The Feds Just Let Carmakers Off The Hook For Years Of Fuel Economy Fines

With past fines forgiven and the penalty for future infractions set at $0, the CAFE standards are effectively dead.

Tailpipe pollution

Tim Levin

By: Tim Levin

Jul 17, 2025 at 3:54pm ET

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The Trump administration told car companies they won't have to pay fines for missing fuel economy targets going back to 2022, The Detroit News reported on Wednesday.
The Republicans' One Big Beautiful Bill Act, passed this month, eliminated penalties under Corporate Average Fuel Economy regulations.
It's another way the federal government is pulling back support for cleaner cars.

The Trump administration just told automakers not to worry about paying those pesky fines they've racked up for making cars that pollute excessively.

According to a letter to car manufacturers from the National Highway Traffic Safety Administration that was seen by The Detroit News, the government is wiping away penalties under the Corporate Average Fuel Economy (CAFE) program dating back to the 2022 model year.

The Republicans' One Big Beautiful Bill Act, passed early this month, reduced fines under CAFE regulations to zero, effectively neutering the longstanding rules that push automakers to sell increasingly fuel efficient cars over time. Now it's clear that the federal government is reaching back in time as well, nullifying any infractions that automakers may have committed in years for which the fines haven't been tallied up yet.

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It's just one move of many from the Trump administration and Congress aimed at eliminating support for electric vehicles and making it easier for car companies to continue selling gas-guzzling vehicles.

In February, the Department of Transportation suddenly cut off billions of dollars earmarked for building out EV charging infrastructure. This month, Congress voted to axe EV tax credits after September 30—eight years early. The Environmental Protection Agency is working to relax the previous administration's rules that restrict harmful tailpipe emissions.

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Gutting CAFE regulations will likely make cars more expensive to operate, experts say, since Americans will have to buy more gas over time. Climate and clean-car advocates have railed against the move too.

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Another consequence: The market for carbon credits that automakers can buy to avoid paying fines has evaporated. That'll hit a significant source of revenue for Tesla, America's leading EV maker.

Contact the author: Tim.Levin@InsideEVs.com

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