Rather than adjust to a higher penalty rate as originally intended, the National Highway Traffic Safety Administration (NHTSA) proposed last week to maintain the existing penalty rate for manufacturers that fail to meet Corporate Average Fuel Economy (CAFE) standards.
CAFE standards result in automakers paying penalties for exceeding certain allowable fuel economy targets. While the NHTSA has originally planned to adjust that rate from $5.50 to $14 beginning with Model Year 2019 vehicles as part of inflation adjustments, the industry had projected that such an increase would result in at least $1 billion in increased costs annually.
Instead, the proposed rulemaking seeks feedback to fully assess potential impacts of maintaining the status quo. Stakeholders will be able to supply input and information regarding the agency’s decision.