US-based National Highway Traffic Safety Administration [NHTSA] which is also responsible with writing and enforcing Federal Motor Vehicle Safety Standards as well as regulations for motor vehicle theft resistance and fuel economy, the latter under the rubric of the Corporate Average Fuel Economy (CAFE) system has decided to postpone increased fines for fuel economy violations for a few years. The original ruling, which was made in July 2016 would have gone into effect this year and applied to 2015 model year vehicles. Now the fine increase won’t be enforced until the 2019 model year.
The increase in fines the automakers were likely to face was substantial. The way the fine works currently is that for every tenth of a mile per gallon the automaker is over the limit, it is charged US$5.50. That cost is then multiplied by every car the company sold in that model year. The increase would have brought the US$5.50/car fine to US$14.00, with NHTSA’s reasoning being that the fine hadn’t changed since the 1998 model year. Even with the current US$5.50 figure, though, fines can reach into the millions, based on past NHTSA fines. The increase would make those fines even more massive. For example, Jaguar Land Rover was fined US$14,110,470 in 2013 using the current method. Substituting the US$14.00 figure into the equation, and the fine would become US $35,917,560.
According to The Detroit News, the fine increase was delayed in part due to lobbying by the Alliance of Automotive Manufacturers and the Association of Global Automakers. The lobbyists argued that the retroactive application, plus the fact that car companies had finalized plans for models up to 2018 before this new rule was made, made it so that automakers were unable to adjust to and address the rule.
Currently, the EPA is trying to finalize the proposed 2025 CAFE target of 54.5 mpg. Meanwhile, automaker lobbyist groups are pushing to bring that number down. The next few months should be pretty interesting.