By on September 23, 2021

Last month, the U.S. National Highway Traffic Safety Administration (NHTSA) proposed new rules that would increase fines for automakers who previously failed to adhere to fuel efficiency requirements. EV manufacturer Tesla has predictably endorsed the rules and has begun urging the federal government to put the plan in action as soon as possible.

While automakers have issued concerns that increasing penalties could cost them over $1 billion per year through regulatory fines and the purchasing of carbon credits, Tesla has been asking the Biden administration and a U.S. appeals court to expedite the process and make the proposals binding. Though that’s undoubtedly because the company sells its credits to the tune of at least $350 million annually and doesn’t build a single automobile that’s powered by gasoline. 

If you’re looking for a bad guy in this, there are plenty to choose from. Tesla is greedily trying to convince the government to hamstring its rivals while shoveling funds into its coffers; federal regulators now seem totally obsessed with destroying internal combustion engines and completely oblivious of the economic ramifications; this whole mess started because the previous administration delayed a 2016 rule that more than doubled penalties for automakers; and the current government doesn’t seem to be able to do anything but snap back to (or bolster) Obama-era policies.

Manufacturers have always had trouble adhering to Corporate Average Fuel Economy (CAFE) rules and I’ll be the first to question their efficacy. American consumers have long preferred larger vehicles with more robust powertrains, resulting in a slew of unpopular compliance vehicles and an average U.S. fuel economy (for all cars sold) that’s been hovering around 25 mpg for three presidential administrations. But this is all irrelevant to Tesla, who would happily let its rivals sweat as it avoids the matter by focusing on EVs.

According to Automotive News, Tesla executives met with the NHTSA on August 30th and issued a couple of letters:

The government memo said Tesla suggested NHTSA withdraw Trump’s action immediately, saying it “produces continuing uncertainty in investments and transactions across the industry, and any delays will continue to have deleterious effects on the credit market until the issue is resolved.” It added Tesla believes “any delays will continue to have deleterious effects on the credit market.”

Tesla on Aug. 27 separately again asked the Second Circuit U.S. Court of Appeals to quickly reinstate higher penalties. The court rejected Tesla’s request in April for immediate action pending NHTSA’s review.

“The uncertainty perpetuated by NHTSA’s sluggish rulemaking pace is thus compounded by the likelihood of yet another round of litigation,” Tesla wrote, warning uncertainty “may linger for several more years.”

Former President Donald Trump didn’t dissolve the rule, he simply pushed the original 2019 model year launch date for the larger penalties back to 2022 on the grounds that regulatory actions had run amok during the Obama administration. However, the Department of Transportation and NHTSA have been attempting to restore the original terms since Joe Biden took office. Though the potential for political intrigue is a lot lower than the above makes it seem. One side of the aisle wanted widespread industrial deregulation while the other wanted to increase regulatory measures.

Meanwhile, legacy automakers (including those transitioning toward electric vehicles) are broadly opposing updated CAFE rules that retroactively affect vehicles they sold before the 2022 model year. Manufacturers feel they adhered to the laws of the time and should not be subject to penalties incurred after a change in leadership and asked regulators to reconsider in August.

[Image: Virrage Images/Shutterstock]

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51 Comments on “Gas War: Tesla Asks U.S. to Increase Fuel Economy Fines...”


  • avatar
    SCE to AUX

    There is a lot wrong here (I don’t mean the article):

    – The carbon credit scam is *designed* to work this way. If everybody was equally green or red (whatever the bad color is), then no money would transfer.

    – CAFE is a losing proposition as requirements rise. It becomes increasingly impossible to fund roads with rising CAFE limits.

    – Tesla wasn’t always the leader; Nissan had the early lead in collecting fine payments.

    – Legacy mfrs have always had the option to build EVs, but chose not to for the last decade – for good reasons. The same government that bailed them out in 2010 now wants to force them to be greener.

    – Maybe the Biden administration will tie carbon payments to union representation, just like it’s trying to do with future EV incentives. That’s a screwed up mess.

    – These politicized rules only further complicate the market. Enough already. Every mfr seems to be making some EV commitment, but Tesla’s lead is so great it doesn’t need more help through this system.

    I wonder if Tesla’s real concern is in the EV truck market. They’ve got nada, while Rivian is shipping product, with Ford about to as well. I’d bet ‘manufacturing hell’ is repeating itself with the Cybertruck, and maybe they are afraid reservation holders may wake up from their Tesla hangover and go buy a Ford instead.

    • 0 avatar
      mcs

      ” I’d bet ‘manufacturing hell’ is repeating itself with the Cybertruck,”

      It was on the 4680 batteries, but they’ve been smart enough to get a huge head start. They’ve got the Kato road pilot plant up to a decent yield level on the cells. The cybertuck section of the Austin plant still seems to be under construction. There are processes that are new for the cybertruck, so there should be some serious challenges getting the line up and going. There are patents on some of the processes, so I’ve seen documentation for them. The glass forming process sounds challenging.

    • 0 avatar
      28-Cars-Later

      Very good points. I do hope you’re wrong on your second to last point as that represents a huge conflict of interest. I don’t believe Rivian is a threat but I agree Ford could hit a home run with F-150 EV. Tesla would have been wise to buy one of the fledging “truck” makers since AFAIK none of them has brought anything but vaporware to market. Using Chairman Musk’s Konami code that new division could miss dates and produce problematic product and it wouldn’t matter.

    • 0 avatar
      Matt Posky

      Agreed. Regulatory policies have been totally out of whack for a while and the people making the decisions (regardless of their political affiliation) seem totally incapable of understanding the issues or have become sullied by corporate interests. I don’t know what options people have outside of ending of pointless bureaucracies that seem to destroy everything they touch. There are just too many legislators, administrative heads, and CEOs forwarding bad ideas lately and they’ve forgotten about regular people and how the world actually functions.

      The mere fact that the NHTSA even thinks this MIGHT be a useful plan is pretty repulsive. Meanwhile, the EU is mulling over whether or not Euro 7 emission mandates should include a provision that requires the government to surveil automobiles for their entire lifespan. But I don’t even like states that have annual vehicle inspections, so most bridges are too far for me.

      • 0 avatar
        28-Cars-Later

        “and the people making the decisions”

        …are totally out of whack as well.

        ” they’ve forgotten about regular people and how the world actually functions.”

        Perhaps they *want* the world to stop functioning properly for some other end? Think: Ordo Ab Chao.

        • 0 avatar
          Matt Posky

          I wouldn’t want to give anybody that much credit. Hanlon’s razor and all that.

          Then again, the World Economic Forum’s Great Reset is just chilling on its homepage for anyone to read and there’s about 50 years worth of recordings where people in power say one thing to the public and then do the exact opposite.

          • 0 avatar
            28-Cars-Later

            “years worth of recordings where people in power say one thing to the public and then do the exact opposite.”

            That’s really not so new, what’s chilling is previously the lies revolved around a clique or group of business interests economically gaining as a result of that lie. One can survive this clique or that cartel profiting at your expense, what Klaus Barbie & Co. are musing about are Bond villain level societal changes which I fear will lead to dehumanization and subsequent [INSERT DYSTOPIA OF YOUR CHOICE]. On the face of it, there is no *real* reason to do so. The reasons they provide are utter lies and two of the three actual high level reasons (Grand Solar Minimum, Peak Oil, Digital Currency Control) ultimately fall back to Klaus Barbie and Co’s poor management of the Second and Third world.

            Other than Emperor Palpatine levels of psychoses there is no reason to go to digital currency either, SWIFT could be replaced with an international SDR for exchange (like *cough cough* gold) and then it free floated against local currencies (or just use gold, but oh no that means no more eternal deficits and welfare state! the horror).

    • 0 avatar
      slavuta

      I listened to Biden’s UN speech. And today I listened to 1970 Brezhnev’s new year address.

      Strikingly similar. Another Biden’s plagiarizing event?
      Oh.. Electrification was also a Soviet thing once.
      But Tesla is like a bad neighbor who calls the township and asks to put more stop signs.

      • 0 avatar
        28-Cars-Later

        You should call and demand those twenty minutes of your life back.

        Oddly enough though your comparison is pretty accurate. Brezhnev by the mid 1970s personified everything wrong with the Soviet system and his death set about the demise of that system (I don’t count Andropov or Chernenko, they were both placeholders the latter of which was already dying when he was appointed, er “elected”. Evidently Gorbachev wasn’t “ready” yet in 1984).

        “Tesla is like a bad neighbor who calls the township and asks to put more stop signs.”

        Funny thing we haven’t heard from him in months, nobody is sure where he went.

        • 0 avatar
          slavuta

          28,

          may be “he” went to the moon already.

          Actually, good thing about soviets was, after Stalin they were so afraid of another dictator that they reformed the top of the gov. so that no one person could rule. When they took Khrushchev down, he said something like, “you could only do it because I changed the system”. Brezhnev was a talking head but we knew that this is what he is and that Politburo is the “man”. We knew each member in that group. But with Biden, we don’t know who is in his politburo.

      • 0 avatar

        Check this out – very funny staff

        audioboom.com/posts/7942333-in-joyful-memory-of-my-colleague-of-decades-professor-of-politics-stephen-f-cohen-november-25?fbclid=IwAR1f_pKim_S5RrdjT_H3oLTvvgz-R-pAt04UY8OJRFeQRyOVVdyaLA6W4SE

    • 0 avatar
      Imagefont

      Wait, I though battery prices were going down every year. The cells Tesla uses should be like $10/kwh so what’s the problem? EV’s are so much simpler than ICE vehicles without all those messy unreliable parts, so why aren’t the prices of EV’s going down every year? Where is the $20,000 Model 3? Where is the $15,000 Model 3?
      I think every EV should include an extra $7500 charge tacked on to the sticker price that is then donated to legacy car manufacturers to assist them in transitioning to building these super economical EV’s that get cheaper to build and sell all the time.

      • 0 avatar
        mcs

        @ImageFont: “so why aren’t the prices of EV’s going down every year? ”

        It’s supply and demand. EVs are in high demand because car buyers want them. Cadillac sold out the Lyriq in less than an hour. Tesla continues to have a backlog in orders and is working hard to get two new huge factories online. California EV sales hit 9% in the first quarter and in Norway, BEVs have a 64% market share. There’s a huge demand for them at the current prices, so it doesn’t make sense to lower prices. In fact, I think Tesla has been increasing them. It’s business 101. If you can’t make enough of a product due to high demand, you don’t lower the prices.

        https://www.power-technology.com/news/electric-vehicle-sales-surge-in-2021/

        https://www.coxautoinc.com/news/sales-of-electrified-vehicles-jump-up-81-in-the-first-quarter-of-2021/

        https://www.wsj.com/articles/electric-vehicle-sales-growth-outpaces-broader-auto-industry-11627032601

      • 0 avatar
        mcs

        @ImageFont:”I think every EV should include an extra $7500 charge tacked on to the sticker price that is then donated to legacy car manufacturers to assist them in transitioning”

        So, GM produces a Bolt, gets charged $7,500, then gets $7,500 back. VW gets charged $7,500 for each IDx, then gets $7,500 back. How do you define a legacy automaker? Tesla was founded in 2003. New GM was founded in 2009. Stellantis was founded in 2021.

      • 0 avatar
        SCE to AUX

        “why aren’t the prices of EV’s going down every year?”

        They are, if one considers the product you’re getting each year.

        I could ask – and answer – that question the same way for ICEs.

        • 0 avatar
          Imagefont

          They are – what? Somehow cheaper is bizzaro land? They’re more expensive, and they will stay that way, and not because of demand. First the price is high because they’re built in small quantities, now they’re more expensive because demand is so high! But somehow they’re cheaper even though they cost more?! My head is going to explode trying to decipher your broken logic.
          Tesla stans: always moving the goal posts, always changing the subject, always making excuses, defend all things Tesla to the end.

          • 0 avatar
            mcs

            @ImageFont:

            Definitely not a tesla stan. Just stating facts. You’re detached from reality. One example is your statement that the price is high because they are made in small quantities? The Model 3/Y deliveries for the second quarter alone was 199,360. How is that a small quantity? A BMW 3 Series and a Mercedes C class both start at around $42k. A Model 3 Standard Range plus is $40k. It’s cheaper. $40k is less than $42k. Again, facts.

          • 0 avatar
            Flipper35

            What I think he is saying is they are like computers. The product you get for the money is much better than the previous generation product and there are many less expensive EVs on the market now. We have come a long way from a $100k roadster and a $14k turd.

  • avatar
    EBFlex

    Imagine being so virtuous…..no that’s not the right word.

    Imagine being so stupid that you propose to fine an automaker for having the audacity to build vehicles people want to buy. And then being so ignorant to think that a fine on the automaker wine be immediately passed to the consumers. Just another way to manipulate the market so it builds dirty EVs and shifts away from proper ICE vehicles.

    Also, imagine being so stupid as to advocate for BS like this when all you do is make shoddy, laughably bad EVs that don’t make money. Your only profits come from the selling of carbon credits.

    These people have to go. They are incapable of passing legislation that helps this country.

  • avatar
    gasser

    If you want to lower atmospheric carbon emissions figure out a way to prevent Western states forest fires. The bad air now stretches all the way to the East coast.

  • avatar

    The administration should make Tesla a deal:

    They’ll increase the fines if Tesla turns off Autopilot and discontinues its sale, so it stops killing people.

  • avatar
    kcflyer

    So Musk supports bad policy that lines his pockets but last week railed against bad policy that didn’t. Color me shocked.

  • avatar
    FreedMike

    Well, they can ask…

  • avatar
    Jeff S

    Musk is definitely the boar at the trough and has benefited from the fines. If and when I ever buy and EV it will not be a Tesla. I hope the Cyber truck if and when it comes out is buried by the Lightning and Rivian. Musk has been smoking too much weed.

  • avatar
    ToolGuy

    I trust the Biden-Harris Administration to do the right thing here.

    • 0 avatar
      Lou_BC

      You forgot the /sarc suffix

      • 0 avatar
        ToolGuy

        • Fixed COVID
        • Fixed the ecomony
        • Fixed the chip shortage

        Everyone needs to relax. Trust the experts.

        https://www.msn.com/en-us/money/news/semiconductor-shortage-appears-to-be-worsening-as-coronavirus-causes-new-supply-problems-in-southeast-asia/ar-AAOJxTF

        • 0 avatar
          Luke42

          1) “Fixed COVID”: Offered everyone vaccines. Republicans refused to get it in order to own the libs, and many of the unvaccinated have died to own the libs as a result.

          2) “Fixed the economy”: See item #1

          3) “Fixed the chip shortage”: See items #2 and #1.

          As a lib, I feel very owned right now, I guess?!? [Facepalm]

          I’d rather everybody get vaccinated, so we can all live to fight about our political philosophies — rather than waiting for the pandemic to burn itself out the natural/deadly/expensive way.

          • 0 avatar
            ToolGuy

            @Luke42,

            #1, this wasn’t an attack on Democrats. The ‘other’ party is about as [in]effective. (I generally vote Libertarian – might change if an Anarchy Party emerges.)

            B, don’t ever revise my quotes (please) – my subtle Idiocracy references are there for a reason.

            [Yes, this entry contains an oblique reference to National Lampoon’s Vacation, which is a movie about cars and driving.]

        • 0 avatar
          slavuta

          Free Texas, Free South Dakota!!

          • 0 avatar
            ToolGuy

            @Slavuta,

            Shhhhh. South Dakota could contain one or more ICBM site(s) [I can’t say]. If such territory [physical] is no longer part of such country [political], it could become big big problem, nyet?

  • avatar
    BSttac

    No. Tesla focus on that vaporware Cyber truck or whatever else you are lying to the public about making.

  • avatar
    pmirp1

    Come October 4th, I am walking to my friendly Chevrolet dealer, putting in an order for the new color Green Tahoe RST with the 6.2 liter engine. That should be an answer to Mr Musk and his idiotic musings about any fuel efficiency fines. October 4th, the first day you can put orders for 2022 big GM triplet SUVs for 2022. Do not wait. Put your orders in.

  • avatar
    Dartdude

    That’s why I won’t buy a Tesla product. I will wait for Ice manufacture to build a EV that fits my needs.

  • avatar
    Jeff S

    I will not buy a Tesla product either. As much as I don’t like GM and Ford I would trust either of them more than Elon Musk. The ones to watch will be Toyota with their solid state battery and VW.

    • 0 avatar
      mcs

      I trust Tesla, especially their drivetrain technology, over Ford and GM. Ford and GM somehow know less about making cars than Tesla. GM for missing basic tests & diagnostics that would have pointed to the Bolt issues and Ford that can’t figure out roofs on either the Mach E or the Bronco along with numerous failures of their ICE vehicles.

      My biggest issue with Tesla is their attitude towards right-to-repair. That’s a big one for me. Parts should be readily available for independent shops or to me if I decide to repair it myself. I work on far more sophisticated things than Teslas, so I could do it. I can get past a lot of their other issues, but that one is tough.

      I do trust Hyundai/Kia, VW Group (especially with Rimac aboard), and Toyota is working hard to produce a good product. Styling wise, I really like the Polestar Precept and look forward to seeing what the production version looks like.

      https://www.topgear.com/car-news/electric/official-polestar-precept-going-production

      https://www.polestar.com/us/news/predict-the-future-polestar-balenciaga/

      • 0 avatar
        mcs

        @myself: “I trust Tesla, ”

        I keep looking at that statement… and it really isn’t true. I think what I wanted to say is that I trust their drivetrain designs, but that’s it. Especially in light of their handling of the whole FSD debacle. Having to earn good driver points in order to be allowed to use something you paid $10k for? What happens if they start applying that to other features? I can understand the driver points thing for a beta, but don’t charge anyone $10k unless they are absolutely going to be able to use the product. Not as bad as the right to repair issue, but annoying.

  • avatar
    Flipper35

    If all the ICE vehicles went away tomorrow, I would still not buy a Tesla. While the Model S is a nice looking vehicle no the outside and the quality might be fine, I would not want to pay for a model S and could not live with the interior of the lesser models at any price.

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