New Fuel Economy Regs Weaken Transportation Safety Message

With the Christmas holiday driving season upon us, it’s sobering that road deaths and injuries are rising. According to the Department of Transportation’s National Highway Transportation Safety Administration, more than 20,000 Americans died on U.S. roads in the first six months of 2021, an increase of 18.4 percent over the same period in 2020. This is the worst since 2006.

In response, Department of Transportation Secretary Pete Buttigieg has announced a National Roadway Safety Strategy, aimed at reducing fatalities. He said on October 28, “We cannot and should not accept these fatalities as simply a part of everyday life in America.”

Secretary Buttegieg’s strong stand in favor of safety makes it all the more puzzling that NHTSA, along with the Environmental Protection Agency, is proposing new regulations for fuel economy, called Corporate Average Fuel Economy (CAFE) standards. NHTSA openly states that these regulations would increase traffic deaths and injuries.

The new fuel economy proposal will raise the 2026 Corporate Average Fuel Economy standard to 48 miles per gallon (MPG) from the current standard of 40 MPG.  The rule would set a new minimum standard of 50 MPG for passenger cars made in the United States, with fines for non-compliant carmakers. This would increase the price of cars by $2,264 (before inflation) by 2026, and the price of light trucks by $2,210, according to NHTSA.

This price increase means that fewer people will be able to afford new and later-model used cars, which are safer than old cars. In tables in its Preliminary Regulatory Impact Analysis, published in October, NHTSA estimates that new vehicle sales will decline by more than 2 percent, leading to 1,800 additional deaths on the road each year, 80,000 more injuries, and almost 300,000 more crashes involving property damage.

This increase contradicts NHTSA’s core values, namely leading “the Nation by setting the motor vehicle and highway safety agenda,” and serving “as the catalyst for addressing critical safety issues that affect the motor vehicle and highway safety communities.”

Deaths and injuries from new CAFE rules will be concentrated among low-income Americans, disproportionately minorities, because, due to the price increases, they will buy fewer new cars and fewer later-model used cars.

It is curious that NHTSA should choose to do this, because it directly contradicts the Department of Transportation’s focus on “Health and Equity.” According to the Department, “households in low-income areas typically own fewer vehicles, have longer commutes, and have higher transportation costs.”

The proposed 48 MPG average for CAFE standards will require carmakers to sell more electric vehicles to comply. However, if people choose not to buy the vehicles, carmakers will have to reduce their prices and raise prices of popular pickup trucks and SUVs to stay profitable. Lower-income and Americans in rural areas will be paying more for their preferred vehicles, subsidizing better-off residents in cities and California, who are the main purchasers of electric vehicles.

Automakers will be harmed both by higher prices of the new cars, which will reduce vehicle sales, and by the subsidies for electric vehicles. Electric vehicles require less labor to make and rely on batteries from China. In addition, the 50 MPG minimum standard for domestically manufactured passenger cars would encourage carmakers to produce passenger cars abroad.

NHTSA and EPA claim that this proposal will be beneficial because it will have a small effect on global temperatures, and because drivers will spend less on gasoline. But the increased deaths, injuries, property damage, and offshored carmakers’ jobs should concern Secretary Buttigieg and others who value road safety and employment.

On Thursday the Senate Commerce Committee will hold confirmation hearings for Steve Cliff to be Administrator of the National Traffic Highway Safety Administration. Cliff is now NHTSA’s Acting and Deputy Administrator. Senators might want to ask why safety—DOT’s mission—is being sacrificed during his tenure.