The U.S. National Highway Traffic Safety Administration (NHTSA) has reinstated higher penalties for automakers failing to meet fuel efficiency requirements in recent years, a win for Tesla that could cost other automakers hundreds of millions of dollars or more, according to a document seen by Reuters.
President Donald Trump’s administration in its final days in January 2021 delayed a 2016 regulation that more than doubled penalties for automakers failing to meet Corporate Average Fuel Economy (CAFE) requirements starting in the 2019 model year. NHTSA’s final rule, which was viewed by Reuters, reinstates the higher penalties and boosts them further for the 2022 model year.
Automakers protested the 2016 penalty hike, warning it could boost industry costs by at least $1 billion annually. The hike is expected to cost Chrysler parent Stellantis, for instance, hundreds of millions of dollars.
The head of a trade group representing nearly all major automakers except Tesla said Sunday it would be a “better outcome” if the penalties “were invested in electric vehicles, batteries and charging infrastructure instead of disappearing into the general fund of the Treasury.”
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