ARKANSAS, Oct 17 (Future Headlines)- A coalition of major automakers, including General Motors, Toyota, and Volkswagen, has strongly criticized the Biden administration’s proposal to significantly increase fuel efficiency requirements in the United States. The Alliance for Automotive Innovation, representing nearly all major automakers, expressed concerns about the National Highway Traffic Safety Administration’s (NHTSA) Corporate Average Fuel Economy (CAFE) proposal. This critique highlights the potential challenges automakers may face in meeting these requirements, the impact on vehicle prices, and the feasibility of the proposed changes.

The Alliance for Automotive Innovation has declared that NHTSA’s CAFE proposal is unreasonable and has requested significant revisions to the plan. One of the primary concerns is that the proposal would result in an increase of approximately $3,000 in the average price of vehicles by 2032 due to penalties imposed on automakers for non-compliance. The group contends that this financial burden is excessive and would raise costs for American consumers without delivering significant environmental or fuel savings benefits.

In July, NHTSA proposed an increase in fuel efficiency requirements of 2% annually for passenger cars and 4% annually for pickup trucks and SUVs, spanning from 2027 to 2032. This ambitious plan aims to achieve a fleet-wide average fuel efficiency of 58 miles per gallon (93 kilometers per gallon).

The American Automotive Policy Council, which represents the Detroit Three automakers (Ford, General Motors, and Stellantis), has also weighed in, suggesting that NHTSA should reduce the proposed fuel economy increases to 2% annually for trucks. The council points out that these changes would disproportionately impact the truck fleet. It’s worth noting that 83% of vehicles produced by the Detroit Three are trucks.

The Alliance for Automotive Innovation estimates that automakers would face over $14 billion in non-compliance penalties between 2027 and 2032 if the current proposal is implemented. U.S. automakers have issued warnings about the potential financial consequences, with GM projecting fines of $6.5 billion, Stellantis facing $3 billion in penalties, and Ford anticipating $1 billion in fines.

  • Concerns About Electric Vehicles (EVs)

Another significant concern raised by automakers pertains to the Energy Department’s proposal to revise how it calculates the petroleum-equivalent fuel economy rating for electric vehicles in NHTSA’s CAFE program. Automakers contend that these changes would devalue the fuel economy of electric vehicles by 72%.

General Motors has indicated that it would be supportive of NHTSA’s proposal if the Energy Department were to rescind its petroleum-equivalent proposal, aligning with industry-wide concerns about the rating’s impact on electric vehicle efficiency.

Volkswagen, which could face over $800 million in CAFE fines through 2032, has criticized NHTSA’s proposal as arbitrary and an abuse of the agency’s discretion, arguing that the proposed standards are not feasible.

Subaru has raised concerns about the lack of sufficient time for fleet ramp-up to meet the required levels of electric vehicles if NHTSA’s proposal is deemed feasible.

The automotive industry’s strong opposition to the Biden administration’s fuel efficiency plan underscores the complexity and contentious nature of balancing environmental goals with the practical challenges faced by automakers. This dispute could significantly impact the future trajectory of vehicle production, pricing, and the growth of electric vehicles in the United States. The outcome of these debates will be crucial in shaping the future of the American automotive landscape.

Reporting by Sarah White