London Daily

Focus on the big picture.
Wednesday, Oct 22, 2025

Sharp rise in US fuel efficiency penalties for automakers is boost for Tesla

Sharp rise in US fuel efficiency penalties for automakers is boost for Tesla

The National Highway Traffic Safety Administration has reinstated penalties that could cost manufacturers hundreds of millions
The US National Highway Traffic Safety Administration (NHTSA) has reinstated a sharp increase in penalties for automakers whose vehicles do not meet fuel efficiency requirements for model years 2019 and beyond.

The decision is a win for Tesla that could cost other automakers hundreds of millions of dollars or more.

Confirming an earlier report by Reuters, the NHTSA said the decision “increases the accountability of manufacturers for violating the nation’s fuel economy standards” and the penalty increase “incentivizes manufacturers to make fuel economy improvements”.

Donald Trump’s administration in its final days in January 2021 delayed a 2016 regulation that more than doubled penalties for automakers failing to meet Corporate Average Fuel Economy (Cafe) requirements starting in the 2019 model year.

The NHTSA final rule, which takes effect 60 days after it is published, reinstated the higher penalties and increased them further for the 2022 model year. The agency has not collected penalties for 2019 to 2021 model years while the issue was under review and is the subject of court challenges.

The final rule was signed on Thursday by the NHTSA’s top official, Steven Cliff.

For the 2019 to 2021 model years, the fine is $14, up from $5.50, for every 0.1 mile per gallon new vehicles fall short of required fuel-economy standards, multiplied by the number of non-complying vehicles sold. For the 2022 model year, the fine rises to $15.

Automakers protested against the penalty hike in 2016, warning it could raise industry costs by at least $1bn annually. The decision is expected to cost Chrysler parent Stellantis, for instance, as much as $572m by the company’s prior estimates, while boosting the value of compliance credits sold by Tesla.

Automakers whose vehicles achieve higher fuel economy than required can sell credits to automakers that do not meet Cafe rules.

Under Barack Obama, the higher penalties were set to start with the 2019 model year but the Trump administration set the effective date as the 2022 model year following a court decision.

The NHTSA estimated that for the 2019 model year, automakers would owe $294m at the new rate, up from $115.4m under the prior rate. The NHTSA added automakers that made plans for 2019 through 2021 “thinking that penalties would not increase did so at their own risk”.

The head of a trade group representing nearly all large automakers except Tesla said Sunday it would be a “better outcome” if the penalties “were invested in electric vehicles, batteries and charging infrastructure instead of disappearing into the general fund of the Treasury”.

In August, the NHTSA proposed hiking Cafe requirements by 8% annually for 2024 through 2026, reversing a Trump-era regulation that rolled back higher requirements starting in the 2021 model year. The NHTSA is expected to issue its final Cafe rules through 2026 this week.

On Sunday, Stellantis said it would “like to work with the administration and Congress to allow the agencies to use the proceeds from penalties to bolster investments in the technologies and infrastructure required to accelerate a robust US market for EVs”.

Tesla did not immediately respond to a request for comment.

Congress in 2015 ordered federal agencies to adjust civil penalties to account for inflation. US fuel economy fines lost 75% of their original value, having risen only once since 1975, from $5 to $5.50 in 1997.
Newsletter

Related Articles

0:00
0:00
Close
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
Bessent Accuses China of Dragging Down Global Economy Amid New Trade Curbs
U.S. Revokes Visas of Foreign Nationals Who ‘Celebrated’ Charlie Kirk’s Assassination
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
×