NHTSA Releases Final Interpretive Rule for CAFE

The National Highway Traffic Safety Administration (NHTSA) issued a final interpretive rule titled “Resetting the Corporate Average Fuel Economy Program (CAFE)”. NHTSA is clarifying its legal boundaries regarding fuel economy standards. The agency asserts that previous rules improperly treated electric vehicles (EVs) differently, effectively mandating them—an interpretation NHTSA now calls unlawful.

Key Takeaways

1. Statutory Compliance
   • Under the Energy Policy and Conservation Act (1975), the Energy Independence and Security Act (2007), and other statutes, EVs cannot be treated as a special case in CAFE targets.
   • NHTSA identifies several statutorily prohibited factors that influenced previous fuel economy rulemaking.
2. No Immediate Standards Change
   • This interpretive rule doesn’t alter the current CAFE or medium-heavy-duty vehicle standards. Instead, it sets guidelines for future standard reviews and enforcement.
3. Legal & Executive Backdrop
   • The rule comes under the broader policy agenda known as “Unleashing American Energy” and the Secretary’s internal “Fixing the CAFE Program” memorandum, aligning with President Trump’s Executive Order directives.

The administration argues that prior CAFE rules artificially inflated vehicle prices by incentivizing EV production, making gasoline-powered cars more expensive. This reset is intended to lower costs and expand consumer choice.

By removing what it deems an implicit EV mandate, the DOT aims to make vehicle production—and purchasing—more affordable and domestically oriented .

As the rule doesn’t change existing standards, NHTSA is set to initiate a new rulemaking process to establish replacement CAFE and medium-heavy-duty standards grounded in this legal interpretation. NHTSA will craft and propose new fuel economy rules, following the legal principles outlined in this interpretive rule.

This rule represents a pivotal shift in U.S. fuel economy policy: clarifying that electric vehicles cannot be treated as special under CAFE and establishing a new legal framework for future vehicle efficiency standards. It does not immediately change any fuel standards, but sets the stage for forthcoming rulemakings and likely industry and legal debate.

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