Car Industry

Failing to achieve annual fuel-economy targets will soon cost automakers way more

NHTSA is set to more than double the fine for not meeting CAFE targets, including certain 2015 model year vehicles.

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Nobody's happy when they discover they'll have to pay more money for the same thing. That's what manufacturers are about to experience, as the National Highway Traffic Safety Administration (NHTSA) is set to jack up the fines related to not meeting annual fuel-economy targets.

NHTSA's fines are going to more than double in August, Automotive News reports. It will also apply to 2015 vehicles for which NHTSA has yet to release compliance reports, so the ramifications could be felt very soon.

While ordinary folks might celebrate putting pressure on automakers to stop falling short of annual targets, the manufacturers themselves are likely very unhappy. The Alliance of Automobile Manufacturers told AN that the increase was "draconian," and that it will delay progress towards the all-important 2025 fleet average target of 54.5 mpg. It might seem strange that profitable companies already behind targets will have their efforts stymied by additional fines, but that's what they're saying.

Not that the fines were cheap in the first place. Previously, for every 0.1 mpg an automaker was behind the target, they'd be fined $5.50, which is then multiplied by the number of vehicles sold in a given model year. The new fine will cost $14 for every 0.1 mpg behind the target, which could add millions to fines. According to NHTSA data, Jaguar Land Rover has paid the highest fines over the 2010-2014 period, totaling some $46.2 million.

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