New fuel economy standards announced in the USA

The US Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) announced new fuel economy standards which follow President Biden’s executive order to drive American leadership forward on clean cars.

It had previously been announced that the US is returning to stricter fuel efficiency standards, however, this gives the measures some teeth. The new Corporate Average Fuel Economy (CAFE) standards will require an industry-wide fleet average of approximately 49 mpg for passenger cars and light trucks starting from the model year 2026. In addition, the new standards are to increase fuel efficiency by 8% annually for model years 2024-2025, and up to 10% annually for the model year 2026. Further, they will also increase the estimated fleetwide average by nearly 10 miles per gallon for the model year 2026, relative to the model year 2021.

In terms of fuel savings, the new CAFE standards for the model year 2024-26 will reduce fuel use by more than 200 billion gallons through 2050, compared to the current standards.

“Today’s rule means that American families will be able to drive further before they have to fill up, saving hundreds of dollars per year,” said US Transportation Secretary Pete Buttigieg. “These improvements will also make our country less vulnerable to global shifts in the price of
oil, and protect communities by reducing carbon emissions by 2.5 billion metric tons.”

The measure is not unexpected, as US President Biden’s agenda is heavily focusing on new energy and energy independence, for which Biden even dusted off an old 1950’s war regulation to require industries to produce battery materials. The executive order given in the early days of the presidency laid out a basic plan for what was to come – from strengthening the battery and automobile industries to supporting unions, which led to a bit of fallout with Tesla CEO Elon Musk.

Initially, Biden promised a 2 trillion dollar infrastructure packet, which was watered down by half by going through congress, coupled with almost $3 billion in funding for the US battery supply chain.


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