Trump Is Leaving Automakers One Last Gift

Illustration for article titled Trump Is Leaving Automakers One Last Gift
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President Trump’s attempted rollback of Obama-era fuel efficiency standards was basically a mess from start to finish. And now a Trump administration decision on Tuesday means that increased fines for automakers who miss those standards — whatever they are in the end — will be delayed for now.

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The fines were set to almost triple, possibly costing automakers hundreds of millions of dollars. But no longer, at least for now, according to Reuters, as the Trump administration said it would delay the higher rates taking effect. The fines, levied by the National Highway Traffic Safety Administration, have increased only once since 1975.

The decision - announced eight days before President-elect Joe Biden takes office - follows a U.S. appeals court ruling in August that overturned the Trump administration’s 2019 decision to suspend a regulation that more than doubled penalties for automakers failing to meet fuel efficiency requirements.

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The auto industry trade group that sought relief praised the NHTSA’s decision, noting vehicles that would have faced higher penalties “have already been sold or will soon be manufactured.”

Fiat Chrysler Automobiles (FCA) paid a $79 million civil penalty for failing to meet 2017 fuel economy requirements after paying $77.3 million for 2016 requirements.

In November, FCA warned it could need to set aside 500 million euros ($608 million) as a result of the appeals court decision.

Specifically, the NHTSA fines were to go up to $14 per tenth of a mile per gallon over the standard, from $5.50, an amount you then multiply by the number of vehicles in an automaker’s fleet to calculate the full penalty. Which means that if FCA thought it would have to pay penalties of $608 million this year under the higher rate, it’s still probably on the hook for tens of millions at the lower rate.

But given that automakers make billions not millions every year, it’s hard to believe the lower penalty is much incentive to comply with the fuel efficiency standards at all. Which of course is the point of them to begin with.

Anyway, you can expect more of this let’s-loot-the-place-on-our-way-out from Trump and his people in the next week, until Trump is impeached and removed or until, on January 20, Joe Biden is sworn in. Trump wouldn’t have it any other way.

News Editor at Jalopnik. 2008 Honda Fit Sport.

DISCUSSION

daveassist
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At least a large number of business heads have come to realize that, even in the short term, if you have an unstable political system, that your potential for profit really goes down.

Allowing the folks that only think in terms of smash-n-grab into power such as what we’ve seen with the Trump administration is not good for business in general.