Automakers are slamming the Biden administration’s proposed fuel economy standards, which would ask them to achieve a corporate average fuel economy of nearly 58 miles per gallon by 2032, according to public comments submitted to the National Highway Traffic Safety Administration.
The Alliance for Automotive Innovation said in a letter that the proposed CAFE standards are not technologically feasible or economically practical and should not consider battery-electric vehicles.
The proposal would increase new vehicle prices by an estimated $3,000 over today’s vehicles, which would likely decrease vehicle sales and increase the average age of vehicles on U.S. roads, Auto Innovators said.
The CAFE standards depend on the mix of vehicles an automaker sells. If they sell more fuel-efficient cars, the average fuel economy will increase. But automakers’ average fuel economy will decline if they sell more light-duty trucks and SUVs, which are usually less efficient.
Auto Innovators, representing 42 automakers and suppliers, said NHTSA’s estimates show the proposed 58 mpg CAFE standard isn’t workable.
The agency estimates vehicle manufacturers will pay more than $14 billion in noncompliance penalties, with 1 in 2 light-duty trucks affected from 2027 to 2032 and 1 in 3 passenger cars affected from 2027 to 2029. NHTSA expects 13 out of 19 automakers would pay penalties in at least one model year.
“The number of non-compliant vehicles and manufacturers projected exceeds reason and will increase costs to the American consumer with absolutely no environmental or fuel savings benefits,” Auto Innovators said. The group added, “In fact, NHTSA projects that the light trucks on average will fail to meet the proposed standards in every year of the program.”
Auto Innovators wants NHTSA to coordinate its CAFE proposal with other agencies and regulations, including the U.S. Environmental Protection Agency’s proposed tailpipe emissions standards, which would essentially require two-thirds of new vehicles to be zero emission.
The group also wants NHTSA to reconsider its use of the U.S. Department of Energy’s petroleum equivalency factor, which would slash BEVs’ fuel economy ratings 72% in model year 2027, if the Energy Department approves its proposed greenhouse gas rule without changes.
“Automakers are subject to five separate regulations on efficiency and reducing climate-related emissions,” Auto Innovators said. “With limited resources (both human and capital), our members need efficient, aligned regulations more than ever.”
The group also said automakers cannot afford to invest in internal combustion engines and EVs simultaneously.
“Unlike the past, where profits from existing ICE vehicles funded investments in the next generation of ICE vehicles, it is generally understood that (for legacy automakers) profits from ICE vehicles will be used to fund the transition to electric vehicles,” Auto Innovators said. The group added it “does not believe that it would be economically practicable to invest the resources necessary to achieve both the non-EV improvements envisioned and the increase in EV market share envisioned.”
Auto Innovators and the American Automotive Policy Council, which represents General Motors, Ford Motor Co. and Stellantis, also disagreed with NHTSA’s plan to require greater annual fuel economy improvements for light-duty trucks. NHTSA recommended that fuel efficiency increase 2% annually for passenger cars and 4% for light-duty trucks starting in model year 2027 based, in part, on the premise that passenger cars already use more advanced fuel economy-related technology.
Auto Innovators said those assumptions were largely unfounded, pointing to higher use of start-stop systems and full hybrid powertrains in light-duty trucks and other factors. AAPC, meanwhile, said NHTSA’s recommended fuel efficiency mandate would result in a 70% mpg increase for trucks by 2032, while passenger cars would only increase their fuel economy by 41%. That would disproportionately affect the Detroit Three automakers — GM, Ford and Stellantis — which sell more trucks in the U.S. than other automakers.
“With significant limits on credit transfers between the fleets, the obvious outcome is that manufacturers specializing in vehicles in the truck fleet face a much greater burden to improve fuel economy,” AAPC said.
According to NHTSA’s estimates, complying with its proposed CAFE standard would cost the Detroit Three an average of $1,620 per vehicle in 2032, while other automakers would pay an average of $530 per vehicle, AAPC said.
The Detroit Three would also pay about $10.5 billion in noncompliance penalties, making up 76% of all such fines, even though GM, Ford and Stellantis comprise 37% of the U.S. market, AAPC said.
“This disparate treatment does not reflect any difference in technical ability—rather, it reflects only that the [Detroit Three] make most of the vehicles in the nation’s truck fleet,” AAPC said.
Tesla, which manufactures and sells EVs exclusively, and environmental groups, including the American Council for an Energy-Efficient Economy, said NHTSA should finalize a more stringent CAFE standard than the agency recommended.
The ACEEE also said NHTSA should make it more difficult for automakers like the Detroit Three to comply with CAFE by selling more trucks.
“The automotive market in the past decade has seen a significant shift toward larger vehicles with light trucks making up a growing share of total light-duty sales and the average footprint of all vehicle types increasing,” the ACEEE said. “This has led to stagnation in average vehicle fuel efficiency and undercuts the benefits of the CAFE program.”
