Mpg Requirements

The National Highway Traffic Safety Administration said its fuel economy requirements would reverse a rollback from standards enacted under former President Donald Trump. The new requirements increase fuel consumption by 8% per year for the 2024 and 2025 model years and by 10% for the 2026 model year. The National Highway Traffic Safety Administration (NHTSA) announced that it will increase fuel efficiency requirements by 8% for the 2024 and 2025 model years and by 10% in 2026. This is a slightly larger increase than the proposal presented in August. The EPA finalized its vehicle emissions requirements in December, which run parallel to NHTSA rules. The EPA said its rules would result in 3.1 billion tons of CO2 emissions avoided by 2050. Major automakers on Wednesday backed EPA revisions on challenges raised by some states and ethanol groups. NHTSA rules require an average increase in fuel efficiency of 8% per year for the 2024 and 2025 model years, and then 10% per year for the 2026 model year. But, as NHTSA stated in its preamble to the regulation, “the final fleet-wide level will depend on the mix of vehicles the industry produces for sale in those model years.” Buyers won`t necessarily see an 8% jump in mpg between the 2023 and 2024 Hyundai Kona, only that these higher targets will eventually be met, i.e. by the 2029 model year. NHTSA allows automakers to “continue to develop compliance solutions for regulated model years three model years three model years after the last regulated model year, recognizing that manufacturers do not fully meet CAFE standards in each model year,” the agency said.

NHTSA`s 1230-page document contains a lot of language about the new fuel economy rules, which outline what the agency can and cannot do with respect to these “compliance solutions.” A sticking point for proponents of higher standards is that the government continues to rely on a method of calculating the average savings of a company`s fleet using a fingerprint-based methodology. For decades, CAFE standards divided “passenger cars” and “light commercial vehicles” into separate categories, but for the 2012 model year, new rules were introduced that put us on a footprint-based path. The old rules had their own problems. The Chrysler PT Cruiser, for example, was considered a light truck, although it shared a platform with the Dodge Neon, and was therefore subject to less stringent MPG standards. Because the PT Cruiser slightly exceeded MPG requirements, Chrysler gave more leeway to make the other vehicles in its lineup at the time less fuel-efficient than they would have been on a car if the PT Cruiser had been considered a car. NHTSA`s rules are roughly the same as those previously announced by the Environmental Protection Agency for an average of about 40 miles per gallon in 2026, compared to 32 mpg under Trump rules. Some environmentalists as well as the electric vehicle manufacturer Tesla (TSLA. O) and Rivian (RIVN. O) argued that NHTSA should have introduced more aggressive requirements of 10% per year over the three-year period. NHTSA sets fuel economy requirements, while the Environmental Protection Agency develops limits for greenhouse gas emissions. NHTSA officials said their requirements are close to the rules adopted by the EPA in December, so automakers don`t have to comply with two rules.

The NHTSA press release says updated requirements for models from 2024 to 2026 will reduce fuel economy by more than 200 billion gallons by 2050, compared to maintaining old standards, as well as greenhouse gas emissions and dependence on foreign oil. But car dealerships say stricter requirements drive prices up and push people out of an already expensive new car market. NHTSA expects the new rules to increase the price of a new vehicle by $1,087 in the 2029 model year. John Bozzella, president of the Alliance for Automotive Innovation, said: “The increased regulatory requirements for automakers require supportive guidance as well as regulatory alignment with the EPA to ensure standards can be met. The Environmental Protection Agency released a final version of the updated emissions requirements in December, which work in conjunction with NTHSA rules. The National Highway Traffic Safety Administration said its new fuel economy requirements are the strictest to date and the maximum the industry can achieve during that time. They will reduce gas mileage by more than 220 billion gallons over the life of vehicles by Trump`s standards. Some environmental groups have said the NHTSA`s new requirements under Biden don`t go far enough to combat global warming. Others have backed the new standards as a major step toward reducing emissions, with the American Lung Association calling for even stricter standards to drive the transition to all new zero-emission vehicles by 2035. Some environmental groups have said NHTSA`s new requirements under President Joe Biden don`t go far enough to combat global warming. NHTSA announced Sunday that it has reintroduced a steep increase in penalties for automakers whose vehicles do not meet fuel efficiency requirements for the 2019 model years and beyond.