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Biden Admin’s Latest Crackdown on Gas Powered Vehicles

Republican Lawmakers and Automakers Likely to Oppose Proposed Fuel Economy Standards

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The Biden administration has put forth a proposal for new fuel economy standards aiming to save Americans money at the gas pump while also acknowledging that car prices may increase.

These new Corporate Average Fuel Economy (CAFE) standards, introduced by the National Highway Traffic Safety Administration (NHTSA), call for a 2% and 4% improvement in fuel efficiency for passenger cars and light trucks, respectively, starting in 2027.

From 2030 onwards, pickup trucks and work vans will need to achieve a 10% boost in fuel efficiency every year. By 2032, the average U.S. fleet fuel economy could potentially reach 58 miles per gallon.

The Environmental Protection Agency (EPA) informs us that the estimated average fuel economy for model year 2022 cars was 26.4 miles per gallon. This means that if the proposed standards are adopted, automakers will be required to more than double fuel efficiency within a decade or else face significant penalties.

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Secretary of Transportation Pete Buttigieg remarked that improved vehicle fuel efficiency will result in more money in Americans’ pockets and strengthen energy security for the nation.

In their announcement, the DOT and NHTSA projected that the new CAFE standards, if finalized, would bring over $50 billion in fuel savings to consumers over the lifespan of their vehicles.

Additionally, these standards aim to reduce oil dependence by 88 billion gallons through 2050, thereby curbing carbon emissions by more than 900 million tons during the same period. This substantial emissions reduction is equivalent to taking more than 233 million vehicles off the road.

Acting Administrator of the NHTSA, Ann Carlson, expressed her belief that the proposed standards would advance energy security, decrease harmful emissions, and save money for families and businesses at the pump.

However, it is quite likely that the proposal announced on Friday will face substantial opposition from Republican lawmakers, as well as the fossil fuel industry and automakers.

General Motors Vice President of Global Regulatory Affairs, David Strickland, presented data to White House officials suggesting that the CAFE standards could incur costs of up to $300 billion for companies.

Such costs would arise in the form of government fines due to non-compliance with fuel efficiency requirements.

Earlier this year, in March 2022, the NHTSA finalized its proposed CAFE standards for model years 2024-2026. These standards mandate an industry-wide fleet average of approximately 49 miles per gallon by 2026.

The accompanying report acknowledged that this would cost automakers an estimated $236.5 billion and raise car prices by over $1,000.

On a related note, just three months ago, the EPA proposed the most ambitious tailpipe emissions standards ever devised, with the aim of making 67% of new sedan, crossover, SUV, and light truck purchases electric by 2032. The NHTSA claims that its rules will complement and align with the EPA’s emissions standards.

The agency also expressed its willingness to work with the EPA to optimize the effectiveness of these standards while minimizing compliance costs in accordance with applicable statutory factors. NHTSA’s proposal seeks to gather input from all stakeholders on strategies to achieve this goal.

It is worth noting that in May, the White House withdrew its nomination of Ann Carlson to head the NHTSA after facing strong opposition from lawmakers who criticized her for promoting a climate-centered approach, rather than focusing solely on passenger car safety and traffic reduction, which remain the agency’s core missions.

Nevertheless, as the acting administrator of the NHTSA, Carlson remains in charge for now.

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