Federal transportation regulators announced a proposal Friday to boost fuel economy standards to an average of 58 miles per gallon for cars and light-duty trucks by 2032, a step likely to further advance the push toward electrification.
Authorities said the proposal from the National High Traffic Safety Administration, which is part of the U.S. Department of Transportation, would align with a proposed U.S. Environmental Protection Agency rule announced in the spring to limit emissions. The process would also include a 60-day public comment period. After the comment period, the agency would do a review and then issue a final rule, which would be in effect beginning with the 2027 model year.
The Transportation Department, in its announcement, touted potential savings to consumers and benefits to the environment from the rule if implemented as proposed — more than $50 billion in fuel over the vehicles’ lifetimes, a reduction of more than 88 billion gallons of gasoline through 2050 and keeping the equivalent of 233 million vehicles off the road through 2050 because of emissions reductions.
“Better vehicle fuel efficiency means more money in Americans’ pockets and stronger energy security for the entire nation,” U.S. Transportation Secretary Pete Buttigieg said in a news release.
In a likely nod to concerns from some that increasingly stringent rules make vehicles more expensive, officials said the combined benefits would exceed the costs by more than $18 billion. Stellantis CEO Carlos Tavares, while acknowledging the importance of addressing climate change, has raised repeated concerns that the regulatory push toward electrification may price out middle class consumers, and Ford, for instance, is losing money on its EV bet while it and Tesla have pushed a price-cutting strategy to boost sales.
NHTSA officials insisted, however, that this proposal doesn’t mandate electrification, noting that “manufacturers may use all available technologies — including advanced internal combustion engines, hybrid technologies and electric vehicles — for compliance.” Many automakers have announced ambitious EV strategies even as they continue to book big profits from gas- and diesel-powered vehicles.
The preferred alternative in NHTSA’s proposal “includes a 2% per year improvement in fuel efficiency for passenger cars, and a 4% per year improvement for light trucks, beginning in model year 2027 and ramping up through model year 2032, potentially reaching an average fleet fuel economy of 58 miles per gallon by 2032. It also includes a 10% improvement per year for commercial pickup trucks and work vans,” according to the release.
NHTSA Acting Administrator Ann Carlson noted that light trucks start from a lower fuel economy so they have more room for improvement and that heavy trucks and vans would see a big change if the proposal is finalized as envisioned, cutting fuel consumption almost in half for heavy duty pickups and work vans.
The proposal is the latest move by the Biden administration to shift the U.S. vehicle fleet in coming years.
In April, the EPA, under authority given it by the Clean Air Act, proposed historically tougher greenhouse gas emission standards for cars and trucks that it said could lead to electric vehicles accounting for more than two-thirds of all new vehicle sales in the U.S. by 2032 — a remarkable transition to EVs if it were to come to pass. Those standards — which are still being finalized and aren’t expected to be finished until sometime next year — don’t mandate a transition to EVs but so greatly reduce allowable greenhouse gas emissions for the new cars and trucks sold in the U.S. beginning in model year 2027 that it’s hard to see how automakers would meet them otherwise.
For instance, under EPA’s proposed rule., the adjusted fleetwide target for light-duty cars and trucks in model year 2026 of 186 grams of carbon dioxide emitted per mile would be reduced by more than half, to 82 grams per mile fleetwide, by 2032, a reduction of 56%. And standards proposed for medium-duty vehicles like school buses and box trucks would see a 44% reduction compared with model year 2026 standards. The rule would cut emissions from heavy-duty trucks as well.
Unlike in some past administrations, however, the Biden administration has allowed both EPA and NHTSA to issue separate rule-making as is related to fuel emission standards. As a consequence, EPA’s rule announced in April didn’t include mile-per-gallon targets unlike its past emission mandates. Instead, it stuck to allowable amounts of greenhouse gases emitted fleetwide. NHTSA’s new rule, on the other hand, includes mpg standards considered largely in line with EPA’s greenhouse gas targets and the agencies consulted with each other before issuing their rules.
EPA’s rule, meanwhile, has faced some strong pushback. The Alliance for Auto Innovation, a trade group representing most major automakers, has told the agency that while it fully supports the move to electrification, the supply chain and infrastructure hurdles make the prospect of having EVs top 60% of all new car and truck sales in less than a decade a huge challenge. The Alliance’s senior director of energy and environment, Mike Hartrick, said in May it also represented “a significant movement of the country’s electrification goal posts” from Biden’s earlier goal of having EVs make up 50% of sales by the end of the decade. “To be clear, the administration’s 50% target was always a stretch goal,” he said.
Reuters reported this week that the Biden administration has also rejected a warning by GM that its proposed emission standards could cost the auto industry hundreds of billions in fines by 2032. Meanwhile, Republicans, especially in the U.S. House, have been working both to block the new emissions standards from going into place and prohibiting states led by California from moving toward prohibiting the sale of new cars with internal combustion engines, though those measures have little chance of passing in the Democratic-controlled U.S. Senate.
Contact Eric D. Lawrence: elawrence@freepress.com. Contact Todd Spangler: tspangler@freepress.com. Follow Spangler on Twitter@tsspangler. Become a subscriber.