Republican State Attorneys General Challenge New US Fuel Economy Rules

By David Shepardson

WASHINGTON – A coalition of 26 state attorneys general, spearheaded by West Virginia and Kentucky, has filed a challenge against the Biden administration’s newly implemented fuel economy standards. They argue that the regulations are impractical and would compel automakers to significantly increase their production of electric vehicles.

Recently, the National Highway Traffic Safety Administration (NHTSA) finalized stricter vehicle fuel economy standards set to last through 2031, although these rules are less rigorous than what was initially proposed. NHTSA indicated that it plans to raise corporate average fuel economy (CAFE) requirements to approximately 50.4 miles per gallon (mpg) by 2031, up from the current standard of 39.1 mpg. This new target is marginally higher than the previous requirement of 49 mpg for the year 2026.

Republican state attorneys general and representatives from the oil industry have contested various regulatory initiatives from the Biden administration aimed at enhancing vehicle efficiency, curbing greenhouse gas emissions, and increasing electric vehicle adoption. Moreover, Republican presidential candidate Donald Trump has pledged to roll back the administration’s EV regulations.

The lawsuit, submitted to the 6th Circuit U.S. Court of Appeals, claims that the new rule “exceeds the agency’s statutory authority and is arbitrary, capricious, an abuse of discretion, and not in accordance with law.” NHTSA has yet to respond to this development.

In July 2023, NHTSA proposed an annual increase of 2% in CAFE standards for passenger cars and 4% for light trucks from 2027 to 2032. However, the final regulation does not mandate any increase for light trucks for the years 2027 and 2028 and only requires a 2% increase from 2029 to 2031.

Last year, NHTSA projected that raising fuel economy standards through 2032 could incur costs of up to $14 billion in anticipated fines for the automotive industry over a five-year period. Under the finalized rule, the industry is expected to collectively face approximately $1.83 billion in fines from 2027 to 2031, with the possibility of some manufacturers facing no fines at all.

This marks the third instance in which the Biden administration has adjusted vehicle regulations, yielding looser standards than initially promised. Recent compliance calculations for electric vehicles have also proven less stringent than anticipated, and new tailpipe regulations are expected to reduce the number of EVs automakers had initially planned to produce.