NHTSA Considers Increasing Fines for Emission Violations

Matt Posky
by Matt Posky
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nhtsa considers increasing fines for emission violations

The National Highway Traffic Safety Administration is considering increasing penalties for automakers that fail to meet fuel-efficiency requirements. Though this could be considered a restoration of older standards, depending upon your perspective.

Shortly before leaving office, President Donald Trump postponed a regulation from the last days of the Obama administration that would have effectively doubled fines for vehicle manufacturers failing to meet Corporate Average Fuel Economy (CAFE) requirements. Automakers had been complaining that the rule would have dramatically increased operating costs, suggesting that would trickle down to vehicle pricing and give manufacturers selling carbon credits an unfair advantage.

Though there are plenty of people who already believe the idea of paying a rival business to “offset emissions” in order to pollute more is kind of a silly premise.

A U.S. appeals court in overturned the former administration’s decision to suspend the 2016 regulation in the summer of 2020. While Obama originally wanted the increased penalties to take effect for the 2019 model year, Trump managed to get them delayed until 2022. But the original plan was to suspend the increased fines indefinitely, since the previous administration was focused on deregulation as its main method of spurring the domestic economy. This seems to be counter to the Biden administration’s strategy and the NHTSA has been fairly aggressive in pursuing new regulatory actions since the change in leadership.

According to Reuters, Congress ordered federal agencies to adjust CAFE-related civil penalties in 2015 to account for inflation. This led the NHTSA to raising fines to $14.00 (from $5.50) for every 0.1 mile per gallon new cars and trucks consume in excess of required standards. Since then, the interested parties have been throwing in their two cents.

From Reuters:

In March, Tesla urged a U.S. appeals court to reinstate the higher fuel economy penalties and said the Biden administration ignored the ongoing impact of the Trump rule on the credit-trading market.

Tesla, whose electric cars produce zero emissions, sells credits to other automakers to reduce their burden of complying with regulations and argued the Trump rule change makes those credits less valuable.

FCA paid a total of nearly $150 million for failing to meet 2016 and 2017 requirements.

NHTSA said its analysis showed reinstating the earlier hike could boost penalties for the 2019 model year alone by $178.5 million, a figure that does not include the impact on credit trading.

Stellantis said earlier this month in a securities filing costs related to potential higher CAFE penalties could be about 521 million euros ($609 million).

Meanwhile, the NHTSA proposed increasing CAFE requirements by 8 percent annually for 2024 through 2026, reversing a Trump-era policy that rolled back higher requirements to ensure consumer vehicle choices remained robust and pricing remained low (at least that’s how it was framed). While the above is fine with just about any manufacturer that prioritizes EVs, legacy brands that still need to sell hundreds of thousands of gas-burning vehicles have less to celebrate. Automotive lobbies generally oppose the hike and have been begging regulators not to retroactively apply penalties to vehicles already produced all summer.

The Department of Transportation and NHTSA will be giving the public 30 days to comment on whether the government should reinstate the 2016 rules imposing higher penalties — which would include vehicles from the 2019 model year.

[Image: LanaElcova/Shutterstock]

Matt Posky
Matt Posky

Consumer advocate tracking industry trends, regulation, and the bitter-sweet nature of modern automotive tech. Research focused and gut driven.

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  • 28-Cars-Later 28-Cars-Later on Aug 19, 2021

    "According to Reuters, Congress ordered federal agencies to adjust CAFE-related civil penalties in 2015 to account for inflation. This led the NHTSA to raising fines to $14.00 (from $5.50) for every 0.1 mile per gallon new cars and trucks consume in excess of required standards. Since then, the interested parties have been throwing in their two cents." Interesting CONgress not only acknowledged inflation but ordered I suppose the NHSTA to triple their Yet Another Tax (YAT) which has not changed since 1997. I'm not sure who came up with the exact figure, but it seems whomever did was expected an inflation rate to be ***triple*** by 2030 in 2015 if we roughly use an assumed 15 year period between adjustments. If what's punitive in 1997 was a joke by 2015, what's punitive in 2015 should be a joke by 2030/32. Long in the future 2008 will be viewed as the beginning of the end of Pax Americana and perhaps Western Civilization. "NHTSA sets [4] and enforces [5] corporate average fuel economy (CAFE) standards for the United States light-duty automobile fleet, and in doing so, assesses civil penalties against manufacturers that fall short of their compliance obligations and are unable to make up the shortfall with credits obtained for exceeding the standards.[6] The civil penalty amount for CAFE non-compliance was originally set by statute in 1975, ***and beginning in 1997, included a rate of $5.50 per each tenth of a mile per gallon*** (0.1) that a manufacturer's fleet average CAFE level falls short of its compliance obligation. This shortfall amount is then multiplied by the number of vehicles in that manufacturer's fleet." https://www.federalregister.gov/documents/2021/01/14/2021-00278/civil-penalties

  • Pmirp1 Pmirp1 on Aug 19, 2021

    Yes, let's increase fines so manufacturers produce products that no one wants. I thought America is the last land where market economy rules. Supply and Demand. No one wants these electric turds. I travel between Savannah Georgia and Atlanta Georgia every two weeks for past five years, even during COVID. In all this time, on 4-5 hours driving, I have seen only 3 Teslas on I-16 connecting those two cities. There are considerable number of Teslas within Atlanta metro but not once you go out of town. See my children, plan is to force people to live in cities because these electric vehicle's range, and the charging station infrastructure does not support our lives in this vast beautiful land. Or perhaps we have to go back to using Greyhound buses to travel. Meanwhile ,Taliban have brand new ICE vehicles that this administration abandoned and they will use for a very very long time. I wonder why our military did not use electrics in Afghanistan???

  • Lorenzo A union in itself doesn't mean failure, collective bargaining would mean failure.
  • Ajla Why did pedestrian fatalities hit their nadir in 2009 and overall road fatalities hit their lowest since 1949 in 2011? Sedans were more popular back then but a lot of 300hp trucks and SUVs were on the road starting around 2000. And the sedans weren't getting smaller and slower either. The correlation between the the size and power of the fleet with more road deaths seems to be a more recent occurrence.
  • Jeff_M It's either a three on the tree OR it's an automatic. It ain't both.
  • Lorenzo I'm all in favor of using software and automation to BUILD cars, but keep that junk off my instrument panel, especially the software enabled interactive junk. Just give me the knobs and switches so I can control the vehicle, with no interconnectivity of any kind.
  • MaintenanceCosts Modern cars detach people from their speed too much. The combination of tall ride height, super-effective sound insulation, massive power, and electronic aids makes people quite unaware of just how much kinetic energy is nominally under their control while they watch a movie on their phone with one hand and eat a Quarter Pounder with the other. I think that is the primary reason we are seeing an uptick in speed-related fatalities, especially among people NOT in cars.With that said, I don't think Americans have proven responsible enough to have unlimited speed in cars. Although I'd hate it, I still would support limiters that kick in at 10 over in the city and 20 over on the freeway, because I think they would save more than enough lives to be worth the pain.