US tells automakers they face no fuel economy penalties for last three years
The tax and budget bill approved by Trump ends penalties for not meeting Corporate Average Fuel Economy rules under a 1975 energy law.
The National Highway Traffic Safety Administration said in a letter to automakers seen by Reuters it is working on its reconsideration of fuel economy rules. The decision is one of a number made by Washington to make it easier for automakers to build gasoline-powered vehicles and to make electric vehicle sales more costly.
Last year, Chrysler-parent Stellantis paid $190.7 million in civil penalties for failing to meet U.S. fuel economy requirements for 2019 and 2020 after paying nearly $400 million for penalties from 2016 through 2019. GM previously paid $128.2 million in penalties for 2016 and 2017.
Trump last month signed a resolution of disapproval under the Congressional Review Act to bar California's landmark plan to end the sale of gasoline-only vehicles by 2035.
Last year, Tesla said it received $2.8 billion in global revenue from regulatory credits it earns from selling zero-emission EVs and sells to other automakers seeking to meet vehicle emissions targets.
Republican Senator Bernie Moreno of Ohio said the costs automakers paid Tesla to be in compliance were "outrageous".
Trump NHTSA Administrator nominee Jonathan Morrison said Wednesday at a Senate hearing "at the end of the day a consumer is going to pay for that."
The law signed by Trump this month specifies that vehicle fines would be eliminated for any year that NHTSA had not finalized.
Dan Becker, director of the Center for Biological Diversity's Safe Climate Transport Campaign, criticized the decision.
"The Trump administration is reaching back in time to give an obscene gift to pollution law violators GM and Stellantis at the expense of the American taxpayer," Becker said. "The automakers lobbied hard for this 'get out of jail free' card. They get hundreds of millions in fines canceled."
GM and Stellantis did not immediately comment. Senate Republicans estimated the law would save automakers $200 million.
The Alliance for Automotive Innovation, a trade group representing nearly all major automakers, thanked congressional leaders for addressing concerns about fuel economy rules saying "given current market conditions, the existing standards were challenging for many auto manufacturers to achieve."
In 2023, under former President Joe Biden, NHTSA said its proposal to hike fuel economy standards through 2032 would cost the industry $14 billion in projected fines including $6.5 billion for GM, $3 billion for Stellantis and $1 billion for Ford Motor.
The final rule adopted in 2024 eased requirements and said the auto industry would face no more than $1.83 billion in fines from 2027 through 2031.>
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