Less strict fuel economy regulations were finalized by President Joe Biden’s administration on Friday for trucks and sport utility vehicles through 2031, according to a federal agency.
A major victory for Detroit manufacturers, according to the National Highway Traffic Safety Administration (NHTSA), is that the revised guidelines that have been presented will result in substantially lower compliance fines than those that were initially planned.
Although environmental organizations protested the revisions, automakers applauded them.
The NHTSA has suggested raising the Corporate Average Fuel Economy (CAFE) standards for light trucks and passenger automobiles by 4% and 2% annually, respectively, starting in July 2023.
NHTSA will only need 2% increases for light vehicles from 2029 through 2031 under the final rule, and it won’t require any increases for light trucks in 2027 or 2028.
The NHTSA estimated that penalties associated with raising fuel economy rules through 2032 would cost the sector $14 billion in the previous year.
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The Detroit Three will receive $10.5 billion of this: $6.5 billion from General Motors, $3 billion from Stellantis, the parent company of Chrysler, and $1 billion from Ford Motor Company.
Based on different scenarios, the government’s NHTSA informed Reuters that the auto sector might be subject to fines totaling up to $1.83 billion through 2031. However, the amount could be as little as $0.
If car manufacturers can’t meet CAFE standards, they have to pay fines or buy credits.
Stellantis and GM paid $363 million in CAFE fines for not meeting U.S. fuel economy standards for previous model years, according to a June 2023 Reuters story initially published.
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