NHTSA looking to reconsider fuel economy standards while ‘shedding’ employees
The National Highway Traffic Safety Administration (NHTSA) is reconsidering its new Corporate Average Fuel Economy (CAFE) standards, according to Reuters.
NHTSA made the statement in a letter, which Reuters reports it viewed. As a result, automakers won’t face fines for failures to meet fuel efficiency rules that apply to model year 2022 and newer vehicles, the article states.
“The decision is one of a number made by Washington to make it easier for automakers to build gasoline-powered vehicles and to make electric vehicle sales more costly,” Reuters wrote.
A law signed by President Donald Trump earlier this month specifies that vehicle fines would be eliminated for any year not finalized by NHTSA.
On July 11, Alliance for Automotive Innovation President and CEO John Bozzella wrote a letter to Congress thanking legislators for their work on legislation that “incorporates several meaningful provisions that will strengthen the global competitiveness of the U.S. auto sector.”
Specific to CAFE standards, he wrote, “Given current market conditions, the existing standards were challenging for many auto manufacturers to achieve. For industry to remain competitive, a durable, long-term solution, including a single national standard that provides clarity and
consistency across administrations.”
U.S. Department of Transportation (USDOT) Secretary Sean Duffy’s first act after he was sworn in on Jan. 28 was signing a memorandum that the administration says would lower the price of American car ownership and eliminate former President Joe Biden’s electric vehicle mandate.
The memo directed the offices of the General Counsel and Undersecretary for Policy and NHTSA to immediately initiate a rulemaking to rescind or replace all existing CAFE standards.
Last July, 26 state attorneys general sued NHTSA, challenging the Biden Administration’s EV and manufacturing mandates. The AGs stated in their petition to the court of appeals that the mandates exceed NHTSA’s statutory authority and are “arbitrary, capricious, an abuse of discretion, and not in accordance with law.”
In 2024, Stellantis paid $190.7 million in civil penalties for failing to meet U.S. fuel economy requirements for 2019 and 2020, following the payment of nearly $400 million in penalties for 2016 through 2019, the Reuters article states. GM previously paid $128.2 million in penalties for 2016 and 2017.
Reuters also reports that NHTSA is “shedding” more than 25% of its employees under financial incentive programs offered by the Trump administration, according to data provided to Congress.
As of May 31, NHTSA had 772 employees. It will shrink to 555 under the program, according to the Reuters article.
The Federal Highway Administration and Federal Transit Administration are also losing more than 25% of their staff.
Overall, the U.S. Department of Transportation (USDOT) will lose over 4,100 employees, down from nearly 57,000.
“Consumer advocacy groups on Thursday urged lawmakers to drop proposed cuts to NHTSA’s budget, including cutting its operations and research account by over $10 million, saying it would harm ‘the agency’s ability to conduct rulemaking, enforcement actions, and research and analysis,'” Reuters wrote.
Transportation Secretary Sean Duffy reportedly told reporters on Thursday he was uncertain if the department would conduct layoffs.
“If we have bloat in certain areas, we’ll reduce force,” Duffy said.
Reuters reports he added that the department would rehire some areas if necessary, and no safety-critical employees were cut.
“We feel good where we’re at right now, but we’ll continue to assess where we’re at with our staffing needs,” he said, according to the article.
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