The increased fuel economy standards for cars and light trucks floated by the Transportation Department are aimed at complementing stricter tailpipe emission limits proposed by the EPA in April, putting more pressure on automakers to swiftly transition to electric vehicles over the next decade.
And lawmakers are drawing similar partisan conclusions about the fuel economy standards as they did about the tailpipe limits, teeing up more debates on what Republicans say is administrative overreach to mandate the adoption of electric vehicles.
“At a time when prices for new vehicles are at all-time highs, NHTSA’s new fuel economy standards will add even more to the price tag, depriving people of safe, affordable vehicles,” House Energy and Commerce Chair Cathy McMorris Rodgers, R-Wash., said in a statement. “These new penalties put an additional burden on manufacturers as well, which will ultimately be passed along to the hardworking people of this country.”
The proposed Corporate Average Fuel Economy (CAFE) standards unveiled on Friday by the National Highway Traffic Safety Administration at DOT would push automakers from a fleet average of 44.2 miles per gallon for passenger vehicles sold in model year 2024 to a fleet average of 57.8 mpg in model year 2032.
The initial reaction from the auto industry was relief that NHTSA’s proposal appeared to be in sync with the EPA’s proposed emission limits, but the industry’s chief lobbying group reiterated that it is still concerned the Biden administration’s overall goals for the shift to EVs is too ambitious.
The auto industry has been vocal in its criticism of the EPA’s tailpipe emission standards. John Bozzella, president and CEO of industry representative the Alliance of Automotive Innovation, wrote in a June blog that the standards are “neither reasonable nor achievable in the timeframe provided” and “opens the door to China,” a leading EV manufacturer.
Bozzella said in a statement on Friday that it’s “encouraging” the new CAFE standards align with the EPA tailpipe emissions standards, since it would avoid situations where automakers might be in line with one standard but not the other. But the best policy would be to “return to a single national standard to reduce carbon in transportation — one vehicle fleet and one national standard.”
Under the CAFE rules, manufacturers are required to meet an average fuel economy standard for all the cars and light trucks they sell in a model year, and they can face stiff fines for falling short of the goal.
Companies get credit for each EV they sell in a model year, bringing down the average fuel economy of all the vehicles sold that year, but in setting the standards NHTSA is not allowed to dictate the types of vehicles sold. Instead it must mandate the “maximum achievable” standard based on the technology available to improve fuel economy.
Last year, NHTSA set standards for model years 2024 through 2026, going from a fleet average of 44.2 mpg in 2024 to 49.1 mpg in 2026.
The proposal announced on Friday would give automakers targets for model years 2027 through 2032, increasing the standard for cars by 2 percent per year, from 60.0 mpg in model year 2027 to 66.4 mpg in model year 2032. For SUVs and light trucks, the standards would increase by 4 percent a year, from 44.4 mpg in 2027 to 54.4 mpg in 2032. The combined fleet average of 48.4 mpg in 2027 would rise to 57.8 mpg in 2032.
NHTSA said the more ambitious target for SUVs and pickups is based on the belief that “there is more room to improve the fuel economy of light trucks, in a cost-effective way” and that the benefits will be “significant” given their high use.
The agency also acknowledged in its proposal that gasoline-powered vehicles will still be part of the mix of new cars and trucks sold for many years to come.
“Energy conservation is still paramount, for the consumer benefits, energy security benefits, and environmental benefits that it provides,” the proposal states. “Moreover, although the vehicle fleet is undergoing a significant transformation now and in the coming years, for reasons other than the CAFE standards, NHTSA believes that a significant percentage of the on-road (and new) vehicle fleet may remain propelled by internal combustion engines (ICEs) through 2032.”
Congress reacts
House and Senate Republicans, however, aren’t convinced that the standards are achievable and, despite NHTSA’s claims otherwise, they say the tailpipe emissions standards, and now CAFE standards, essentially constitute a mandate to switch to electric vehicles.
The EPA regulations proposed in April call for light-duty vehicles, by model year 2032, to reach an industrywide target of producing no more than 82 grams of carbon dioxide for each mile traveled. The current standard is 128.1 grams for model year 2026. In 2018, the agency estimated that the average passenger vehicle emitted about 404 grams of carbon dioxide per mile.
Under those tougher standards that are not yet finalized, the EPA projects that electric vehicles will account for 67 percent of new light-duty vehicles by model year 2032.
The CAFE standard announcement came a day after the House Energy and Commerce Committee advanced a bill in a 27-23 vote from Rep. Tim Walberg, R-Mich., that would prohibit EPA from finalizing the tailpipe emissions rule as well as bar the EPA from mandating the use of any specific technology as part of its vehicle emissions rules.
The CAFE standards are just a continuation of “President Biden’s full regulatory assault to force Americans to buy unaffordable electric vehicles and cede our automotive future to China,” said Rodgers.
Senate Commerce, Science and Transportation ranking member Ted Cruz, R-Texas, has also taken up arms against the EPA standards, warning President Joe Biden’s nominee to lead NHTSA, Ann Carlson, in May against aligning the CAFE standards with the EPA’s tailpipe standards. Carlson withdrew her nomination later that month.
“Today, the Biden administration escalated their war on affordable gas-powered cars and trucks, taking a page from California’s ‘Green New Deal’ playbook,” Cruz said in a Friday statement. “This de facto EV mandate will dramatically raise car prices, weaken energy security, and is likely contrary to the law. I will continue to fight this Bidenomic policy.”
Democrats have largely applauded both standards for saving consumers money at the pump and improving air quality and public health. But Rep. Debbie Dingell, who represents a heavily Democratic district in southeastern Michigan that is at the core of the U.S. auto industry, has been wary about the industry’s ability to achieve those standards.
Dingell said in a statement that she is “encouraged” that the CAFE standards appear to make an effort to align with the EPA emissions standards. She added that she is looking forward to collaborating with the administration and auto industry to establish a “meaningful” final rule.
NHTSA said a 60-day comment period will open on the proposal as soon as it is published in the Federal Register this week.
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