US expected to declare Biden fuel economy rules exceeded legal authority

The U.S. Transportation Department is expected to declare that fuel economy rules issued under then President Joe Biden exceeded the government's legal authority by including electric vehicles in setting the rules, automaker officials said Monday.

Transportation Secretary Sean Duffy said the department's National Highway Traffic Safety Administration on Friday submitted its interpretive rule, "Resetting the Corporate Average Fuel Economy Program" to the White House for review.

The prior administration had "illegally used CAFE standards as a backdoor electric vehicle mandate – driving the price of cars up," he said in a statement.

Removing EVs from the calculations for credits and the regulatory mandates could result in lower overall fuel economy requirements.

NHTSA in June said it would hike CAFE requirements to about 50.4 miles per gallon (4.67 liters per 100 km) by 2031 from 39.1 mpg currently for light-duty vehicles.

Last year, 120 Republican lawmakers said NHTSA exceeded its authority by adopting fuel economy standards "that effectively mandate EVs while at the same time force the internal combustion engine out of the market."

The lawmakers said the agency "accounted for EVs in its regulatory baseline and factored that baseline into its determination of the maximum achievable CAFE standards."

House Republicans last week proposed killing the EV tax credit and repealing fuel efficiency rules designed to prod automakers into building more zero-emission vehicles as part of a broad-based tax reform bill.

Federal law requires NHTSA to set CAFE standards at the maximum feasible level.

The Environmental Protection Agency also plans to reconsider parallel vehicle emissions rules and rescind California's legal authority to ban sales of gas-only vehicles by 2035. The U.S. Senate this week may take up legislation passed by the House to rescind the approval for California's rules. Automakers like General Motors and Toyota are aggressively lobbying for repeal.

NHTSA said last year the rule would reduce gasoline consumption by 64 billion gallons and cut emissions by 659 million metric tons. The agency said while some vehicles would be more expensive to buy, consumers would save on fuel costs with estimated net benefits of $35.2 billion.