Trump Administration Gives Automakers a Pass on Fuel Efficiency Fines

by | Jul 16, 2019

The Trump administration signaled plans to freeze fuel efficiency fines for automakers, rolling back an Obama-era regulation to increase these penalties over time.

Under Obama, the National Highway Traffic Safety Administration (NHTSA) was on track to raise fines from $5.50 to $14 for every tenth of a mile they fell short of the standards. Late on Friday, the Trump administration said that NHTSA would issue final rules suspending the regulation, David Shepardson reported for Reuters.

“NHTSA said it was faithfully following the intent of Congress to ensure the penalty rate was set at the level required by statute,” he wrote. “It expected this final rule to significantly cut the future burden on industry and consumers by up to $1 billion a year.”

Back in 2017, Trump’s stance on completely rolling back fuel efficiency standards prompted mixed responses from automakers. Last year, when the administration proposed freezing the standards for six years, automakers released cautious statements.

The White House broke off talks with California’s top clean air regulator in February. A group of 17 automakers that included General Motors, Toyota, and Volkswagen sent a letter to California Governor Gavin Newsom last month urging a compromise between the Obama-era standards and Trump’s proposal, Shepardson reported at the time. Eighteen states, including California, have vowed to sue the Trump administration if the vehicle emissions requirement freeze becomes finalized.

Now the Trump administration is trying a different approach: rewriting the rules to lower fines for missing emissions targets.

The Alliance of Automobile Manufacturers, a trade association representing 12 of the world’s largest car manufacturers, praised the administration’s announcement on Friday, according to Shepardson. The increased fines could cause industry compliance costs to go up by $1 billion annually, the group said.

A spokeswoman for the group told Reuters, “[NHTSA’s] own model clearly shows the significant economic harm that such a dramatic and unjustified increase in penalties would have on auto manufacturers, workers, and ultimately consumers.”

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