Arab Press

بالشعب و للشعب
Friday, Aug 22, 2025

Sharp rise in US fuel efficiency penalties for automakers is boost for Tesla

Sharp rise in US fuel efficiency penalties for automakers is boost for Tesla

The National Highway Traffic Safety Administration has reinstated penalties that could cost manufacturers hundreds of millions
The US National Highway Traffic Safety Administration (NHTSA) has reinstated a sharp increase in penalties for automakers whose vehicles do not meet fuel efficiency requirements for model years 2019 and beyond.

The decision is a win for Tesla that could cost other automakers hundreds of millions of dollars or more.

Confirming an earlier report by Reuters, the NHTSA said the decision “increases the accountability of manufacturers for violating the nation’s fuel economy standards” and the penalty increase “incentivizes manufacturers to make fuel economy improvements”.

Donald Trump’s administration in its final days in January 2021 delayed a 2016 regulation that more than doubled penalties for automakers failing to meet Corporate Average Fuel Economy (Cafe) requirements starting in the 2019 model year.

The NHTSA final rule, which takes effect 60 days after it is published, reinstated the higher penalties and increased them further for the 2022 model year. The agency has not collected penalties for 2019 to 2021 model years while the issue was under review and is the subject of court challenges.

The final rule was signed on Thursday by the NHTSA’s top official, Steven Cliff.

For the 2019 to 2021 model years, the fine is $14, up from $5.50, for every 0.1 mile per gallon new vehicles fall short of required fuel-economy standards, multiplied by the number of non-complying vehicles sold. For the 2022 model year, the fine rises to $15.

Automakers protested against the penalty hike in 2016, warning it could raise industry costs by at least $1bn annually. The decision is expected to cost Chrysler parent Stellantis, for instance, as much as $572m by the company’s prior estimates, while boosting the value of compliance credits sold by Tesla.

Automakers whose vehicles achieve higher fuel economy than required can sell credits to automakers that do not meet Cafe rules.

Under Barack Obama, the higher penalties were set to start with the 2019 model year but the Trump administration set the effective date as the 2022 model year following a court decision.

The NHTSA estimated that for the 2019 model year, automakers would owe $294m at the new rate, up from $115.4m under the prior rate. The NHTSA added automakers that made plans for 2019 through 2021 “thinking that penalties would not increase did so at their own risk”.

The head of a trade group representing nearly all large automakers except Tesla said Sunday it would be a “better outcome” if the penalties “were invested in electric vehicles, batteries and charging infrastructure instead of disappearing into the general fund of the Treasury”.

In August, the NHTSA proposed hiking Cafe requirements by 8% annually for 2024 through 2026, reversing a Trump-era regulation that rolled back higher requirements starting in the 2021 model year. The NHTSA is expected to issue its final Cafe rules through 2026 this week.

On Sunday, Stellantis said it would “like to work with the administration and Congress to allow the agencies to use the proceeds from penalties to bolster investments in the technologies and infrastructure required to accelerate a robust US market for EVs”.

Tesla did not immediately respond to a request for comment.

Congress in 2015 ordered federal agencies to adjust civil penalties to account for inflation. US fuel economy fines lost 75% of their original value, having risen only once since 1975, from $5 to $5.50 in 1997.
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
×