The NHTSA is Requiring Fuel Economy Improvements of 8% for 2024 and 2025 Model Year Vehicles and by 10% for 2026 Models
【Summary】Secretary of Transportation Pete Buttigieg and NHTSA Deputy Administrator Dr. Steven Cliff announced details of the new Corporate Average Fuel Economy (CAFE) standards on Friday. The updates are intended to save consumers money, address climate change, improve fuel efficiency, and reduce U.S. dependence on foreign energy sources.
Although the auto industry remains focused on building more electric vehicles, the EV adoption rate has not climbed past 5% yet, which leaves tens of millions of gas powered vehicles on the roads for the foreseeable future. But automakers selling new gas-powered vehicles will need to deliver an 8% improvement in fuel economy starting in 2024 and by 10% for 2026 model year for vehicles sold in the U.S.
Secretary of Transportation Pete Buttigieg and The National Highway Traffic Safety Administration (NHTSA) Deputy Administrator Dr. Steven Cliff announced details of the new Corporate Average Fuel Economy (CAFE) standards on Friday. The updates are intended to save consumers money, address climate change, improve fuel efficiency, and reduce U.S. dependence on foreign energy sources.
"Today's rules are going to save 234 billion gallons of fuel by 2050," said Buttigieg during a media briefing about the new rules.
Drivers across the country are feeling pain at the gas pump with the rapid rise in fuel prices that's partially blamed on the Russian invasion of Ukraine and the uncertainty around current global political climate.
In addition to saving gas, the NHTSA estimates that the updated CAFE standards will save 5.5 trillion pounds of CO2 emissions from entering the Earth's atmosphere by 2026.
The new rules are expected to reduce consumer fuel costs by $192 billion for new vehicles sold by 2030. However, the stricter fuel economy standards are also more challenging for automakers to meet and puts them in a tough position. As automakers invest billions to electrify their model lineups, they will also need to spend billions more to make their internal combustion engine vehicles more efficient.
The updated CAFE standards come after President Joe Biden signed an executive order last summer aimed at making half of all new vehicles sold in the U.S. electric by 2030. Biden's 50% EV target is backed by automakers General Motors, Ford Motor Co and Chrysler parent Stellantis.
The higher fuel economy requirements for automakers were first put in place by President Obama's administration over a decade ago, as a way to improve public health by curbing the release of greenhouse gasses, combating climate change, lessening the reliance on foreign oil, while saving drivers money at the pump.
In July 2011, former President Obama announced an agreement with thirteen automakers to increase fuel economy to 54.5 miles per gallon for cars and light-duty trucks by model year 2025. Passenger cars were required to achieve 5% annual improvements, while light trucks 3.5% annual improvements.
The agreement was supported by automakers Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo, as well as the United Auto Workers (UAW), and the State of California.
At the time, the U.S. was recovering from the recession of 2009, which included a $80.7 billion federal bailout of the U.S. auto industry.
The updated proposals last August by the Environmental Protection Agency (EPA) aimed to reduce the original fuel economy rules slightly for passenger vehicles to 52 miles per gallon with updated regulations for automakers.
To reach the new targets, the Biden administration said last summer it would reverse the Trump-era loosening of vehicle emissions rules with a new plan to boost efficiency 10% in the 2023 model year and by another near 5% in each model year from 2024 through 2026. However these were amended on Friday to 8% by 2025 and 10% by 2026 respectively.
The former Trump administration rolled back those requirements to just 1.5% improvement in fuel economy per year between model years 2021 and 2026, which would have resulted in a fuel economy improvement by automakers of just 7.5% by 2026 if they weren't amended. The former President even criticized automakers for not supporting the rollback plans.
In December, the EPA finalized its own vehicle emissions requirements that mirror the new NHTSA rules. The EPA said its rules will result in 3.1 billion tons of avoided CO2 emissions through 2050.
The EPA rules would result in a fleetwide real-world average of about 40 miles per gallon in 2026 compared with 32 mpg under the Trump rules.
The updated fuel economy standards have been a hot political topic over the past several years. The rollback of the previous rules would have allowed automakers to sell more gas-guzzling vehicles like full size pickups and SUVs, which contribute to global warming.
By 2050, the EPA said that stricter fuel economy standards would "reduce gasoline consumption by more than 290 million barrels", representing nearly 10% reduction.
As part of the new fuel economy rules, the NHTSA is reinstating increased penalties for automakers whose vehicles do not meet fuel efficiency requirements for model years 2019 and beyond. The decision was a win for electric vehicle maker Tesla, a company competing with legacy automakers in the EV space.
Although automakers are ramping up plans to build more fully electric vehicles, the EPA does not expect widespread adoption in the U.S. by 2026. The agency expects that electric vehicles and plug-in hybrids will account for just 8% of new U.S. vehicle sales by 2026. So gradual improvement in vehicle fuel economy will still have a significant impact.
Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.
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