Tesla Lobbies US to Increase Penalties to Automakers for Failure to Comply with Fuel Economy Requirements

Tesla Lobbies US to Increase Penalties to Automakers for Failure to Comply with Fuel Economy Requirements

Photo: Carlo Allegri/Reuters

Tesla is lobbying the administration of President Joe Biden and the U.S. Court of Appeals to increase fines for automakers who fail to comply with fuel economy requirements. Delaying a swift transition to environmentally friendly vehicles should be punished accordingly.

The U.S. sets requirements for vehicle emissions that must be met by automakers. However, not all of them act accordingly, delaying the transition to more environmentally friendly vehicles. As a company whose mission is to accelerate the world's transition to sustainable energy, Tesla cannot remain indifferent to this situation.

The Trump administration, in its final days in January, postponed a 2016 regulation that more than doubled the penalties for automakers failing to comply with the Corporate Average Fuel Economy (CAFE) requirements. Under former President Barack Obama, higher penalties were due to start in the 2019 model year, but Trump set the effective date as the 2022 model year. At the moment, the National Highway Traffic Safety Administration (NHTSA) is considering the possibility of reinstating the Obama rule.

The government memo said Tesla suggested NHTSA withdraw Trump's action immediately, saying it “produces continuing uncertainty in investments and transactions across the industry, and any delays will continue to have deleterious effects on the credit market until the issue is resolved,” Reuters reports.

In April, a court rejected Tesla's request for immediate action pending NHTSA consideration. On August 18, the NHTSA issued a notice saying it could impose higher penalties for previous model years for automakers that did not meet fuel efficiency requirements after reviewing public comments. Automakers have warned that hiking penalties could cost them at least $1 billion annually, both for failing to meet the rules and higher prices for credits used to meet the rules.

On August 27, Tesla separately again asked the Second Circuit U.S. Court of Appeals to quickly reinstate higher penalties. Tesla met with representatives from NHTSA on August 30, according to a document filed by the agency last week.

If these CAFE fines were to be assessed, it would cost violators hundreds of millions of dollars, while increasing the value of credits sold by Tesla.

© 2021, Eva Fox | Tesmanian. All rights reserved.


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Article edited by @SmokeyShorts, you can follow him on Twitter

About the Author

Eva Fox

Eva Fox

Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.

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