U.S. Transportation Department Expected to Declare Fuel Economy Rules

The U.S. Transportation Department is expected to announce that fuel economy regulations issued under former President Joe Biden exceeded the government's legal authority, particularly in their inclusion of electric vehicles in setting fuel efficiency standards.

Transportation Secretary Sean Duffy said that the prior administration had "illegally used CAFE standards as a backdoor electric vehicle mandate – driving the price of cars up". The department's National Highway Traffic Safety Administration (NHTSA) recently submitted an interpretive rule titled Resetting the Corporate Average Fuel Economy Program to the White House for review.

The Biden administration had previously set ambitious fuel economy targets, aiming to increase corporate fuel economy requirements to nearly 50.4 miles per gallon by 2031, up from the current 39.1 mpg for light-duty vehicles. However, critics claim that factoring electric vehicles into these calculations successfully mandated their adoption, pushing traditional internal combustion engine vehicles out of the market.

Republican legislators have voiced concerns over the policy, with 120 members of Congress arguing that the NHTSA surpassed its authority by incorporating electric vehicles into its regulatory baseline. In response, House Republicans have proposed cancelling the electric vehicle tax credit and rolling back fuel efficiency rules aimed to encourage automakers to produce more zero-emission vehicles.

The Environmental Protection Agency (EPA) is also projected to reconsider parallel vehicle emissions regulations and may withdraw California’s authority to ban the sale of gas-only vehicles by 2035. The Senate is set to debate legislature that could overturn California’s emissions rules, a move that has drawn strong responses from automakers and environmental advocates alike.

As the White House examines the Transportation Department's explanation of the rule, the decision could have significant consequences for the future of fuel economy standards and the wider transition to electric vehicles in the United States. Courtesy Reuters