Under the Trump administration, the reduction requirement was reduced to just 1.5%. Biden will be returning to the 5% standard, at least to start. Beyond 2026, the reduction requirement will increase, contingent on who occupies the White House at that time.
However, regulations are only effective based on how well they're enforced.
"CAFE" is the abbreviation given to the "US Corporate Average Fuel Economy Standards." Basically, if a car company doesn't comply with fuel efficiency standards, CAFE is the enforcement agency they'll have to work with.
Since 1997, there has been a specific way of formulating penalties for car companies who exceed their pollution quotas, as detailed by
. Fines for violations were assessed by a specific formula.
You would multiply $5.50 x exceeded allotment of MPG fuel economy x fleet sales. There were other systems of credits and "catch-up" penalties, but we'll overlook that for the sake of simplicity.
It appears the $5.50 multiplier used to assess fees is going to increase. By a lot. President Biden will be more than raising that fine assessment to $14. If car companies wants to keep making gas guzzlers, it's going to cost them a lot more to do so.
How different automakers will react
The increased penalties for not complying with environmental policies will probably be heard loud and clear. Every carmaker who does business in the U.S. has taken note.
In previous times, a car company may consider pollution fines as just a cost of doing business. With the increased fee multiplier, car companies now need to get serious about reducing emissions.
President Biden has made it clear that he wants 40%-50% of new car sales to be electric by 2030, per the