The US Department of Transportation paved the way for relaxing fuel efficiency standards in the United States on Friday (June 6th), stating that the previous administration set overly ambitious targets for the adoption of electric vehicles, exceeding its authorized scope.
This statement was made by the department when it released the final version of the Corporate Average Fuel Economy (CAFE) regulation. The Trump administration is set to issue a separate rule to revise fuel efficiency standards.
Transportation Secretary Sean Duffy stated in a release, “We are making the vehicle manufacturing industry more affordable and easier in the United States.” He also mentioned, “The previous administration’s CAFE standards were incorporated into the Electric Vehicle Mandate, which is illegal.”
The Department of Transportation indicated on Friday that its subordinate National Highway Traffic Safety Administration (NHTSA) had erroneously assumed in setting rules last year that, “Regardless of the standards set by the agency, the production of electric vehicles would continue to increase significantly, hence the maximum achievable standard levels should also be raised.” Earlier this year, Duffy signed an order directing the NHTSA to withdraw fuel efficiency standards set by the previous administration for model years 2022-2031, aimed at significantly reducing fuel consumption for cars and trucks.
Later on Thursday, Republican senators proposed eliminating fines faced due to non-compliance with CAFE regulations as part of a broad tax legislation, making it easier for auto manufacturers to produce fuel-based vehicles.
Last year, Chrysler’s parent company Stellantis failed to meet the US fuel efficiency requirements for 2019 and 2020, leading to a civil penalty payment of $190.7 million. Previously, the company had paid nearly $400 million in fines for the years 2016 to 2019. General Motors had also paid $128.2 million in fines for 2016 and 2017.
Stellantis stated that it supports the Republican Senate’s proposal to provide relief during the period when the Department of Transportation resets CAFE standards, believing that “these standards are not in line with current market realities, and immediate relief is necessary to maintain affordability and freedom of choice.”
In June 2024, the NHTSA led by the Biden administration announced that it would increase CAFE requirements for light-duty vehicles from the current 39.1 miles per gallon to 50.4 miles per gallon by 2031 (4.67 liters per 100 kilometers). The agency had previously stated that this regulation would reduce gasoline consumption for passenger cars and trucks by 640 billion gallons, cut emissions by 6.59 million tons, and estimate a net benefit of $35.2 billion.
(This article reference Reuters’ report)