Congress Eliminates Corporate Average Fuel Economy (CAFE) Penalties for Passenger Cars and Light Trucks
In one of its many changes, the One Big Beautiful Bill Act, enacted on July 4, 2025, eliminated civil penalties for noncompliance with federal fuel economy standards. Specifically, Section 40006 of the Act amends the language of the Corporate Average Fuel Economy (CAFE) statute to reset the maximum civil penalty to $0.00. Although the statute and its implementing regulations otherwise remain in place, this amendment removes any civil penalties for producing passenger cars and light trucks that do not meet fuel economy requirements.
Department of Transportation Announces a Streamlined Regulatory Exemption Process for Autonomous Vehicles
On June 13, the U.S. Department of Transportation (DOT) and the National Highway Traffic Safety Administration (NHTSA) announced changes to the process for exempting autonomous vehicle companies from the Federal Motor Vehicle Safety Standards (FMVSS) under 49 C.F.R. Part 555. Part 555 offers an important route for the sale and deployment of innovative autonomous vehicles. The recent announcement evidences a desire to speed up agency decisions on Part 555 exemptions, though the application process will continue to be a substantial undertaking.
NHTSA Announces New Policies to Promote Autonomous Vehicles
On April 24, 2025, the Department of Transportation announced the new Automated Vehicle (AV) Framework from the National Highway Traffic Safety Administration (NHTSA). The announcement, which was accompanied by a video from the Secretary of Transportation, included two new policy developments. First, NHTSA released a Third Amended version of its Standing General Order on Automated Driving Systems (ADS) and Advanced Driver Assistance Systems (ADAS). Second, NHTSA announced that it would expand its exemption program for autonomous vehicles that do not fully comply with NHTSA’s Federal Motor Vehicle Safety Standards. This update discusses both developments and their broader implications.
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.
The Newest Phase of EPA’s Greenhouse Gas Emissions Standards: Phase 3
On March 29, 2024, the U.S. Environmental Protection Agency (EPA) announced its most recent national greenhouse gas (GHG) pollution standards for heavy-duty (HD) vehicles, including HD vocational vehicles and tractors. The rule establishes new CO2 emission standards for model year (MY) 2032 and later HD vehicles, with more stringent CO2 standards phasing in as early as MY 2027 for certain vehicle categories.
