In the U.S., Republican senators are seeking to eliminate penalties for automakers that fail to meet vehicle fuel economy average standards.
Automakers that do not comply with these CAFE (Corporate Average Fuel Economy) standards face fines. The standards, which have been in effect since 1978, set targets for manufacturers to ensure that the average fuel consumption of the models they offer promotes a reduction in pollution.
Over the last 15 years, the rules have become stricter, forcing the industry to adapt with new, more fuel-efficient powertrains, more hybrid and electric solutions and so on.
Penalties and proposed changes
Manufacturers who do not meet the standards must pay penalties. Stellantis had to pay $190.7 million USD for non-compliance in 2019 and 2020, that after shelling out nearly $400 million USD between 2016 and 2019. Its high-performance models with V8 engines did not help it meet the standards.
General Motors also faced financial repercussions, having paid $128.2 million USD in penalties for 2016 and 2017, to cite a second example.
These penalties could potentially disappear, at least if Republican senators get their way. They aim to abolish the fuel economy fines imposed on manufacturers.
The proposal is part of a new tax bill that would provide relief to businesses, one of its objectives being to offer substantial assistance to Detroit-based U.S. automakers.
The Republican push could ease the financial burden on manufacturers and impact future regulatory compliance strategies.
What it means for the industry
However, a rollback of CAFE standards is certainly not desirable.
The issue will be interesting to follow. If the penalties are eliminated, manufacturers will certainly benefit from a reprieve. However, one should not imagine that they will resume the production or development of more polluting gasoline models, as a change in government could see the penalties return in full force.
Prudence will be key, but this news shows how significant the divide is between Republican and Democratic visions in the United States.