NHTSA Agrees With Tesla & Increases Fines For Automakers Not Meeting Fuel Economy Rules

The National Highway Traffic Safety Administration (NHTSA) has agreed with Tesla in a move that will increase the fines for automakers whose vehicles don’t meet fuel efficiency requirements for model years 2019 and up, Reuters reports.

The NHTSA has reinstated the increase in penalties on this topic which could cost other automakers hundreds of millions of dollars at least. In another report, the NHTSA told Reuters that the decision would increase the accountability for the manufacturers that violated the nation’s fuel economy standards. The NHTSA added that the penalty increase would incentivize them to make fuel economy improvements.

The final rule will take effect 60 days after it’s published. Aside from reinstating the higher penalties, it boosted them for the 2022 model year. It hasn’t collected penalties for the 2019–2021 model years while this was under review. The final rule was signed by the NHTSA’s Deputy Administrator, Steven Cliff, last Thursday.

In a statement on Sunday, Stellantis said that it would “like to work with the administration and Congress to allow the agencies to use the proceeds from penalties to bolster investments in the technologies and infrastructure required to accelerate a robust U.S. market for EVs.”

Tesla has been pushing for stricter penalties, which included tougher penalties for automakers that have failed to meet US fuel economy standards. Many of these automakers have complained that raising the penalties could cost them around $1 billion a year if they fail to comply with the rules. This would lead them to pay higher prices for credits used to meet the rules.

In January, a US appeals court rejected Tesla’s request to reinstate the higher penalties. A group of automakers that opposed Tesla’s requests included General Motors, Toyota, Ford, and Volkswagen. The group seemed a bit worried about Tesla benefitting from the CAFE credits — and for having to pay penalties.

Tesla’s mission is accelerating the transition to sustainability, so it makes sense that it would want automakers to pay higher penalties for making vehicles that don’t meet US fuel economy standards.


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