CAFE Rules Could Result in Billions in Fines for GM, Stellantis, and Ford

author: FutureCar Staff    

The Biden administration has proposed a potential hike in fuel economy standards through 2032, which could result in significant penalties for General Motors, Stellantis, and Ford. According to reports, General Motors could face $6.5 billion in penalties, Stellantis up to $3 billion, and Ford $1 billion.

The National Highway Traffic Safety Administration (NHTSA) has proposed increasing the Corporate Average Fuel Economy (CAFE) standards to a fleet-wide average of 58 mpg by 2032. The plan suggests a 2% annual increase in requirements for passenger cars and a 4% annual increase for pickup trucks and crossovers.

In response to the proposed regulations, the American Automotive Policy Council, representing GM, Stellantis, and Ford, wrote a letter to the U.S. Energy Department. The letter highlighted that if the Detroit Three fail to meet the new CAFE regulations, they would face significant fines. It also mentioned that the compliance costs for GM, Ford, and Stellantis would be around $2,151 per vehicle, compared to the average of $546 per vehicle for other car manufacturers.

Another group representing major car manufacturers believes that the new regulations could result in the industry as a whole facing $14 billion in fines.

The Department of Energy has requested additional information from the Detroit Three to better understand the specific challenges related to product development lead time.

The NHTSA has previously stated that car manufacturers are free to use electric vehicles to comply with the regulations and avoid penalties altogether.

Earlier this year, it was revealed that Stellantis paid $235.5 million in CAFE fines for the 2018 and 2019 model years, while GM paid $128.2 million for the years 2016 and 2017. This marked the first time that GM had paid fines in the 40 years since the CAFE program was established, as the company chose to pay fines instead of purchasing credits.

FutureCar Staff