Tesla's Environmental Stand To NHTSA: Wants To Eliminate Off-Cycle Credits and Boost Fuel Economy Standards

Tesla, Inc. TSLA has urged the National Highway Traffic Safety Administration to implement a fundamental emphasis on conserving energy and the environmental impacts of fossil fuel use. 

The company has also called out the NHTSA to eliminate all off-cycle credits starting in 2027, according to a comment made by the firm in an online post.  

The credit system allows automakers to offset sales of gas-powered vehicles with credits from electric vehicles, according to a news report by Bloomberg.

Under this system, vehicle manufacturers have been permitted to claim an equivalent of over 100 miles (161 kilometers) per gallon for each electric vehicle (EV) they offer, enabling them to meet overall fleet requirements while continuing to sell traditional "conventional gas guzzlers," the report adds.

This apart, Tesla suggested that the auto regulator adopt a "stringent Corporate Average Fuel Economy proposal," which would require all carmakers to achieve an average of nearly 75 miles per gallon by 2032, noted Bloomberg.

The number doesn't match NHTSA's recommendation for a new vehicle fleet average of 58 miles (93.3 kilometers) per gallon by 2032, up from the current order for an average of 49 miles per gallon by 2026, the report adds. 

The Alliance for Automotive Innovation, based in Washington and representing prominent automakers including Ford Motor Company F, General Motors Company GM, Stellantis N.V. STLA, Honda Motor Company, Ltd. HMC, and Toyota Motor Corporation TM, has asserted that the NHTSA's proposal would result in manufacturers facing fines amounting to $14 billion.

Tesla said it currently produces and sells four fully electric and zero-emissions light-duty vehicles (ZEVs). 

As the EPA recognized in its 2022 Automotive Trends Report, Tesla had by far the lowest carbon dioxide emissions (0 g/mi) and highest fuel economy (124 miles per gallon equivalent) of all large vehicle manufacturers in MY 2021.

Price Action: TSLA shares are trading lower by 0.73% to $252.98 on the last check Wednesday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.