Tesla Calls for Tougher US Fuel Economy Rules Opposed by Rivals

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(Bloomberg) — Tesla Inc. is calling for President Joe Biden’s administration to sharply increase fuel economy standards, and also to wind down a program allowing automakers to offset sales of gas-powered vehicles with credits from electric vehicles.

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The Elon Musk-led electric-vehicle maker said in comments posted online Tuesday by the US National Highway Traffic Safety Administration that the agency should adopt its most stringent Corporate Average Fuel Economy proposal, which would require all carmakers to achieve an average of nearly 75 miles-per-gallon by 2032.



That goes far beyond NHTSA’s recommendation for a new vehicle fleet average of 58 miles (93.3 kilometers) per gallon by 2032, up from the current mandate for an average of 49 miles per gallon by 2026. The Washington-based Alliance for Automotive Innovation, which represents major automakers such as Ford Motor Co., General Motors Co., Stellantis NV, Honda Motor Co. and Toyota Motor Corp. has said NHTSA’s proposal will cost manufacturers $14 billion in fines.

Read More: Carmaker Lobby Says Stricter Fuel Economy Would Cost Billions

Tesla also argued federal regulators should end a credit program that some environmentalists say undercuts the CAFE program’s pollution-fighting mandate. Carmakers have been allowed to claim an equivalent of more than 100 miles (161 kilometers) per gallon for each EV in their lineup, allowing them to meet fleetwide mandates even as they sell conventional gas guzzlers.

Tesla said in its comments submitted Monday to NHTSA that “creates asymmetry in the regulation favoring ICE vehicles, diverts research and development investment away from the best emissions reduction technology of electrification, and unnecessarily weakens the stringency of the standard.”

EV market leader Tesla has been one of the biggest beneficiaries of the credit system. Its revenue from the sale of regulatory credits to other automakers came to $282 million in the quarter ended June 30, but has the company has said it expects such revenue to shrink as competitors launch more of their own EVs.

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