Automakers Challenge Biden’s New Fuel Efficiency Standards in Lawsuit Led by 26 States

A group of 26 state attorneys general, led by West Virginia and Kentucky, have filed a lawsuit challenging the Biden administration’s new fuel economy rules. They argue that the requirements are unworkable and will force automakers to produce more electric vehicles. The National Highway Traffic Safety Administration (NHTSA) recently finalized tighter vehicle fuel economy rules through 2031, which are less stringent than originally proposed. NHTSA plans to increase corporate average fuel economy (CAFE) requirements to about 50.4 miles per gallon (mpg) by 2031 from the current 39.1 mpg.

The lawsuit filed by the state attorneys general argues that the rule “exceeds the agency’s statutory authority and is arbitrary and capricious.” NHTSA had proposed increasing CAFE requirements by 2% per year for passenger cars and 4% per year for light trucks from 2027 through 2032, but the final regulation has no increase for light trucks in 2027 and 2028. This change has raised concerns among Republican state attorneys general and oil industry groups who have been challenging regulatory efforts by the Biden administration to boost vehicle efficiency, reduce greenhouse gas emissions, and increase EVs.

Last year, NHTSA estimated that its proposal to increase fuel economy standards through 2032 would cost the industry $14 billion in projected fines over a five-year period. Under the final rule, the auto industry is expected to face a total of $1.83 billion in fines from 2027 through 2031, or potentially no fines at all. President Biden’s administration has recently taken actions that have tightened vehicle regulatory proposals less than originally promised, including less strict compliance calculations for EVs and tailpipe rules that would require automakers to produce fewer EVs than initially projected.

Overall, this challenge highlights ongoing debates surrounding the role of government regulations in promoting sustainable transportation practices while balancing economic considerations for industries such as automotive manufacturing and oil production.