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  • Writer's pictureCapitol Times

U.S. increases fines for non-compliance with fuel economy standards following victory for Tesla




Automakers whose vehicles do not meet new fuel efficiency specifications for model years 2019 and beyond will face sharply increased penalties, the U.S. National Highway Traffic Safety Administration announced on Sunday.


In a statement, the NHTSA confirmed an earlier Reuters report that the decision "increases the accountability of manufacturers for violating fuel economy standards" and the penalty increase "incentivizes manufacturers to strive to improve fuel economy."


As of the 2022 model year, the NHTSA's final rule, which takes effect 60 days after its publication, reinstated the higher penalties and increased them further. While the issue was being reviewed and court challenges were being filed, the agency failed to collect penalties for the model years 2019 to 2021.


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


29 March 2022

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