Biden Administration’s Fuel Economy Proposal Faces Criticism from Automotive Group

The Biden administration’s proposal to increase fuel economy standards until 2032 has been met with opposition from the Alliance for Automotive Innovation, an industry group representing major automakers. In a statement released on Friday, the group argued that the National Highway Traffic Safety Administration’s Corporate Average Fuel Economy (CAFE) proposal is not feasible and could result in over $14 billion in fines for automakers between 2027 and 2032.

According to the Alliance for Automotive Innovation, the proposed standards exceed the maximum feasibility, and the projected fines would impact a significant number of light trucks and passenger cars. A separate document revealed that the Detroit Three automakers – General Motors, Ford Motor, and Stellantis – could face approximately $10 billion in CAFE fines during the specified period.

The automotive industry is facing challenges globally as efforts to reduce vehicle emissions and transition to electric vehicles encounter resistance due to cost concerns. Just this week, European Union ministers agreed to water down a proposal on new vehicle emissions.

In response to the criticism, a spokesperson from the National Highway Traffic Safety Administration stated that the estimate provided by automakers aligns with the agency’s forecast and statutory obligations. The spokesperson also highlighted that automakers have the option to use electric vehicles to comply with the standards and avoid penalties altogether.

The Alliance for Automotive Innovation expressed concerns that the projected average price increase of $3,000 per vehicle would likely decrease sales and increase the average age of vehicles on the road, without providing significant environmental or fuel savings benefits.

It is worth noting that similar concerns were raised about the Environmental Protection Agency’s proposal, which aims to have 67% of new vehicles be electric by 2032. The auto group previously criticized the EPA’s proposal as unreasonable and unachievable.

Efforts to balance environmental goals with the economic impact on the automotive industry continue to be a topic of debate. As discussions and negotiations unfold, stakeholders will work towards finding a solution that addresses both environmental concerns and the financial viability of the industry.