The US National Highway Traffic Safety Administration (NHTSA) has proposed stricter fuel economy standards for new vehicles manufactured between 2027 and 2032, as reported by AP News on July 29. The proposed rules call for a yearly 2% increase in fuel economy for new cars and a 4% increase for light trucks. These proposed regulations build upon NHTSA’s 2022 standards for vehicles produced from 2024 to 2026, which gradually raised the fleet-wide fuel economy requirements to 49 miles per gallon (mpg) in 2026. The new proposal aims to further raise the fuel economy requirement to 58 mpg by 2032.
If adopted, the NHTSA’s 2027-2032 standards are projected to result in a significant 56% reduction in emissions and a substantial increase in the adoption of electric vehicles (EVs). The agency estimates that EVs will account for about 67% of all new vehicles sold in 2032, compared to the current figure of just over 7% of total sales. In line with these efforts, the US Environmental Protection Agency (EPA) is also preparing to introduce more stringent emission standards to ensure that two-thirds of all new car sales are EVs in 2032. In the face of tougher fuel economy and emissions rules, automakers will need to either release more EVs and gas-electric hybrids or improve the efficiency of gas and diesel vehicles. In June 2023, Stellantis [STLA:FP] and General Motors (GM) [GM:US] have paid a total of USD363m in civil penalties for failing to meet the fuel economy standards.