The American Petroleum Institute (API), along with a coalition of automakers and agriculture organizations, filed a lawsuit on June 26th, 2024, challenging the latest fuel economy standards set by the National Highway Traffic Safety Administration (NHTSA).
The lawsuit targets the Corporate Average Fuel Economy (CAFE) standards, which dictate the average fuel efficiency of new cars and light trucks sold in the United States. The NHTSA’s new rule, applying to model years 2027-2032, imposes significant increases in fuel efficiency requirements.
The API argues that the new CAFE standards are unrealistic and will ultimately force car manufacturers to prioritize electric vehicles over traditional gasoline-powered models.
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They claim this will limit consumer choice and drive up the cost of new vehicles, especially during a period of high inflation.
The lawsuit is joined by several auto dealer groups, representing major car brands. Additionally, agricultural organizations like the National Corn Growers Association and the American Farm Bureau Federation are also listed as co-petitioners. These groups express concern that a shift away from gasoline-powered vehicles will hurt demand for corn-based ethanol, a biofuel blended with gasoline.
This lawsuit is the latest in a series of legal challenges mounted by the API against the Biden administration’s vehicle regulations. The API has previously filed suits against the Environmental Protection Agency’s (EPA) emissions standards for both light-duty and heavy-duty vehicles.
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The lawsuit throws the future of fuel economy standards in the United States into question.
The Biden administration has prioritized addressing climate change, and stricter fuel economy regulations are seen as a ‘key tool.’
However, the auto industry and its allies argue that the administration’s approach is too aggressive and will ultimately harm consumers. The courts will decide the fate of the CAFE standards and the broader debate over how to balance environmental concerns and economic realities.
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