U.S. May Roll Back Tougher CAFE Penalties

The Trump administration is signaling it may ease an Obama-era proposal to more than double the amount carmakers pay when their vehicles fall short of federal fuel economy standards.

Bloomberg News notes that since 1975 carmakers have faced a fine of $55 for each mile-per-gallon of shortfall, multiplied by the number of affected vehicles sold in the U.S. Manufacturers have paid nearly $900 million in penalties since then.

In 2015 Congress ordered all federal agencies to adjust their civil penalties to reflect inflation. The National Highway Traffic Safety Administration calculated its 40-year-old rates should jump to $140 per mpg, beginning with the 2019 model year.

But carmakers, who now face a sharp uptick in fuel economy standards beginning in 2021, have asked NHTSA under the Trump administration's more pro-business leadership to reconsider the size of its adjustment. The agency has delayed next year's scheduled increase pending public comment and its own reassessment.

Bloomberg notes that the makers of light-duty trucks and crossover vehicles and foreign luxury cars would benefit most from a break on fines. NHTSA says the number of affected models and producers is likely to expand if fuel economy standards rise as proposed. The Trump administration separately has ordered a review of those increases and the timetable for achieving them.