Latest news with #CorporateAverageFuelEconomy
Time of India
3 hours ago
- Automotive
- Time of India
Senate Republicans seek to end EV tax credit by September 30
US Senate Republicans late Friday released a revised tax and budget bill that would end the $7,500 tax credit on new electric vehicle sales and leases on September 30 as well as the $4,000 tax credit for used EVs. The prior version would have ended the credit for new sales 180 days after the bill was signed into law, 90 days for used vehicles and immediately ended the credit for leased vehicles not assembled in North America and meeting other requirements. Republicans have taken aim at EVs on a number of fronts, a reversal from former President Joe Biden's policy that encouraged electric vehicles and renewable energy to fight climate change and reduce emissions. The House of Representatives version would allow the $7,500 new-EV tax credit to continue through the end of 2025, and through the end of 2026 for automakers that have not yet sold 200,000 EVs before killing it. The Senate bill also includes a provision to eliminate fines for failing to meet Corporate Average Fuel Economy rules in a move aimed at making it easier for automakers to build gas-powered vehicles. The Republican bill exempts interest paid on auto loans from taxes for new cars made in the US through 2028, but phases it out for individual taxpayers making more than $100,000 annually. Senate Republicans dropped a bid to force the US Postal Service to scrap thousands of electric vehicles and charging equipment in the bill following a ruling from the Senate parliamentarian. The US Postal Service has 7,200 electric vehicles, made up of Ford e-Transit and specially built Next Generation Delivery Vehicles built by Oshkosh Defense and warned scrapping its EVs would cost it $1.5 billion. President Donald Trump this month signed a resolution approved by Congress to bar California's landmark plan to end the sale of gasoline-only vehicles by 2035, which has been adopted by 11 other states representing a third of the US auto market.
Time of India
8 hours ago
- Automotive
- Time of India
US Senate Republicans seek to end EV tax credit by September 30
U.S. Senate Republicans late Friday released a revised tax and budget bill that would end the $7,500 tax credit on new electric vehicle sales and leases on September 30 as well as the $4,000 tax credit for used EVs. The prior version would have ended the credit for new sales 180 days after the bill was signed into law, 90 days for used vehicles and immediately ended the credit for leased vehicles not assembled in North America and meeting other requirements. Republicans have taken aim at EVs on a number of fronts, a reversal from former President Joe Biden's policy that encouraged electric vehicles and renewable energy to fight climate change and reduce emissions. The House of Representatives version would allow the $7,500 new-EV tax credit to continue through the end of 2025, and through the end of 2026 for automakers that have not yet sold 200,000 EVs before killing it. The Senate bill also includes a provision to eliminate fines for failing to meet Corporate Average Fuel Economy rules in a move aimed at making it easier for automakers to build gas-powered vehicles. Live Events The Republican bill exempts interest paid on auto loans from taxes for new cars made in the U.S. through 2028, but phases it out for individual taxpayers making more than $100,000 annually. Senate Republicans dropped a bid to force the U.S. Postal Service to scrap thousands of electric vehicles and charging equipment in the bill following a ruling from the Senate parliamentarian. The U.S. Postal Service has 7,200 electric vehicles, made up of Ford e-Transit and specially built Next Generation Delivery Vehicles built by Oshkosh Defense and warned scrapping its EVs would cost it $1.5 billion. President Donald Trump this month signed a resolution approved by Congress to bar California's landmark plan to end the sale of gasoline-only vehicles by 2035, which has been adopted by 11 other states representing a third of the U.S. auto market.
Miami Herald
5 days ago
- Automotive
- Miami Herald
U.S. Senate Might Kill Automotive Fuel Economy Rules
In the 1970s, the United States faced a consequential energy crisis that exposed the auto industry's pitfalls in making fuel-efficient cars. At the time, most cars sold in the United States were anything but fuel sippers, and in some parts of the country, fuel dried up so fast that some states and municipalities had to start rationing fuel. For instance, New Jersey imposed mandatory odd-even rationing based on calendar dates and license plate numbers, prohibited sales when the car's tank was at least half full, and required a system of flags at gasoline stations to alert motorists about supplies. Seeing that drivers around the country were struggling to get around, Congress drew up the Corporate Average Fuel Economy (CAFE) rules, which aimed to improve the average fuel efficiency of new vehicles sold by automakers in the United States. Despite Detroit automakers objecting to the rules and advocating for consumer choice, President Gerald Ford signed legislation creating CAFE standards in 1975. A recent report from The Wall Street Journal says that the U.S. Senate is considering a change that would make federal fuel-economy rules just friendly suggestions for carmakers. This move is part of a larger tax and spending bill linked to the Trump administration, which has been referred to by both President Trump and the media as the "big, beautiful bill." If it gets the green light, it would eliminate fines for car manufacturers who don't meet the Corporate Average Fuel Economy (CAFE) standards; a move that would seriously weaken rules that previously pushed and incentivized automakers to make cleaner-burning and more fuel-efficient cars for the market. The idea to drop CAFE fines was included in the budget plan released earlier this month by the Senate Commerce Committee, which is led by Senator Ted Cruz (R-TX). The committee claims that if enacted, this proposal could lead to modest savings for car buyers. Under the existing rules, automakers risk fines when the average fuel economy for their entire U.S. lineup falls short of the CAFE standard of 49 miles per gallon for the 2026 model year. Industry advocates and automakers argue that the rules, which increased under the Biden administration to 50.4 mpg by the 2031 model year, have become too strict and are accompanied by more punishing fines if they don't comply. "The combination of high penalties with the nearly impossible CAFE standards finalized during the previous administration is a major problem," said Alliance for Automotive Innovation president and CEO John Bozzella. The proposed changes are splitting the auto industry. According to the Journal, General Motors and Stellantis support eliminating the fines altogether. Meanwhile, several major automakers, including Toyota and Hyundai, told the Journal that they support revisiting the standards but oppose the wholesale elimination of CAFE penalties. In recent years, Detroit-based automakers like GM and Stellantis have faced the heftiest CAFE-related fines. Since 2022, GM has paid $128 million for being CAFE non-compliant, while Stellantis has paid more than $425 million for the same reasons. Automakers can buy regulatory credits from competitors to offset fines, a significant revenue driver for electric car manufacturers like Rivian and Tesla. According to Rivian's Q1 2025 shareholder letter, the makers of the outdoor-aesthetic R1T electric pickup truck and R1S electric SUV earned $157 million from selling regulatory credits to other automakers. During the same quarter, Tesla earned $447 million from the same revenue stream. Industry advocates argue that the strict Federal regulations have created sparks of innovation in automakers and the vehicles they sell in the U.S. Over the past decades, automakers have spearheaded the development of gas-saving tech like turbocharged engines that provide greater power than the higher displacement engines they replace, automatic gearboxes with seven, eight, nine, 10 or more gears, as well as start-stop engine technology that automatically shuts off at stoplights to conserve gasoline. "Automakers have proven time and time again that without strong and enforceable fuel-economy standards, many of them will leave proven, popular, and cost-effective technologies like hybrids sitting and gathering dust on the shelf," Consumer Reports policy analyst Chris Harto told the Journal. I do agree with the idea that strict regulations breed innovation. Although some technologies like continuously variable transmissions and start-stop engine technology can be annoying, on the other hand, you get some cool stuff like Honda's VTEC and BMW's tunable, turbocharged engines in its current M3 and M4. However, like any new measure introduced, it needs to clear the Senate parliamentarian's review to qualify for budget reconciliation, which allows Senate Republicans to pass budget bills with a simple majority instead of the usual 60 votes. It also has to be mainly about financial matters and must be approved by the House. We'll have to wait and see. Copyright 2025 The Arena Group, Inc. All Rights Reserved.
Yahoo
10-06-2025
- Automotive
- Yahoo
Tesla could lose billions in revenue as Trump administration weighs eliminating a key regulatory credit loophole
Senate Republicans are proposing the elimination of penalties for not abiding by certain fuel efficiency standards. These penalties would render regulatory credits, an incentive for auto companies to abide by the standards, essentially useless. Tesla relies on these credits for a chunk of its revenue, racking up $2.67 billion from them in 2024. As Tesla stock sputters following CEO Elon Musk's feud with President Donald Trump, the EV maker is facing yet another threat from the administration. Republicans are doubling down on efforts to weaken carbon emission standards for the auto industry, which have provided opportunities for companies producing eco-friendly vehicles, such as Tesla, to receive and sell regulatory credits for profit. The Senate Committee on Commerce, Science, and Transportation proposed last week eliminating penalties for companies not meeting certain economy fuel standards set to mitigate carbon emissions. The proposal is included in the committee's portion of Trump's sweeping budget bill. After Corporate Average Fuel Economy (CAFE) standards were introduced in 1975 as a means of setting standards for fuel efficiency, a credits program emerged following lobbying efforts from auto companies looking to be paid to produce lower emission vehicles. Auto companies that produce a certain amount of energy-efficient cars are given a number of credits, depending on how eco-friendly their manufactured vehicles are. Companies are required to have a certain number of credits annually. While Tesla is able to easily attain these credits as a producer of cars that don't run on gas, other manufacturers, like Ford and Stellantis, are not. Therefore, they buy credits from Tesla, who can sell those credits for practically 100% profit. The Senate committee's proposal would eliminate certain CAFE penalties, rendering the need to have credits useless, Chris Harto, senior policy analyst at Consumer Reports, told Fortune in an email. 'It also would essentially turn the CAFE standards into nothing more than a reporting requirement with no consequences for automakers who fail to improve the efficiency of the vehicles they sell,' he said. The committee argued the provision would 'modestly' bring down the cost of cars by eliminating CAFE penalties. These CAFE credits have been a boon for Tesla, which has been battered by CEO Musk's controversial involvement in—and departure from—the Trump administration. The EV-maker made $2.76 billion from regulatory credits in fiscal 2024 and $595 million in the first quarter of 2025, according to earnings reports. Tesla reported $420 million in net income the same quarter, meaning without the regulatory credit, the company would not have been profitable. 'A key element of Tesla's profitability has been its ability to generate credits because it makes zero emissions, and sell those credits to more polluting car companies like GM and Ford and Stellantis—primarily gas-guzzlers that don't really want to make clean cars,' Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity, told Fortune. 'By taking away these credits, they're taking away a key element of Tesla's profitability,' he added. Tesla did not respond to Fortune's request for comment. The Senate committee's proposal is one of several efforts by the Trump administration to cut auto sustainability standards. Last month the Senate passed legislation blocking a California effort to ban gas-powered vehicles and mandate sales of only zero-emission cars and light trucks by 2035. The bill, should it be signed by the president, would take a $2 billion bite out of Tesla's revenue, according to JPMorgan analysts. Also in Trump's massive budget bill is the elimination at the end of this year of tax credits up to $7,500 for buyers of certain Tesla and other EV models, which would cost $1.2 billion of Tesla's full-year profit, the analysts calculated. Tesla's credit headaches extend across the Atlantic Ocean. Regulatory credits are common in Europe and Asia, and the European Union, for example, gives credits to European automakers who sell a certain number of zero-emission cars. But as Tesla sales crater overseas—including falling by 49% in April—the EV maker may not be able to reach the number of sales necessary to gain credits. As of April, Tesla—grouped with Ford and Stellantis in a manufacturing pool to achieve the EU's emission standards—are still short of the target, according to a report from the International Council on Clean Transportation. Poor sales could jeopardize Tesla's ability to rack up credits. 'If things go bad for Tesla and they don't sell enough cars this year, they might not have enough credits for what they promised Stellantis and the others,' ICCT managing director Peter Mock told Politico in March. 'Tesla is under pressure.' This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
09-06-2025
- Automotive
- Miami Herald
Senate Moves to End Fuel Economy Fines That Hit Automakers Hardest
Senate Republicans have proposed ending fines for automakers not meeting Corporate Average Fuel Economy (CAFE) rules as part of President Trump's "Big Beautiful Bill." CAFE fuel economy standards have been active since 1975, with the initial penalty at a $5 fine per 0.1 mpg below the standard, multiplied by the number of vehicles sold in the US market. In 1997, this fine increased to $5.50, and today, the penalty is $14 per 0.1 mpg below the standard, with some automakers significantly more affected than others. Stellantis has paid the highest amount of recent fines, including $156.6 million for the 2016 and 2017 model years, a record $235.5 million for the 2018 to 2019 period, and $190.7 million for the 2019 and 2020 periods. General Motors (GM) paid $128.2 million in penalties for 2016 and 2017. In 2001, BMW paid a $27 million CAFE fine. If Congress doesn't change CAFE rules, GM, Ford, and Stellantis are projected to pay over $10 billion in penalties from 2027 to 2032 under stricter regulations set by the Biden administration, according to Transport Topics. Senate Republicans also proposed lowering emissions requirements, ending the $7,500 electric vehicle (EV) tax credit, imposing a $250 annual EV registration fee, and phasing out EV battery production tax credits in 2028. Tesla earned almost $2.8 billion last year by selling regulatory credits to other automakers, helping competitors meet government-established car emissions rules, many of which are in California. Competitors who don't manufacture enough zero-emission vehicles face steep fines if they don't purchase regulatory credits from Tesla. If rolled back, new emissions requirements would save automakers $200 million, Reuters reports. The Transportation Department also declared that former President Biden's administration exceeded its authority by assuming a high EV adoption rate in calculating fuel economy rates, increasing the likelihood of looser CAFE standards. Under President Biden, 2027 to 2031 model-year passenger cars faced a 2% annual fuel economy increase requirement, with trucks subject to a 4% increase. However, new final rules would keep the 2027 to 2031 passenger car fuel economy at 2% while lowering the annual increase for trucks from 4% to 2% for 2029 to 2031 models. However, separate legislation may eliminate CAFE fines altogether. Automakers could still face tailpipe emissions rules established by the Environmental Protection Agency (EPA), even if Congress eliminates CAFE fines. While Congress can overturn EPA rules, its most recent CAFE proposal doesn't impact EPA penalties. As of 2025, automakers are subject to EPA penalties up to $45,268 per non-compliant vehicle or engine, $4,527 per tampering event or sale of defeat device, and $45,268 per day for reporting and record-keeping violations. If passed, Congress's proposal could significantly shape the U.S. EV adoption rate in favor of lowering immediate costs for legacy automakers. "We are making vehicles more affordable and easier to manufacture in the United States. The previous administration illegally used CAFE standards as an electric vehicle mandate, raising new car prices and reducing safety. Resetting CAFE standards as Congress intended will lower vehicle costs and ensure the American people can purchase the cars they want," said current Department of Transportation Secretary Sean Duffy regarding Congress's proposal to end CAFE fines. Copyright 2025 The Arena Group, Inc. All Rights Reserved.
