The U.S. Department of Energy has eased the provisions of its new fuel economy rules, enabling GM and other automobile manufacturers to claim higher fuel economy credits from their existing EV models and thus potentially spare themselves billions of dollars in fines.
As Reuters reports, the revision to fuel economy regulations comes as President Joe Biden and challenger Donald Trump wrangle for electoral success in Michigan with its powerful voting bloc of auto sector workers.
The Energy Department’s shift was first reported on Monday, and confirmed with the release of the final rule on Tuesday. In its new form, the rule will allow automakers to claim much higher fuel economy for their EV models, thus providing “credits” to offset their continued production of ICE and hybrid models and potentially sparing them the fines they would have had to pay under the original rule.
The NHTSA published a set of proposed rules in summer 2023, which triggered pushback from GM and other automakers. The car companies stated the new fuel economy standards were impossible to achieve in the time allowed, and would result in “over $14 billion in non-compliance penalties between 2027 and 2032.”
The Alliance for Automotive Innovation further claimed the rules as presented would “increase costs to the American consumer with absolutely no environmental or fuel savings benefits,” with vehicle prices driven at least $3,000 higher by 2032 by the penalties alone. GM was expected to pay $6.5 billion in penalties by 2033, an expense it would likely pass on to customers.
Notably, the original version would have undermined the effect of producing EVs by slashing their effect on a company’s overall fuel economy rating, with 72 percent of EVs’ “petroleum-equivalent fuel economy” removed by 2027. Thus, automakers would get little benefit from making electric vehicles and would likely be fined regardless of electrification efforts, incentivizing them to develop ICE vehicles with better fuel economy instead.
The new version of the rule eases off on some of the most stringent provisions. EVs will only lose 65 percent of their “petroleum-equivalent fuel economy,” with the timeframe extended to 2030 rather than 2027. The final rule will likely see automakers pushed to build less than 50 percent of their vehicles as EVs by 2030, instead of the original 60 percent.
The rules also make it more viable to produce hybrid models, which are in significantly higher demand after consumer enthusiasm for EVs weakened somewhat in recent months. GM has recently announced plans to reintroduce PHEVs (plug-in hybrid electric vehicles) in North America.
Meanwhile, environmental groups continue to call for the most stringent rules possible to prevent automakers from producing a few EVs and receiving an outsized fuel economy credit from them.
National Resources Defense Council lawyer Pete Huffman says he looks forward to the end of high EV fuel economy ratings in 2030 to 2032, noting approvingly that “the automakers’ free ride is over.”
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Comments
“Automakers get to poison us more”
FIFY
This is only happening because Biden is up for reelection. Desperate times call for desperate measures. If he wins again, then they will double down on the EV push. Hopefully the average vote counter will see this. Cause as we all know, it’s not the voter that decides the elections, it’s the counter.
he wont get in.not after the sh-t show the democrats re putting on.they are MORONS.
Uh, have you seen the other side? In-fighting, quitting with days notice, over-reach, back stabbing, “don’t do what the far-far right wants we’ll vote you out even if it means we lose our majority”…..the whole place is a joke. Vote them ALL out.
If the automakers are paying these fines, then that leaves less money for executive bonuses and stock buybacks. I’m so tired of hearing about the poor large corporations.
Can James say “$80,000 Silverados”?
Automakers and other large corporations don’t pay fines and taxes, their customers are the ones who are paying.
Yep. Get the auto companies to pay the fines and tax the people without them even noticing.
Apparently there wasn’t a baby around for Biden to get distracted and then wander into the press audience before he signed this bill.
Oh, don’t you worry…he groped and sniffed 3 of them on the way to the podium, where he proceeded to get disoriented and lost.
Now that we have locked in the climate alarmist vote, let’s ease up on the insane regulation to try and win back some normal voters. The alarmist will never notice.
What a scam. Completely unnecessary government intervention in the marketplace increasing costs and reducing consumer choice. If EVs are so great they do not need to be subsidized and mandated by anti-consumer regulations.
Mandates will be your new Freedom if more of the same continues. No more freedom of choice an anything.
Like mandating women to carry unwanted pregnancy to term?
Like mandating that embryos are children and removing IVF as an option for women that want to get pregnant and have kids?
Removing freedom of choice is a GOP concept
Who’s mandating that irresponsible women have babies? Killing babies is readily available, as are 29 methods to NOT get pregnant….
Pregnancy is 100% always the fault of a man. No man, no pregnancy.
But also, you never heard of rape?
Woman is just an innocent bystander who watched TV and ate popcorn while copulating?
Easy to flip this one around and say “no woman, no pregnancy”.
Guy try to fertilize their handkerchiefs and the sink, but we all know those can’t get pregnant…