Monday, 17 January 2022 11:51

Tesla’s Request for Tougher Fuel Economy Penalties Thrown Out by U.S. Appeals Court

Written by Joey Klender, Teslarati


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Tesla’s request for tougher penalties on automakers that fail to meet U.S. fuel economy standards was thrown out by a U.S. appeals court Jan. 13.

The request from the electric automaker was initially put forward in April 2021 but was rejected by the Second Circuit U.S. Court of Appeals, as there was a pending investigation into the company’s vehicles by the National Highway Traffic Safety Administration (NHTSA).


Tesla once again asked for the court to take immediate action in August when it submitted a second complaint. The court rejected Tesla’s request Jan. 13.


Automakers have been held to penalties for not meeting emissions and fuel economy standards, but former President Donald Trump doubled potential penalties during the final days of his four-year run in the White House. This affects Tesla directly because it sells credits to other automakers, which helps companies who cannot reach fuel economy standards avoid massive penalties.


Automakers have voiced the penalties could cost them up to $1 billion every year if they do not meet rules and are forced to buy credits from other carmakers that can sell them.


When Trump increased the penalties for not aligning with Corporate Average Fuel Economy (CAFE) requirements, Tesla’s sale of credits became less valuable, according to Reuters. Previously, former President Barack Obama had set the penalties to start with the 2019 model year. Trump’s revision set the effective date with 2022 model year vehicles.


Tesla met with the NHTSA in August to request...

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