Ford Motor Co has voiced concerns about the Biden administration’s proposal to raise vehicle fuel economy standards through 2032, warning that it could lead to “significant economic hardship” for the automaker. This objection from Ford is part of the ongoing resistance from the auto industry against the National Highway Traffic Safety Administration’s (NHTSA) plan, which was introduced in July, to incrementally enhance fuel efficiency requirements. The proposal aims to increase fuel efficiency by 2% per year for passenger cars and 4% per year for pickup trucks and SUVs from 2027 to 2032, with the ultimate goal of achieving a fleet-wide average fuel efficiency of 58 miles per gallon. NHTSA is expected to make a final decision on this plan early next year.
In response to the proposal, Ford submitted comments during the public comment period, citing NHTSA’s estimates that the company could potentially face $1 billion in civil penalties under the changes proposed for the Corporate Average Fuel Economy (CAFE) program through 2032. Ford considers this projection alarming and argues that it poses a significant economic burden. The company also expressed doubts about the feasibility of NHTSA’s plan and contended that it does not create a level playing field for all automakers, raising concerns about potential unprecedented civil penalties in the CAFE program.
Ford has called for a reduction in NHTSA’s proposed fuel efficiency increases for SUVs and trucks by 50%. This stance aligns with the position of the American Automotive Policy Council, a group representing the Detroit Three automakers (Ford, General Motors, and Stellantis’ Chrysler unit), which advocated for the same on Monday.
In contrast, electric car manufacturer Tesla has urged NHTSA to adopt much more stringent fuel economy standards, pushing for a 6% annual increase for cars and an 8% increase for trucks and SUVs. Tesla, which sells credits to other automakers to help them meet government vehicle emissions requirements, stands to benefit from higher Corporate Average Fuel Economy (CAFE) credits.
Previously, U.S. automakers estimated that the fines associated with NHTSA’s proposal would cost General Motors $6.5 billion, Stellantis $3 billion, and Ford $1 billion. These estimates are based on NHTSA’s projections and its $13.7 billion estimation for the industry as a whole. It’s worth noting that in June, Stellantis and General Motors collectively paid $363 million in CAFE fines. Ford emphasized that it has never had to pay such fines.
NHTSA had previously reintroduced substantial increases in penalties and, while doing so, stated that it was restricted from considering factors such as electric vehicles and credit trading when making penalty projections. The agency maintains that its proposal primarily aims to save consumers money at the gas pump and enhance American energy independence.
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