General Motors warned the Biden administration that their plan to change vehicle emission rules would cost the automotive industry billions of dollars in penalties by 2031.
General Motors executive David Strickland met with the White House Office of Management and Budget on July 17 about the administration’s proposal for vehicle fuel economy.
According to an estimate from GM following the meeting, the auto industry could face $100 billion to $300 billion in total penalties, or $1,300 to $4,300 per vehicle from 2027 to 2031.
This range is depending on the Energy Department proposal to revise the petroleum-equivalent fuel economy rating for electric vehicles.
The National Highway Traffic Safety Administration, which oversees Corporate Average Fuel Economy regulations, said late on Thursday GM’s “estimate is pure speculation and inaccurate.”
The agency will release its proposal to hike CAFE requirements for 2027 and beyond on Friday, sources familiar with the agency’s plans said, after the White House signed off on Tuesday.
An official from the Biden administration said there are two scenarios, one being where the auto industry faces $3 billion in fuel penalties in 2032, and the other where they do not.
Another official said that NHTSA’s preference for the CAFE proposal is estimated to save more than $50 billion on fuel over a vehicle’s lifetime.
The same proposal will reduce oil usage by more than 88 billion gallons through 2050. The benefits would cost more than $18 billion to implement.
Chrysler parent Stellantis and GM paid a total of $363 million in civil penalties for failing to meet CAFE requirements for prior model years, Reuters reported in June. The record-setting penalties include $235.5 million for Stellantis for the 2018 and 2019 model years and $128.2 million for GM covering 2016 and 2017.
Automakers pay penalties if internal combustion-powered vehicles they sell do not meet CAFE standards or buy credits from other automakers to meet requirements. They can also sell electric vehicles to help offset vehicles that do not meet requirements.