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

The Biden administration’s proposal to increase fuel economy standards through 2032 has drawn criticism from the Alliance for Automotive Innovation, an industry group representing major automakers. The group, which includes General Motors, Toyota Motor, Volkswagen, Hyundai, and others, argues that the National Highway Traffic Safety Administration’s (NHTSA) 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 NHTSA’s proposal exceeds maximum feasibility, and the projected fines would impact a significant portion of light trucks and passenger cars during the specified period. A separate document suggests that the Detroit Three automakers – GM, Ford Motor, and Stellantis – could face approximately $10 billion in CAFE fines.

The automotive industry is facing challenges worldwide in reducing vehicle emissions and transitioning to electric vehicles due to cost concerns. Recently, European Union ministers diluted a proposal on new vehicle emissions. However, the NHTSA spokesperson defended the agency’s estimate, stating that automakers are free to adopt electric vehicles to comply with the standards and avoid penalties altogether.

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

This criticism echoes concerns raised about the Environmental Protection Agency’s (EPA) proposal, which aims to have 67% of new vehicles be electric by 2032. The auto group previously called the EPA’s proposal “neither reasonable nor achievable,” while Toyota described the EPA’s stringency requirements as “extreme and outside historical norms.”

Efforts to balance environmental goals with industry feasibility and consumer impact continue to be a topic of debate. As the Biden administration pushes for stricter fuel economy standards, the automotive industry seeks a balanced approach that ensures both environmental progress and economic viability.