National Highway Traffic Safety Administration Finalizes Next Set of Corporate Average Fuel Economy Standards

On Friday, June 7, 2024, the U.S. Department of Transportation National Highway Traffic Safety Administration (NHTSA) finalized its corporate average fuel economy (CAFE) standards for model years (MY) 2027 through 2032 passenger cars and light-duty trucks. The standards will push automakers to increase fleetwide fuel economy by approximately 2% each year, which is less aggressive than the 4% increase for light-duty trucks considered in NHTSA’s July 2023 proposed rule. Taken together, NHTSA predicts that the fleetwide average fuel economy across the industry will reach 50.4 miles per gallon by 2031, while increased upfront vehicle costs would offset lifetime fuel savings over time.

Separately, NHTSA also finalized fuel economy standards for heavy-duty trucks, vans, and vocational vehicles above 8,500 pounds. These standards will result in a 10% annual fuel economy improvement for MY 2030 through 2032 and 8% for MY 2033 through 2035. Both the light- and heavy-duty CAFE rules are aligned with, but still remain distinct from, the light- and heavy-duty tailpipe standards published by the Environmental Protection Agency in April as reported here. Also, in setting these CAFE standards, NHTSA indicated that it has not expressly mandated the adoption of light-duty electric vehicles. Instead, NHTSA expects that vehicle manufacturers will comply with California’s Advanced Clean Cars II program as a part of its baseline analysis even though the U.S. Environmental Protection Agency has not yet approved California’s associated Clean Air Act preemption waiver.

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