Feds to Double Fines for Missing MPG Targets

The National Highway Traffic Safety Administration (NHTSA) is about to jack up fines for automakers that aren’t meeting fuel economy requirements.

The fines imposed on automakers for not meeting the corporate average fuel economy standards (CAFE) will more than double next month. NHTSA also told Automotive News that these larger fines will apply to 2015 model year vehicles, which haven’t had compliance reports issued yet.

NHTSA has already collected an average of $20 million a year since 2010 in fuel economy fines, with Jaguar Land Rover paying $46.2 million alone in the period from 2010 to 2014, more than any other automaker. In the same time period, Daimler has paid $28.2 million while Volvo has paid $17.4 million.

SEE ALSO: Changes to Fuel Economy Tests Cause MPG Drop in Many Vehicles

Automakers are not happy about the changes, with the Alliance of Automobile Manufacturers calling it a “draconian” increase as it impedes progress toward the eventual goal of having a fleetwide 54.5 mpg average. “The most disturbing thing about it is that essentially no notice was given,” an unnamed auto executive told Automotive News. “You make your regulatory plans based on a certain set of assumptions. To have it change suddenly without notice and without the ability to respond is really troubling.”

A law, passed last year, sparked the increase as it directed all federal agencies to revise penalties in order to maintain inflation and their effectiveness as an inhibitor.

Offset credits are issued to automakers for building zero-emissions vehicles (ZEVs) and other green vehicles. These can be used to offset vehicles that don’t meet CAFE standards, or the credits can be sold to other automakers that need them. With this new development, the credits could also become more expensive thanks to increased demand.

[Source: Automotive News]