High Performance Cars and Fuel Economy Requirements: GM and Stellantis Fined Millions
If you’re in the market for a high-performance car with a big engine in the United States, be prepared to pay a few thousand dollars in gas guzzler fees. However, consumers aren’t the only ones in the new-car chain being hit with penalties because of thirsty cars. General Motors and Stellantis have both been forced to pay huge sums because they failed to meet U.S. fuel economy requirements.
GM had to pay $128.2 million for transgressions from 2016-17, while Stellantis fared even worse, receiving a $235.5 million bill to cover its failures between 2018-19. The National Highway Traffic Safety Administration (NHTSA), which oversees America’s Corporate Average Fuel Economy (CAFE) program, disclosed this information. The fines were paid between December of last year and May 2023, the NHTSA says.
Stellantis had already handed over $156.6 million to make up for failing to meet standards in 2016-17. However, in a statement to Reuters, Stellantis says all of the penalties, including the latest one, were the result of decisions made before the 2021 formation of Stellantis and didn’t reflect the group’s current direction.
GM had avoided any other levies during the 40 years CAFE has been in operation. Reuters reports that GM was planning to use credits to avoid paying fines but ended up handing over the cash instead.
Automakers will be bracing themselves for big fines when the NHTSA gets around to releasing its crunched numbers for the period from 2019 to 2021. The fines for that period jump from $5.50 to $14 for every 0.1 mpg a vehicle falls below the required standard, and that figure is then multiplied by the number of affected cars. And the potential fines only get scarier from there on. The NHTSA has toughened its fuel economy standards by 8 percent for 2024 and again for 2025, by 10 percent for 2026, and is expected to tighten the thumbscrews even further for 2027.
Why are Automakers Fined for Fuel Economy?
The Corporate Average Fuel Economy (CAFE) program was introduced in the United States in 1975 to reduce energy consumption by increasing the fuel economy of cars and light trucks. The program sets fuel economy standards for passenger cars and light trucks sold in the United States. Automakers must meet these standards or pay fines.
The CAFE program is designed to reduce dependence on foreign oil, lower greenhouse gas emissions, and save consumers money at the pump. The program has been successful in achieving these goals. However, automakers have been struggling to meet the increasingly stringent fuel economy standards set by the NHTSA.
What are Gas Guzzler Fees?
Gas guzzler fees are a tax imposed on new cars that have poor fuel economy. The tax is designed to discourage consumers from buying gas-guzzling cars and to encourage automakers to produce more fuel-efficient vehicles. The gas guzzler tax is calculated based on a car’s fuel economy and the amount of gas it consumes over a certain distance.
Gas guzzler fees are only imposed on cars that fall below a certain fuel economy threshold. The threshold is set by the NHTSA and is currently 22.5 miles per gallon (mpg) for passenger cars and 18.0 mpg for light trucks.
Gas guzzler fees can be quite substantial. For example, a car that gets less than 12.5 mpg will be subject to a tax of $4,000, while a car that gets between 12.5 and 13.5 mpg will be subject to a tax of $3,000.
How Can Automakers Improve Fuel Economy?
Automakers can improve fuel economy by using lightweight materials, improving aerodynamics, and using more efficient engines. Hybrid and electric vehicles are also becoming more popular as they offer significantly better fuel economy than traditional gasoline-powered vehicles.
Automakers are also investing heavily in research and development to improve fuel economy. For example, Ford has invested $11 billion in electric vehicles and plans to have 40 electric and hybrid models in its lineup by 2022. General Motors plans to introduce 20 new electric vehicles by 2023.
Conclusion
Automakers are facing increasing pressure to improve fuel economy and reduce greenhouse gas emissions. The NHTSA has toughened its fuel economy standards, and automakers that fail to meet these standards face substantial fines. However, automakers are investing heavily in research and development to improve fuel economy and reduce emissions. As technology continues to advance, we can expect to see more fuel-efficient cars on the road in the coming years.