U.S. Carmakers Slam Biden’s Fuel Efficiency Plans

All major carmakers in the United States have united against proposed rules for higher fuel efficiency that would threaten them with fines totaling some $14 billion in the five years from 2027 to 2032.

In July, the National Highway Traffic Safety Administration proposed hiking fuel efficiency limits by an annual 2% for passenger cars and by 4% for trucks between 2027 and 2032. That, the NHTSA said, would lead to an average fuel efficiency boost to 58 miles per gallon.

"If finalized as proposed, the updated standards would save Americans hundreds of dollars at the pump," the NHTSA said at the time in a press release, "all while making America more energy secure and less reliant on foreign oil."

Carmakers, however, are not on board with the idea at all. They have argued that these higher requirements will add some $3,000 to car prices by 2032 because of the penalties that car manufacturers will be liable to.

The plan, carmakers said this week, as quoted by Reuters, "exceeds reason and will increase costs to the American consumer with absolutely no environmental or fuel savings benefits."

Opponents include GM, Volkswagen, Toyota Motor and others. Volkswagen said the fuel efficiency plan was "arbitrary, capricious, and an abuse of the agency's discretion to set standards that are not feasible."

Separately, the American Automotive Policy Council, which represents the Detroit Three, slammed the proposal, insisting that the NHTSA halve its target for trucks because the current target would affect the truck fleet disproportionately.

Carmakers are also unhappy with plans to change the way regulators calculate the fuel efficiency equivalence of EVs. According to the industry, that change, which would significantly lower the numbers, would "devalue the fuel economy of electric vehicles by 72%."

This, in turn, could affect demand, which is already meeting challenges.

By Irina Slav for Oilprice.com

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