Tesla went to court to push for reinstating the higher emissions fines for automakers who don’t comply to emissions standards. The fines were delayed by the Trump administration.
Last month, several states and environmental organizations sued the National Highway Traffic Safety Administration (NHTSA) for delaying the adoption of the higher penalties for automakers that fail to meet fuel efficiency requirements. They were adopted under the Obama administration but delayed by the Trump administration.
These fines are the biggest short-term incentives for automakers to offer more electric vehicles in the US.
The current effort in the court aims to give back teeth to the Corporate Average Fuel Economy (CAFE) program that was made weaker by the Trump administration.
While the new Biden administration has shown support for the stricter standards and higher penalties, they haven’t supported this effort in the court, and instead, the administration is waiting for NHTSA’s review of CAFE, which will take up to six months.
In court, Tesla argued that the change was unlawful in the first place and therefore should be reverted, according to a filing obtained by Reuters:
The Trump administration on Jan. 14 delayed the start of higher penalties until the 2022 model year. Tesla told the Second Circuit US Court of Appeals the Trump action was “unlawful” and “diminishes the value of performance-based incentives that electric vehicle manufacturers, such as Tesla, accrue under the standards.”
Officially, the US government’s position is that there’s no need to rush the process through the court and instead, they should wait for the review.
But Tesla claims that the delay is causing injury to Tesla:
The Trump administration’s egregious action presents a situation as extraordinary as it is unjustified and inflicts immediate and irreparable injury on Tesla.
The automaker says that the government is “ignoring the ongoing impacts” on the credit-trading market.
Automakers can avoid fines by trading credits with automakers who are exceeding the standards, which Tesla is doing by only selling all-electric vehicles.
The sale of those emissions credits across several programs have brought hundreds of millions of dollars in revenue to Tesla every year.
However, automakers who are not selling significant numbers of electric vehicles in the US haven’t had to worry too much about the CAFE program due to the fines being frozen for years and the recent delay.
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