The National Highway Traffic Safety Administration said today that it may bring back pre-Trump administration penalties for automakers that can’t keep their average fuel consumption in check.
NHTSA is giving the public 30 days to comment on a plan that would reimpose rules first established in 2016 and bring back penalties for automakers whose Corporate Average Fuel Economy (CAFE) is too high, effective with the 2019 model year, reports Reuters. The administration has not yet reached a decision, though.
The move would see Obama-era penalties return for automakers whose vehicles on average, combine to consume more miles per gallon than is allowed by the government. This was part of a decision from Congress to raise penalties to meet inflation. As a result, NHTSA raised fines from $5.50 to $14 for every 0.1 miles per gallon in excess of CAFE standards.
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In the final days of the Trump administration, Republicans attempted to first suspend the hike, then delayed it until the 2022 model year.
A trade group representing U.S. and foreign automakers said it had urged the NHTSA not to retroactively impose penalties. Not all automakers are against it, though. Tesla has been lobbying the government to reinstate the higher fuel economy penalties; and it has good reason to do so because selling over-consuming automakers’ environmental credits is an important part of its business.
In 2016 and 2017, Fiat Chrysler Automobiles (now a member of Stellantis) paid a total of almost $150 million for failing to meet CAFE requirements. The NHTSA, meanwhile, reports that its analysis shows that reinstating the earlier hike could amount to more than $178 million in penalties, though that doesn’t account for credit trading.
The move follows the Biden administration’s aim to make 50 percent of all new vehicles on the road electric by 2030 and an EPA proposal to significantly increase fuel economy standards.
