WASHINGTON — President Joe Biden’s administration on Friday finalized stricter fuel economy rules for trucks and sport utility vehicles through 2031 that are not as stringent as initially proposed, a federal agency said.
The National Highway Traffic Safety Administration (NHTSA) said the proposed new rules will result in much lower compliance penalties than originally proposed, a significant victory for Detroit automakers.
Automakers praised the changes and environmental groups criticized them.
In July 2023, NHTSA proposed increasing corporate average fuel economy (CAFE) requirements by 2% per year for passenger cars and 4% per year for light trucks from 2027 to 2032.
Under the final rule, NHTSA will require no increases for light trucks in 2027 and 2028 and will only require increases of 2% from 2029 through 2031.
Last year, NHTSA said its proposal Raising fuel economy standards by 2032 would cost the industry $14 billion in anticipated fines. This includes $10.5 billion for the Detroit Three: $6.5 billion for General Motors, $3 billion for Chrysler parent Stellantis, and $1 billion for Ford Motor Company.
Under the final rule, the auto industry is expected to collectively face a total of up to $1.83 billion in fines through 2031 — and could be as little as none at all — based on various models, the NHTSA government told Reuters.
Automakers buy credits or pay fines if they cannot meet CAFE requirements. In June 2023, Reuters first reported that Stellantis and GM paid a total of US$363 million in CAFE fines for failing to meet US fuel economy requirements for previous model years.
The NHTSA said the rule will increase fuel economy to about 50.4 miles per gallon by 2031 from the current 29.1 mpg. Last year, the agency projected that the rule would increase requirements to 58 mpg by 2032.
This is the third regulatory action the Biden administration has taken in recent months that has not strengthened vehicle regulatory proposals as much as promised. Previous actions included new compliance calculations for EVs that were less stringent than originally proposed, and exhaust pipe rules This would ultimately require car manufacturers to manufacture fewer electric vehicles than they had initially anticipated.
John Bozzella, who heads the trade group Alliance for Automotive Innovation that represents major automakers, praised the revisions that will drastically reduce the projected penalties his members feared.
“These fines would not have produced any environmental benefits or additional fuel savings and would have foolishly diverted automakers’ capital from the huge investments required by the electric vehicle transition,” Bozzella said.
Dan Becker, director of the Center for Biological Diversity’s Climate Safe Transportation Campaign, said the NHTSA “caved to pressure from automakers” and said the agency’s “weak final rule wastes too much gas, spews too much pollution, and cedes the vehicle market clean to foreign automakers.”
This article originally appeared in the Detroit Free Press: New truck and fuel-efficient SUV are a win for Detroit automakers
