HEADLINES IN THE NEW YORK TIMES, July 26, 2025, are provocative: “Republicans Propose a New Way to Scrap Fuel Economy Rules: No Fines.” Brad Plumer and Jack Ewing report, “For 50 years, automakers have had to increase the fuel efficiency of their vehicles or pay fines. The Republic megabill would set those penalties to $0.”
The Times researchers recount, “Environmentalists fear that without penalties to enforce compliance, automakers could freely ignore those rules, leading to expanded gasoline use and more pollution from millions of tailpipes. The measure could also slow the growth of electric vehicles, which are already facing stiff headwinds under the Trump administration.”
They continue, “The fuel economy rules, known as CAFE standards, were adopted amid the 1970s oil crises in order to curb America’s dependence on foreign crude. Since then, they have helped reduce the nation’s oil consumption by roughly one-quarter, or five million barrels per day, according to the Transportation Department.”
Background. The fuel efficiency of the average passenger car sold in the United States in 1975 was approximately 13.5 miles per gallon. Then, encouraged by the 1973-1974 fuel crisis, along came Corporate Average Fuel Economy Standards.
Wikipedia recounts, “Fuel economy regulations were first introduced in 1978, only for passenger vehicles. NHTSA kept CAFE standards for cars the same from 1985 to 2010, except for a slight decrease in required mpg from 1986 to 1989. The next year, a second category was defined for light trucks.”
Concentrating on cars, 1978 CAFE’s 18.0 mpg rose to 27.5 mpg in 2010 (with that four-year easement noted above).
Then came annual nudges upward with recent fluctuations based on which administration is in power. Also, see Motor Trend’s “Trump Transportation Secretary Calls Fuel Economy Standards ‘Illegal,’ Pushes to Revise Them,” June 9, 2025.
2024 MPGs. The WJBF website offers “Understanding MPG Trends Across States,” December 14, 2024, with data from iseecars.com. The national average of 1-to-5-year-old cars was 27.5 mpg, with 6.4 percent of them 2024 hybrids and EVs. States ranged from California’s 33.5 mpg with 14.4-percent hybrids/EVs to North Dakota’s 22.6 mpg and 2.9-percent hybrids/EVs.
Hmm….
The Non-Compliance Fee. In 1975, a fee for non-compliance was envisioned at $5/car per 1/10-mpg shortfall times the number of such cars produced. This quickly became $5.50 and eventually settled to its current $14.
My handy CPI Inflation Calculator equates $5 to $30.21 in today’s dollar, thus making $14 seem a pretty good bargain in encouraging manufacturers to double mpg since 1975.
Tomorrow we’ll continue the discussion of CAFE pros and cons, together with a giant con job played by Tesla. ds
© Dennis Simanaitis, SimanaitisSays.com, 2025
