Attorney General Bonta Calls on NHTSA to Restore Penalties for Automakers that Failed to Comply with Fuel Economy Standards

OAKLAND – California Attorney General Rob Bonta and New York Attorney General Letitia James today, leading a coalition of 13 attorneys general, urged the National Highway Transportation Safety Administration (NHTSA) to restore penalties for automakers that failed to meet corporate average fuel economy (CAFE) standards for model year 2019-2021 vehicles. In 2016, NHTSA imposed an inflation-adjusted penalty of $14 for every tenth of a mile-per-gallon (mpg) that an automaker falls below the CAFE standards beginning for model year 2019 vehicles. This penalty was reduced by NHTSA in an interim final rule just before President Trump left office. In today’s comment letter, the coalition calls for the immediate reversal of this rule and reinstatement of the $14 penalty.

“As we enter Climate Week, there is one thing we all know for sure: there’s no time left to waste in the fight against climate change,” said Attorney General Bonta. “Every year counts, and we can’t let anyone off the hook – particularly those companies that steadfastly refuse to do their part. The fact is, automakers have had years to comply with federal regulations and increase the fuel economy of their vehicles. NHTSA should not give those that failed to do so a free pass.”

Under the Trump Administration, NHTSA repeatedly sought to slash the penalty paid by automakers that failed to meet CAFE standards from $14 to $5.50. A California and New York-led coalition successfully challenged these unlawful rules in the Second Circuit in 2018 and 2020. In January 2021, NHTSA made a third attempt to revert to the much lower $5.50 penalty. Shortly after, the coalition of attorneys general filed a new lawsuit challenging the penalty change. That litigation is currently in abeyance while NHTSA considers new regulations.

In the comment letter, the coalition calls on NHTSA to withdraw this unlawful Trump-era rule, and reinstate the higher penalties for automakers that fail to meet CAFE standards. The coalition argues that NHTSA has no reason to delay these penalties to future model years because:

• Any violation of the CAFE standards for model years 2019–2021 occurred well after NHTSA increased the penalty to $14, negating any retroactivity concerns;
• Automakers have known since at least July 2016 that NHTSA was raising the CAFE penalty to $14, so claims that they reasonably relied on the $5.50 penalty rate lack credibility; and
• There is no evidence showing that the pandemic impacted compliance with the CAFE standards.

Attorneys General Bonta and James are joined by the attorneys general of Connecticut, Delaware, Illinois, Iowa, Maryland, Massachusetts, New Jersey, Oregon, Pennsylvania, Vermont, and Washington.

A copy of the comment letter can be found here.