement this week that will make the majority of new US car sales EVs by 2032.

As reported by EV analyst Michelle Lewis, the EPA will be putting forth new requirements that will ensure EVs make up between 54-60% of all new cars sold in the US by 2030, with that figure rising to 64-67% of new car sales by 2032. 

Interestingly, Bloomberg data has shown that, even in the absence of such regulations, more than half of all new car sales will already be electric by 2030. 

Certainly, the EPA’s regulatory framework increases EV adoption quite a bit, but it does beg the question, is this even necessary?  

The auto industry is already transitioning away from internal combustion towards vehicle electrification, and quite rapidly, I might add. 

It is likely this rule will be met with major pushback from republicans, who, for the most part, have been relatively reluctant to this transition.  Not that it really matters, though, as it ultimately comes down to the decisions of the major automakers.  And all of them are embracing electric vehicles. 

Of course, I suspect some changes will be made to the EPA’s regulatory framework, which is good.  No government agency should serve as a dictator.  There has to be some give and take, and there has to be transparency.  Both will happen as the EPA pushes these regulations forward.  

But with the automakers on board, and more than half of Congress likely to support these efforts in some form, we shouldn’t be surprised when these regulations kick in. 

To clarify, I’m oftentimes opposed to government interference in these matters. But as an investor, I know an opportunity when I see one.  And with these new EPA regulations expediting the transition to electric vehicles, you can be sure there’s going to be a whole lot of money to be made in the process. 

In terms of car companies producing and selling EVs in the US, I’m most bullish on Tesla (NASDAQ: TSLA), Ford (NYSE: F), GM (NYSE: GM), Polestar (NASDAQ: PSNY), and Hyundai (OTCBB: HYMTF).

In terms of mining companies that are best positioned to profit from EV production and sales in the US, I’m particularly bullish on copper producer Lundin Mining (TSX: LUN) (OTCBB: LUNMF).

In addition to Lundin, I expect to see Freeport-McMoRan (NYSE: FCX), Southern Copper Corporation (NYSE: SCCO), and Vale S.A. (NYSE: VALE) to benefit from the EPA’s latest regulatory framework. 

Expect to see the EPA’s announcement this week.

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