U.S. Government Eases Up on Penalties for CAFE Noncompliance

Automakers and regulators have long been at odds over the rapid implementation of stricter CAFE standards. To give automakers more time to adjust, the National Highway Traffic Safety Administration has delayed a steep hike in noncompliance penalties.

Recently, it was ruled that CAFE penalties would increase significantly for automakers that failed to reach certain fuel economy goals. The penalty was set to go up an extra $8.50 for every 0.1 mpg that an automaker fell short, multiplied by the number of vehicles sold in a given model year. Now that regulators have delayed the hikes, the rule will go into effect for 2019 model-year vehicles instead of 2015 models.

The Alliance of Automobile Manufacturers, which consists of 12 major automakers, fought the penalty hike when it was first introduced. For one thing, automakers had already written out their vehicle development schedules through the 2018 model year. In the end, NHTSA decided raising the penalties this early wouldn’t lead to increased fuel economy if automakers already had their product plans set out.

In another victory for the auto industry, regulators have also vowed to erase discrepancies between fuel economy standards from NHTSA and greenhouse-gas standards from the EPA. This move will help make sure rules from one governmental body don’t conflict with rules from the other.

The news comes as the EPA has been hurrying to finalize 2025 CAFE standards before president-elect Donald Trump takes control of the White House, according to reports. The rules would require automakers to achieve an average of more than 50 mpg in their fleets.

Source: Automotive News (Subscription required)

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