In 2015, congress ordered federal agencies to adjust a host of civil penalties to account for inflation. The National Highway Traffic Safety Administration (NHTSA) under President Barack Obama then issued rules to raise fines from $5.50 to $14 for every 0.1 mile per gallon of fuel which new cars and trucks consume in excess of the required standards.
Unsurprisingly, automakers weren’t thrilled about this and said it could increase industry compliance costs by $1 billion annually. The Trump administration began the process of undoing the regulation shortly after being elected and first proposed the freeze in 2018.
The NHTSA believes freezing the increase penalty rate will cut the burden on industry and consumers by up to $1 billion a year.
The Alliance of Automobile Manufacturers (AAM), which represents groups such as GM, Volkswagen, Toyota, and Fiat Chrysler Automobiles, is (obviously) very pleased with the government’s decision.
“[The NHTSA’s] own model clearly shows the significant economic harm that such a dramatic and unjustified increase in penalties would have on auto manufacturers, workers, and ultimately consumers,” AAM spokeswoman Gloria Bergquist said. The group added that the Obama administration had failed to consider the economic harm which would be caused by the higher fines.
On the other hand, environmental groups aren’t at all happy and want the U.S. to retain the increase established under the previous administration, noting that fines have only increased from $5 to $5.50 since first being established more than four decades ago.