Biden administration proposes new fuel economy standards, with higher bar for trucks

The Biden administration has proposed new fuel economy standards that require cars to improve fuel economy by 2% per year, and light trucks by 4% annually, until 2032.

The proposal: The new standards by the National Highway Transportation Safety Administration aim to increase fuel economy for new vehicles to nearly 58 miles per gallon by 2032, up from the 49 mpg required by 2026 under the current rules.
* This proposed change is open for public comment for 60 days, and automakers who fail to meet these Corporate Average Fuel Economy (CAFE) standards could face heavy penalties.

The impact on EVs: With both California and the Environmental Protection Agency emphasizing a shift towards electric vehicles (EVs), the new fuel economy requirements stand as a potential encouragement for EV production.
* As of now, EVs constitute just over 7% of sales, although they are projected to hit 28% by 2026.
* The production of more EVs helps automakers meet the fuel economy standards, as the regulations are calculated across a manufacturer’s entire fleet.

Critics’ views: While environmental groups believe the new rules lack ambition in combating climate change, car manufacturers argue that improving gas-powered vehicles could interfere with their switch to EVs.
* The Alliance for Automotive Innovation noted that an effort seems to have been made to align NHTSA’s standards with EPA’s, which, despite being considered unrealistic, is preferable for clarity.

The effect on trucks: The proposed standards place a stricter requirement for trucks, as they are expected to improve at a faster rate than smaller vehicles due to more room for efficiency gains.
* This rule is important given the popularity of larger vehicles and the quantity of fuel they consume. Major auto manufacturers like General Motors and Stellantis have each paid out more than $100 million in fees for CAFE non-compliance over the last six years.

View original article on NPR

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