Washington — The Biden administration plans to cut vehicle fuel consumption almost in half by 2035, according to new proposed Corporate Average Fuel Economy standards released Friday by the U.S. Department of Transportation’s National Highway Traffic Safety Administration.
The rules would once again increase fuel efficiency, pushing car companies to meet an estimated 58 miles per gallon average fuel economy by model year 2032. It would require automakers to improve fuel efficiency by 2% every year for cars and 4% per year for light trucks beginning in model year 2027.
The proposed standards also would increase fuel economy standards for heavy-duty pickup trucks and work vans by 10% annually model years 2030 to 2035. Combined, NHTSA estimates that the country’s total fleet fuel consumption would be cut by 48% by model year 2035.
Comparatively, a 2022 rulemaking bumped up the existing standard to 49 miles per gallon fleetwide by model year 2026, with 8% efficiency increases in model years 2024 and 2025 and a 10% increase in model year 2026. For model year 2023, passenger cars must get 50.5 miles to the gallon and light-duty trucks must get 35.8 miles to the gallon.
The agency can’t consider electric vehicles or alternative fuels in determining whether automakers can feasibly comply with the rules. But car companies can use EVs to meet the requirements — meaning regulators believe car companies could meet the requirements even if they were not pivoting to EVs. NHTSA estimates the proposed standards would result in an estimated 56% EV market penetration by 2032, Acting Administrator Ann Carlson said Friday.
“These targets are consistent with Congress’ direction to conserve fuel and promote American energy independence and American auto manufacturing,” Carlson said. The agency’s proposal would save Americans more than 88 billion gallons of gas from now until 2050, she said, an estimated $52 billion in savings.
If implemented, NHTSA estimates the rules would also prevent more than 900 million tons of carbon dioxide emissions from going into the atmosphere and that the benefits of the proposal will exceed its cost by more than $18 billion.
The rules account for “significant improvements in technology over the last 10 and 15 years. We look at the availability and innovation that’s taken place in the automotive sector, and it’s truly staggering,” White House Climate Adviser Ali Zaidi said. “The United States has gone from really chasing on this technological shift that’s taking place to becoming the literal number one destination for private investment on EVs.”
The administration intended to develop a set of standards “that is certain, reliable, common sense, and that continues to” accelerate EV investments in the United States, Zaidi said.
NHTSA’s plan uses a new method proposed by the Department of Energy to calculate fuel economy that would make it harder for automakers to meet the standards. The current calculation strategy hasn’t been changed in more than 20 years.
The costs to automakers will vary by manufacturer, NHTSA said, but the agency is legally bound to consider “technological feasibility and economic practicability” when determining the rule, Carlson said.
The proposal aligns with proposed Environmental Protection Agency emissions standards unveiled in April that would be the strongest in U.S. history and push automakers to sell more than two-thirds EVs by 2032.
Those rules were praised by environmental and consumer groups but received a torrent of criticism from automakers and Republicans, who argue they would function as a de facto EV mandate. The Alliance for Automotive Innovation, a lobbying group representing most major automakers selling vehicles in the United States, called them “neither reasonable nor achievable.”
It is “encouraging” that NHTSA developed the rule to align with EPA’s, Alliance for Automotive Innovation CEO John Bozzella said in a statement, though he noted the group’s concerns with the feasibility of the EPA rule. “Conflicting and overlapping rules are complex and expensive. If an automaker complies with EPA’s yet-to-be-finalized greenhouse gas emissions rules, they shouldn’t be at risk of violating CAFE rules and subject to civil penalties that levy costs on consumers and manufacturers — but deliver no corresponding environmental benefits.”
Environmental groups praised the spirit of the proposed fuel economy rule but urged the administration to go further and adopt the strongest possible standards.
Sierra Club’s Katherine Garcia said the proposed standard is “achievable and will help automakers deliver what consumers are asking for.” Ann Mesnikoff of the Environmental Law and Policy Center said the group is “disappointed that this proposal is not more ambitious given the climate crisis.” And Dan Becker of the Center for Biological Diversity said the rules don’t “knock our socks off,” though the proposal does “help tackle the ‘truckification’ of the fleet” by implementing stronger standards for larger vehicles.
In a July 17 meeting with the White House, General Motors Co. Vice President for Global Regulatory Affairs David Strickland argued that even if automakers met the EPA’s metric of 67% new car sales being electric by 2032, it would still result in a compliance gap with CAFE standards costing the industry $100 billion in penalties.
Carlson said the agency does “not agree in any way” with GM’s analysis. Zaidi called it “inapplicable” and “not grounded in anything resembling what the proposed rule is.”
If automakers did not use EVs to comply with the standards, Carlson said, the agency estimates total penalties in 2031 would be around $2.4 billion. If automakers do use EVs to comply, NHTSA estimates there would be no penalties.
GM said in a statement Friday that the company’s “commitments and investments in an all-electric future place GM in an excellent position to contribute to the Administration’s goals. We welcome the intent to align NHTSA and EPA standards and providing flexibility to industry to achieve those targets.”
Stellantis NV said in a statement that it “remains committed to our aggressive timelines and investments as we electrify our products and pursue our Dare Forward targets.” It added that it’s “critical” that federal regulations for fuel economy and emissions are “harmonized and work effectively together.” It is “a positive sign that the (proposal) acknowledges that harmonizing the rules will require a deliberate effort, and we are prepared to provide the agencies data they need to align these programs so Stellantis can focus our resources on reducing emissions from our vehicles.”
Reached for comment Friday, Ford Motor Co. said it looks “forward to reviewing the proposal and working with the agency to finalize a rule that provides regulatory certainty.”
A 60-day public comment period begins when the proposal is published in the Federal Register.
rbeggin@detroitnews.com
Twitter: @rbeggin