The National Highway Traffic Safety Administration (NHTSA) has recently stated that it plans to impose increased penalties for automakers that have failed to achieve fuel economy standards in recent years. A move that could cost the industry hundreds of millions of dollars or more.

In 2016, automakers had protested the increase in fine, claiming it would cost the sector at least $1 billion per year. The increase might cost Stellantis hundreds of millions of dollars while increasing the value of credits sold by Tesla.

The higher fines were supposed to start with the 2019 model year under President Barack Obama. However, after a court decision, the Trump administration agreed to delay the hike until the 2022 model year.

The NHTSA claims that it will give the public 30 days to comment on whether it should reinstate a 2016 regulation that would impose tougher fines, beginning with the 2019 model year. Still, it has not made a final decision yet.

In 2015, Congress ordered that federal agencies modify civil penalties to reflect inflation. In response, the National Highway Traffic Safety Administration enacted rules increasing fines for new vehicles and trucks that consume more than necessary 0.1 miles per gallon to $14 from $5.50.

A trade group representing international automakers and major U.S. said recently that it had urged NHTSA not to retrospectively apply higher fines to model years produced already or planned. Doing so would create no environmental or fuel economy benefit.

In August 2020, a federal appeals court invalidated the Trump administration's decision to suspend the 2016 regulation in 2019.

In March, Tesla asked a federal appeals court to impose the higher fuel economy fines, claiming that the Biden administration ignored the Trump administration’s rule on the credit-trading market.

Source Credit - https://auto.economictimes.indiatimes.com/news/policy/u-s-may-reinstate-boost-in-automaker-fines-for-not-meeting-emissions-rules/85439958