Electric vehicle manufacturers are pushing against the decision to delay penalties for vehicle manufacturers failing to meet fuel efficiency standards.
A lobbying group representing legacy automakers – many of whom are now investing substantially in zero-emission vehicles – said the increase would have significant economic impact at a time when the industry is experiencing massive disruption from the Kovid epidemic . But new EV entrants say the penalty mechanism is a powerful performance incentive to reduce tailpipe emissions and encourage investment in low- or zero-emission technology.
The decision, released in January by the National Highway Traffic Safety Administration (NHTSA), postpones the increase in penalties from the beginning of model year 2019 to model year 2022. Tesla is petitioning the Second Circuit American Court of Appeals to review the ruling. That delay creates an “uneven playing field” by minimizing “ongoing, irreparable injury to the company” and non-equal results.
The Corporate Average Fuel Economy (CAFE) penalty has been increased just once – from $ 5 to $ 5.50 for $ 0.1 per gallon per mile that does not meet the standard – since its instant in 1975. Congress worked to rectify the impact of inflation on fines. It was raised to $ 14 in 2015, but the NHTSA and Courts have since ping-pong about the increase. A second Circuit ruling in August last year settled the issue in favor of imposing higher fines starting with Model 2018, but the automakers successfully petitioned last October to delay the increase.
CAFE fines can be a major boon for zero emission vehicle manufacturers who receive credits that they can then sell to other OEMs that fail to meet fuel efficiency targets. in Recent reports to regulators, Tesla said it made $ 1.58 billion from selling regulatory credits to other automakers in 2020, up from $ 594 million in 2019. Delaying growth companies making economic decisions based on the growth of credit companies, Tesla said.
EV startups Rivian and Lucid Motors told ClearTips that they oppose any delay in increasing the CAFE penalty.
“The credit market is very beneficial for the entire EV industry, so every company that wants to start manufacturing EVs, either as a startup or existing manufacturers, when they manufacture EVs it benefits them to have strong credit. Is for, ”Kevin Vincent, Associate General Counsel for Lucid Motor, told ClearTips. “A lot of current manufacturers end up selling credit on their own, so it benefits forward-thinking companies that are improving fuel economy.”
James Chen, Rivian’s VP of Public Policy and Chief Regulatory Council, said in a statement to ClearTips that any rollback of CAFE or other emission standards has only made America backward in terms of emissions reductions ([greenhouse gas] And criterion pollutants), increased fuel efficiency, decreased dependence on foreign oil, technology leadership and EV proliferation. “He said the company” strongly supports EV adoption efforts that include more stringent emission standards and higher penalties for failure to meet those standards. “
The NHTSA deferred the increase on the grounds that the penalty should not apply to models created from prior years. As manufacturers have no way to increase the level of fuel economy in these vehicles, “NHTSA said,” it would be unfair to implement adjustments for model years that may have no deterrent effect and that of the law. There may be no additional compliance.
The automakers, in a petition filed by the lobbying group Alliance in Automotive Innovation and Supplemental Comments, also cited the economic hardship caused by the COVID-19 epidemic. Mercedes-Benz told NHTSA that the epidemic caused a disruption in its supply chain, workforce and production.
“We believe that the imposition of an increased penalty rate in such a ten-year financial environment is inconsistent and inconsistent with the administration’s efforts to promote regulatory relief in light of the economic consequences of COVID-19,” the automaker said.
Tesla filed in its court that COVID “falls flat” dependent on the epidemic in the absence of specific evidence as to why it delays.
Attorney generals from 16 states, including California and New York, as well as environmental groups Sierra Club and the Natural Resources Defense Council have also objected to the delay.
The decision of NHTSA was issued in Docut no. NHTSA-2021-0001. Tesla under the second circuit, Case no. Is 21-593.