A recent article published by Reuters points out the US National Highway Traffic Safety Administration (NHTSA) is issuing more stringent fines for automakers that aren't meeting fuel economy mandates. While the new rules may cost many automakers a pretty penny, Tesla stands to benefit in a big way.
The fines were already supposed to be doubled based on Corporate Average Fuel Economy (CAFE) requirements. However, the Trump administration delayed the previously agreed-upon regulations. Automakers pushed back against the proposed fines in 2016, arguing they would raise costs exorbitantly.
Now, Reuters has confirmed that the NHTSA will, in fact, make automakers accountable at a much higher level if they violate the mandates. Upping the fines will work to compel carmakers to improve fuel economy more quickly, which was the whole point of the earlier rule changes prior to their forced delay.
The NHTSA signed the rule late last week, though it appears the organization hasn't yet officially published it. Once the rules are considered final and formally published, they will take effect in 60 days.
Reuters also notes that the NHTSA has yet to collect fines from automakers based on vehicles from the 2019-2021 model years since the rules were under review. The new mandate says the fine for 2019-2021 model-year vehicles is now set at $14 for every 0.1 mpg below the required threshold. The old rule was set at just $5.50. For 2022 model-year cars, the fine will be $15.
Automakers that make vehicles that are more efficient can sell credits to other brands that aren't meeting the requirements. This was commonplace in the past, and Tesla benefitted from selling the regulatory credits.
According to Reuters, the new policy could cost Stellantis a maximum of nearly $600 million. Overall, the NHTSA estimates that for the 2019 model year alone, automakers may have to collectively pay $294 million, which would have been $115 million under the prior mandates.
The NHTSA shared that automakers that expected the fines to remain the same were taking a risk. Former President Barack Obama's administration set the new rules to take effect beginning with the 2019 model year. However, the Trump Administration's delay forced them back to 2022, so the changes arguably should have been expected this year.
Reuters writes that the NHTSA is expected to publicize its final CAFE rules through 2026 sometime this week.
