National Highway Traffic Safety Administration Finalizes Model Year 2024-26 Vehicle Fuel Economy Standards

On Friday, April 1, the National Highway Traffic Safety Administration (NHTSA) announced its final fuel economy standards for model year 2024-26 vehicles. The final rule increases vehicle efficiency requirements, as represented through vehicle-footprint-based targets, 8% annually for model years 2024 and 2025 and 10% for 2026, which the agency concludes represents the maximum feasible level manufactures can achieve for these model years. NHTSA predicts that the new standards will yield an industrywide average fuel economy of approximately 49 miles per gallon for model year 2026 passenger cars and light trucks, which represents an increase of 10 miles per gallon over model year 2021.

As required by President Joe Biden’s January 20, 2021, Executive Order 13990, NHTSA’s final rule amends the model year 2021-26 standards set forth by the prior administration in its 2020 Safer Affordable Fuel Efficient Vehicle (SAFE) Rule. NHTSA considers that the new standards are appropriate, in part, because 1) the standards recognize that shortly after the agency finalized the SAFE rule, five major automakers voluntarily agreed to meet heighted fuel economy requirements through an agreement with California, and 2) the standards are consistent with the Environmental Protection Agency’s recently adopted carbon dioxide standards such that manufacturers can meet both standards with the same vehicle fleet. The final rule is awaiting publication in the Federal Register and will take effect 60 days from publication.

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