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    • As government regulations on electric vehicles increase, performance models decrease
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    As government regulations on electric vehicles increase, performance models decrease

    Umito Posted on

    Sonoma, California -Subaru Corp. rolled out its WRX performance sedan lineup for the 2025 model year this fall, and it was noticeably missing an updated, $40,000 WRX STI, the Sopwith Camel-winged, and more than 300 horsepower. Previous generations of the STI are known for wowing car and coffee gatherings and outpacing more expensive Porsches at track days.

    But the latest model could not exceed government regulations.

    “In today’s regulatory environment, it’s not possible to sell a vehicle with this kind of capability,” Chris Charles, Subaru product line manager, said at a Subaru media event here. Automakers face federal and state fines if their product lines fail to meet emissions targets.

    Not since the CAFE laws of 1974 has the U.S. auto industry been subject to so much regulatory pressure from the government. Familiar patterns emerge: Chrysler (now part of Stellantis NV) is in financial trouble, regulations have opened the door to low-cost Asian competitors, and low-volume, high-horsepower enthusiast vehicles with internal combustion engines are put to the ax. .

    The new Trump administration campaigned on a deregulatory agenda aimed at easing federal emissions mandates aimed at phasing out internal combustion engines over the next decade. But automakers say California — the nation’s largest auto market — is leading the pack with its strict Section 177 zero-emission auto sales mandates, which call for the elimination of gasoline engines and diesel by 2035.

    Subaru, for example, acknowledged the difficulty of meeting current federal regulations, but said the biggest concern was with so-called Section 177 states that have adopted California’s strict emissions requirements — states like Maine, Massachusetts, New York, Oregon, Vermont and Washington, where foreign brands like Subaru sell well.

    Fifty years ago, Detroit muscle cars like the AMC Javelin, Dodge Challenger, Plymouth Barracuda, and Pontiac GTO were canceled. Fast forward to today, and once again, popular models like the Dodge Challenger, Dodge Charger, and V8-powered Chevrolet Camaro have also been shelved.

    This time, it’s not just Detroit’s performance brands feeling the pain. In addition to the Japanese Subaru STI, European performance icons like the Jaguar F-Type, Audi TT and ICE Porsche 718 are ending production.

    “These performance vehicles will not return, and with the regulations in place, we do not anticipate any model changes until the 2028 model year,” said Stephanie Brinley, associate director of automotive intelligence at S&P Global. “Automakers must meet emissions requirements 18 months before the model year.”

    With the support of some automakers, the Trump administration in 2019 revoked California’s exemption from federal law to set its own emissions standards, but the Biden administration immediately reversed it.

    With billions in fines looming from the Golden State’s mandates, automakers have been proactive in focusing on electric vehicles while canceling low-volume ICEs. Starting in 2026, California rules require 35% of sales to be electric/hydrogen vehicles, although most brands’ EV sales today are in the low single digits. Compliant vehicles earn credits for meeting the standards, and automakers that don’t have enough credits in a given year must pay fines or buy credits from companies that have extra.

    “Electric vehicles earn six times more credits in (Section) 177 than plug-in hybrids,” Garrick Goh, car line manager for Subaru subcompact SUVs, told the Detroit News. “So we are focusing on electric vehicles like the Solterra.”

    Auto analyst Brinley expects the Trump administration will rescind California’s emissions waiver again, but that the state will challenge the move and rulemaking will be blocked in court. She also expects federal rules to be relaxed, but not until the 2028 model year, which is too late for current-generation engines that are being phased out to meet emissions regulations.

    “Dodge’s Hemi V-8, for example, is no longer available,” she said, noting that automakers are already developing transmissions for the 2028 standards. “It wouldn’t be able to meet the 2024 standards. and no one is talking about retroactively repealing these rules.”

    The market upheaval is expected to benefit large automakers, which can better spread regulatory costs. The regulations pushed Subaru into the arms of Toyota Motor Corp., Japan’s largest automaker, to produce its electric Solterra and meet California’s electric vehicle sales mandates. But Toyota also entered the ICE performance space vacated by the WRX STI space with its own flashy GR Corolla, and the Japanese giant now offers more affordable sports cars in the U.S. market than Ford Motor Co. and General Motors Co. with the GR Corolla. , GR86 and Supra.

    “We’ve seen this movie before,” said Karl Brauer, a veteran automotive analyst at iSeeCars.com and performance car enthusiast. “But in the past, when manufacturers abandoned low-volume performance cars, they turned to a more cost-effective alternative. What is different this time is that the regulations are all about the stick and not the carrot. Regulations are killing ICE cars, but EVs are not a cost-effective alternative.

    Brauer points to Chrysler Corp.’s decision in the early 1980s to abandon V8-powered muscle cars, under pressure from federal gas mileage laws, and turn to better-selling fuel-efficient cars based on the front-wheel-drive K-chassis. . Or GM’s difficult decision in 2002 to abandon the Camaro and invest in more profitable SUVs.

    “Today, electric vehicles are not a better, cost-effective alternative for the manufacturer,” Brauer said. “They are losing their image and profits by abandoning these popular models in order to comply with regulations. »

    Large mainstream automakers like Ford have benefited from early adoption of battery-powered versions of popular nameplates to earn EV credits so they can continue building low-volume Halo ICE products like the V8-powered Mustang. The company says sales of its F-150 Lightning and Mustang Mach-E electric SUVs have allowed it to introduce popular performance models like the 2024 seventh-generation V8-powered Mustang and the V8-powered F-150 Raptor of 2024.

    “Look at the big, high-volume automakers like Ford, GM and VW,” Brauer said. “Their overall range of low emission vehicles can be distributed to meet regulations. »

    Automakers are experimenting with a new generation of high-performance electric cars as governments push them toward an all-electric future. But raw speed requires bigger, more expensive batteries and so these models also tend to focus on affluent buyers – think the $60,000-plus Hyundai Ioniq 5 N, the Dodge Charger Daytona Banshee and the Electric Porsche Cayman.

    Owner forums are rife with speculation about whether affordable pocket rockets like the Subaru STI will be reborn as electric cars. Subaru refuses to speculate on the future product.

    Brauer said affordable, high-performance electric cars are unlikely, given the cost and weight of the battery, which runs counter to the agile handling enthusiasts expect. But he is optimistic about the future of high-performance, affordable hybrid cars.

    “Hybrids have the potential to sustain these ICE models because their batteries are small and can be performance-oriented, just as fuel injection brought performance and better fuel economy in the 1970s,” Brauer said . “And they don’t need a lifestyle change to function like electric vehicles do.” Most high-performance electric vehicles belong to wealthy households with multiple cars. Hybrids can meet all the needs of an enthusiastic one-car owner.

    U.S. government regulations on electric vehicles have raised concerns that they will benefit Chinese electric automakers like BYD Auto Co., and the Shenzhen-based automaker made headlines late last month in surpassing U.S. electric vehicle maker Tesla Inc. in quarterly revenue. What got less attention, however, was that the Chinese giant’s growth came from a 76% year-over-year increase in sales of gas-electric hybrids to more than half of the company’s 1.1 million vehicle deliveries.

    Henry Payne is an auto critic for The Detroit News. Find him at [email protected] or Twitter @HenryEPayne.

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