December 21, 2016 / 4:30 PM / 7 months ago

U.S. delays hiking fuel economy fines until 2018

2 Min Read

WASHINGTON, Dec 21 (Reuters) - The U.S. National Highway Traffic Safety Administration said Wednesday it will delay a planned jump in fines for automakers who fail to meet fuel efficiency requirements until late 2018.

Two major auto trade associations representing carmakers including General Motors Co, Toyota Motor Corp and Volkswagen AG had urged U.S. regulators to reconsider plans to more than double fines for failing to meet fuel efficiency requirements, saying the move could have boosted industry compliance costs by $1 billion annually.

In 2015, Congress ordered federal agencies to adjust civil penalties to account for inflation and, in response, NHTSA proposed to raise fines to $14 from $5.50 for each 0.1 mile per gallon each vehicle is below required standards. Automakers had said the higher fines could have impacted vehicles built since 2014.

NHTSA also said Wednesday in a separate announcement that it will consider a proposal from automaker trade groups to further "harmonize" its rules with requirements from the Environmental Protection Agency. Automakers are seeking further flexibilities as they face steep increases in requirements through 2025.

The announcement comes as the auto industry is urging the incoming administration of President-elect Donald Trump to conduct a sweeping review of the Obama administration's fuel efficiency requirements.

In 2011, President Barack Obama announced an agreement with major automakers to raise fuel efficiency standards to 54.5 mpg, which the administration said would save motorists $1.7 trillion in fuel costs over the life of the vehicles but cost the auto industry about $200 billion over 13 years. (Reporting by David Shepardson; Editing by Chizu Nomiyama)

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