WASHINGTON, June 5 (Reuters) – U.S. Senate Republicans have proposed eliminating fines for automakers who fail to meet Corporate Average Fuel Economy (CAFE) standards as part of a broader tax bill. This move is aimed at easing regulations for gas-powered vehicles. The proposal comes amid ongoing legislative efforts to reshape the automotive industry’s regulatory landscape.
In a related effort, U.S. House Republicans have introduced their own measures, including repealing planned increases in fuel economy requirements and vehicle emissions rules established under the Biden administration. Their bill also seeks to eliminate a $7,500 tax credit for new electric vehicles (EVs), introduce a $250 annual fee on EVs for road repairs, and phase out EV battery production tax credits by 2028.
Both chambers have passed legislation to block California’s plan to ban the sale of gasoline-only vehicles by 2035, a policy adopted by 11 other states that account for a third of the U.S. auto market. This bill is currently awaiting President Donald Trump’s approval.
The Transportation Department is expected to rule that the fuel economy standards set under Biden exceeded legal authority by including EVs. Last year, the National Highway Traffic Safety Administration announced plans to raise fuel economy standards to an average of 50.4 miles per gallon by 2031, up from 39.1 mpg for light-duty vehicles. The agency warned that the auto industry could face $1.83 billion in fines through 2031 if these rules remain in place.
— new from Reuters