NHTSA To Increase Penalties For Automakers That Can't Meet MPG Regulations

Recently, many automaker have been worried about being able to meet the federal government’s CAFE fuel economy standards.It appeared that they might get a slight reprieve with the news that regulators had reduced their target mileage from 54.5 mpg by 2025. However, days before that news broke, the National Highway Traffic Safety Administration (NHTSA) also announced it would be doubling the fines assessed to automakers that fall short of fuel economy regulations.

 

Currently, all new cars and trucks sold in the U.S. are required to get 34 miles per gallon. But over the next few years, automakers will see this number incrementally increase until 2025. This is when the federal government’s Corporate Average Fuel Economy (CAFE) standards will dictate that all new vehicles must get around 50 mpg.  

 

Automakers have been worried, as this number has seemed unattainable for some time now. NHTSA has not done much to allay any of these fears that car companies have, as they recently announced that next month they will begin to "more than double" the fines for manufacturers who can’t meet CAFE standards from $5.50 to $14. These fines are applied to every 0.1 mpg that a manufacturer misses their fuel economy targets by, and is then multiplied by the number of vehicles from that fleet sold in a given model year. 

 

These increases in penalties will be phased in over the next several years.

According to Automotive News NHTSA said that these steeper penalties will also apply to 2015 model year vehicles that it has not yet issued compliance reports for. So manufacturers do not yet know how much they have already lost due to these increased penalties. The agency also believes that this increase of $8.50 will give automakers more incentive to try and meet these fuel economy targets as they begin to increase going forward. NHTSA assessed $20 million in fines in 2010.

This change could increase tensions between the automotive industry and its federal regulators, as they were made without the industry receiving any prior warning. Automakers are now calling for the EPA and NHTSA to work out the discrepancies between their  greenhouse gas and fuel economy programs and create one standardized set of regulations that they can follow.

 

(Read an analysis of U.S. automotive preferences -- and a prediction that the U.S. CAFE goals are unattainable because of them -- in this issue of NAFAConnection.)