Tesla pushes US to increase fuel economy penalties

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WASHINGTON, Sept. 22 (Reuters) – Tesla Inc (TSLA.O) urges President Joe Biden’s administration and a U.S. appeals court to act quickly to increase civil penalties for automakers who fail to meet the requirements of fuel economy.

Electric vehicle maker Tesla sells credits to other automakers to help them meet government vehicle emissions requirements, and says those credits are worth less because of rule changes by the administration of former President Donald Trump. Tesla had a virtual meeting on August 30 with officials from the National Highway Traffic Safety Administration (NHTSA), according to a document filed by the agency last week.

On August 18, the NHTSA issued a notice saying it may impose higher penalties for previous model years on automakers failing to meet fuel mileage requirements, but will consider the comments first. public.

Automakers have warned that increasing penalties could cost them at least $ 1 billion a year, both for breaking the rules and for higher prices for credits used to comply with the rules.

The Trump administration in its final days in January delayed a 2016 regulation that more than doubled penalties for automakers failing to meet Corporate Average Fuel Economy (CAFE) requirements.

The government memo says Tesla suggested that NHTSA immediately withdraw Trump’s action, saying it “produces continued uncertainty in investments and transactions across the industry, and any delay will continue to have an effect. deleterious in the credit market until the problem is resolved “. He added that Tesla believes that “any delay will continue to have deleterious effects on the credit market.”

On August 27, Tesla again separately asked the United States Second Circuit Court of Appeals to quickly reinstate higher penalties. The court dismissed Tesla’s request in April for immediate action pending NHTSA review.

“The uncertainty perpetuated by the slow pace of NHTSA rule-making is thus compounded by the likelihood of a new round of litigation,” Tesla wrote, warning that the uncertainty “could persist for several years.”

A group representing major automakers, including General Motors (GM.N), Toyota Motor (7203.T), Ford Motor (FN) and Volkswagen (VOWG_p.DE), asked the court to dismiss Tesla’s claim. “That Tesla can enjoy greater certainty about the value of the CAFE credits it has accumulated is no reason to halt an ongoing administrative process,” the group wrote in a court filing.

Under former President Barack Obama, higher sanctions were to start from model year 2019, but Trump has set the effective date for model year 2022. NHTSA is considering reinstating Obama’s rule.

Those CAFE penalties from the previous year, which still have not been assessed, could cost Chrysler’s parent, Stellantis (STLA.MI) hundreds of millions of dollars, while also increasing the value of credits Tesla sells.

Stellantis said in August that the costs related to the potentially higher CAFE penalties could amount to around 521 million euros ($ 609 million). Fiat Chrysler paid almost $ 150 million for failing to meet the 2016 and 2017 requirements.

Reporting by David Shepardson; Editing by David Gregorio

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