Trump Administration Re-examining Penalties for Fuel Economy Flubs
Automakers’ ability to adhere to the regulatory standards set by the U.S. government are beginning to slip. Manufacturers predicted industry-wide economy inadequacies for 2016 model year vehicles, anticipating things would only worsen for 2017. The Trump administration has framed itself as a friend to automotive companies, with the president himself claiming he would remove regulatory hurdles while in office. Corporate economy guidelines established under President Obama are already under review, but now so are the penalties companies would have to pay for not meeting them.
In a regulatory filing on Friday, the National Highway Traffic Safety Administration said it would be seeking public comment on how to revise plans, slated to go into effect from the 2019 model year, which would more than double the penalties on auto manufacturers that fall short of meeting the government-set economy targets.
“Seeking comment on the inflationary adjustment will allow stakeholders to provide input and provide NHTSA additional information to inform the agency’s decision regarding how the CAFE civil penalty should be adjusted for inflation,” said the agency in a statement.
The Alliance of Automobile Manufacturers, a trade group representing the corporate interests of 12 carmakers, stated the agency’s reconsideration was “good news for the auto industry and consumers.” The AAM, along with the Association of Global Automakers, have been petitioning for softer economy targets and less aggressive penalties for almost a year. However, the AAM has made corporate environmental issues its chief concern since 2002 and the AGA has been combating California for over a decade — claiming the state has no authority to regulate greenhouse gas emissions beyond what federal agencies had already specified.
Currently, the NHTSA, EPA, and CAFE regulatory targets require gains in fleet-wide fuel efficiency to average 38.3 miles per gallon by 2021. New cars and trucks in the U.S. averaged 32.2 mpg in model year 2015 and automakers are worried they’ll be unable to meet next year’s guidelines, with several stating it would be impossible.
“In light of the fact that CAFE standards are set to rise at a significant rate over the next several years,” the NHTSA said in its filing, “it is likely that many manufacturers will face the possibility of paying larger CAFE penalties over the next several years than at present.”
Since the mid-1970s, automakers have been fined $55 for each mile-per-gallon shortfall, multiplied by the number of vehicles sold for that specific model year. In 2015, congress instructed all federal agencies to update their penalty formulas to account for inflation, and NHTSA suggested increasing the fine to $140 per miles per gallon penalty. Currently, it’s estimated automakers have paid roughly $890 million in civil penalties.
[Source: Automotive News]
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