Car Lovers Rejoice! After 50 Miserable Years, CAFE Standards Are Dead

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One of the most important provisions in the One Big Beautiful Bill has gone completely unnoticed, but promises to make the auto industry great again.

For 50 years, the federal government has been forcing fuel economy standards on auto companies. If the average fuel economy of the cars sold in a year exceeded a federal standard, the companies had to cough up enormous penalties.

Passed in 1975 as a way to deal with an energy crisis (that was caused by government price controls), “corporate average fuel economy” (CAFE) standards – required the fleet of cars sold by an automaker to achieve an arbitrary miles-per-gallon goal. If they missed the goal, they paid hefty annual fines.
From the beginning, these standards were a disaster, forcing automakers to radically downsize their fleet, which research showed cost thousands of lives because, all things being equal, smaller, lighter cars are less safe than larger ones.

In fact, a 2002 National Academy of Sciences found that these fuel economy standards not only boosted the cost of cars, but may have caused as many as 2,600 more traffic fatalities just in 1993.

The standards, which were ratcheted up year after year, also wildly distorted the car market. To meet them, automakers had to sell more small cars than consumers wanted to buy, which meant heavily discounting them, and then making the cost up by jacking up prices on the bigger cars most buyers wanted or needed. Carmakers routinely paid extravagant fines for failing to meet the standards. Last year, Chryster had to write a check to Uncle Sam for more than $190 million.

And because the government set tighter standards for passenger cars than light trucks, the industry responded by killing station wagons and replacing them with gas-hogging minivans and SUVs – negating much of the fuel savings the CAFE standards were supposed to produce.
This time around, Trump is again planning to roll the CAFE standards back. But Congress did him one better. Rather than wait for regulators to rewrite the rule, which can take years and be subject be endless lobbying and litigation from various interest groups – lawmakers simply zeroed out the penalty as part of the One Big Beautiful Bill.

Now, if a car company sells cars that, on average, exceed whatever the fuel-economy limit is technically in force in a given year, they pay… nothing. The mandate is still in place, but the penalty is now $0.00. (Republicans pulled off the same trick with the dreaded Obamacare insurance mandate — zeroing out the penalty rather than trying to get the mandate repealed.)
But automakers noticed. As one car enthusiast noted on Instagram: “The immediate industry response proves how quickly things can change when regulations lose their bite. Stellantis just brought its legendary Hemi V8 engines ‘back from exile’ and announced the return of its SRT speed shop, famous for cranking V8s to extreme power levels. This marks a dramatic reversal of the downsizing trend that saw turbocharged 4-cylinder engines replace V6 powerplants across midsize cars, SUVs, and even large pickups over the past decade.⁠”
V8s to return?
 
Upvote 18
Small, affordable pickups, please? Seriously, modern half-tons are just too damn big; give me something the size of a 1990's S-10 with an AC and a radio.
 
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Toyota had to fag up their whole pickup line because of these arbitrary rules and now I don't want either of their trucks. The full size truck should have a V8 and the Tacoma, a v6. I don't believe a 2.4L turbo will tow better than a 4L v6. It would be wound up like a sewing machine the entire time with nothing in the bottom end.
 
One thing I am tired of is the manufactures trying to razzle dazzle people with these big numbers on paper. “Of course it’s a better motor, more hp and tOrQuE!” …when we all know the real life experience is minimal mpg difference and a struggling jerky pos engine that blows up at 100k
 
I'm really jealous of those little pickups from the 90s. The people I know who still have them maintain them vigilantly because they know they can't be replaced
 
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