The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule III for Model Years 2022 to 2031 Passenger Cars and Light Trucks

This section details the statutory factors, data, and analysis that NHTSA considered when determining maximum feasible standards for MYs 2022-2026 and MYs 2027-2031.

A. The Energy Policy and Conservation Act of 1975 (EPCA), as Amended by the Energy Independence and Security Act of 2007 (EISA)

Under EPCA, NHTSA is required to set separate average fuel economy standards for new passenger cars and light trucks produced or imported for sale in the United States at “maximum feasible” levels.608 609 That mandate is subject to important limiting considerations, which center on the statutory concept of “maximum feasibility.” In determining maximum feasibility, NHTSA must consider the factors set forth in section 32902(f). Specifically, the fuel economy standards established by NHTSA must be based on consideration of technological feasibility, economic practicability, the effects of other Government standards applicable to motor vehicles, and the need of the United States to conserve energy.\610\

\608\ 49 U.S.C. 32902(a) and (b)(2)(B).

\609\ NHTSA received a comment from an individual commenter stating that the Secretary of Transportation issued an interpretation that DOT does not have authority to regulate fuel economy, see Docket No. NHTSA-2025-0491-0024. NHTSA believes this is a misunderstanding of the June 2025 interpretive rule, as DOT does have the authority to regulate fuel economy, and is finalizing a rule to do so through MY 2031, see 49 U.S.C. 32902.

\610\ 49 U.S.C. 32902(f).

Fuel economy standards are designed based on light-duty vehicles powered by “fuel,” which is defined in EPCA to include gasoline, diesel fuel, or other liquid or gaseous fuels with similar combustion properties as NHTSA identifies.\611\ While EPCA includes specific provisions designed to incentivize automakers to invest in the development of new technologies, including battery-electric and other alternative-fuel powertrains, EPCA prohibits NHTSA from considering the fuel economy of alternative-fueled vehicles in setting or amending its standards.\612\ As for dual-fueled vehicles, such as plug-in hybrid electric vehicles (but not non-plug-in hybrid vehicles),\613\ the statute requires NHTSA to consider their fuel economy only while operated exclusively on gasoline or diesel fuel.\614\ EPCA also prohibits NHTSA from considering the availability of compliance credits in setting or amending its standards.\615\

\611\ 49 U.S.C. 32901(a)(10).

\612\ 49 U.S.C. 32902(h).

\613\ See 63 FR 66066 (Dec. 1, 1998). Non-plug-in hybrid vehicles are not dual-fueled vehicles under Chapter 329 because any electricity generated by the electric motors or other electric components are generated solely by the petroleum-fueled engine and the batteries are incapable of charging from an external source: “a vehicle which is entirely dependent on a petroleum fuel for its motive power, regardless of whether electricity is used in the powertrain, is powered by petroleum.”

\614\ 49 U.S.C. 32901(a)(1), (8), (9), and (10); 49 U.S.C. 32902(h).

\615\ Id. at 32902(h)(3).

In addition to these considerations, section 32902 includes several provisions specifying how NHTSA must prescribe CAFE standards, including the form that the CAFE standards must take and the manner and timing of setting such standards and any subsequent amendments.\616\ The following

subsections discuss in greater detail these requirements, including the requirement to set maximum feasible fuel economy standards.

\616\ See, e.g., 49 U.S.C. 32902(a) (specifying that prescription of standards by regulation shall occur at least 18 months before the beginning of the model year); 49 U.S.C. 32902(b)(3) (specifying that standards shall be based on 1 or more vehicle attributes related to fuel economy and expressed in the form of a mathematical function).

1. Administrative Provisions Governing CAFE Standard Setting a. Lead Time, Amendatory Authority, and the Number of Model Years for Which Standards May Be Set at One Time

EPCA requires that NHTSA prescribe new CAFE standards at least 18 months before the beginning of each model year.\617\ In addition, EPCA authorizes NHTSA to prescribe regulations amending the standard established previously for a model year to a level that the Secretary determines is the maximum feasible average fuel economy level for that model year.\618\ NHTSA previously had interpreted EPCA to allow amendments reducing the stringency of an industry-wide fuel economy standard for a particular model year up until the beginning of the model year in question.\619\ The beginning of the model year is considered generally to be October 1 of the calendar year preceding the named model year (e.g., a MY 2027 vehicle might be offered for sale on or after October 1, 2026).\620\ However, the statute does not contain any language limiting the model years for which standards may be amended. The only statutory provision addressing a time limit for an amendment to an existing standard says that NHTSA must provide at least 18 months of lead time if the standards are amended to become more stringent.\621\ EPCA contains no lead time requirement if the amendment makes an average fuel economy standard less stringent. As such, NHTSA interprets EPCA as authorizing amendment of standards after a model year has commenced or concluded, so long as the amendment makes the standard less stringent.

\617\ 49 U.S.C. 32902(a).

\618\ 49 U.S.C. 32902(c).

\619\ 49 FR 41250, 41255 (Oct. 22, 1984); 53 FR 14241, 14241- 14302 (Apr. 28, 1988).

\620\ See In re Ctr. for Auto Safety, 793 F.2d 1346 (D.C. Cir. 1986).

\621\ 49 U.S.C. 32902(g)(2).

NHTSA recognized in the proposal that this is a change in its previous interpretation of the statute with respect to generally applicable standards.\622\ NHTSA's prior interpretation was made in response to a manufacturer request for broad downward adjustment to standards in response to manufacturer non-compliance. In this case, NHTSA is amending existing standards promulgated contrary to specific statutory provisions to ensure that vehicle manufacturers are not in the position of committing violations because they could not meet a standard that is impermissibly high and far above the maximum feasible level for vehicles with internal combustion engines (i.e., the vehicles for which the agency has the authority to set standards).\623\ This conclusion is consistent with NHTSA's rationale for amending standards for low-volume manufacturers in some cases well after the conclusion of a model year, to avoid penalizing manufacturers for NHTSA's own conduct (there, a delay in addressing the manufacturers' petitions).\624\

\622\ 49 FR 41250, 41255 (Oct. 22, 1984) (referencing the EPCA Conference Report's statement that “[a]n amendment which has the effect of making an average fuel economy standard less stringent can be promulgated at any time prior to the beginning of the model year in question,” the APA's definition of a “rule,” and the agency's belief that Congress intended to provide certainty and finality for manufacturers' planning purposes and that Congress intended standards to “encourage the achievement of particular fuel economy levels rather than simply ratifying past conduct.”); 53 FR 14241- 14302 (Apr. 28, 1988) (explaining that retroactive downward adjustments were inconsistent with the statutory scheme as inferred by congressionally imposed credit and civil penalty provisions, equity considerations, the APA, and General Motors' perceived theories of Congressional intent). See also Gen. Motors Corp. v. Nat'l Highway Traffic Safety Admin., 898 F.2d 165 (D.C. Cir. 1990).

\623\ 49 U.S.C. 32911(b) (“A manufacturer of automobiles commits a violation if the manufacturer fails to comply with an applicable average fuel economy standard under section 32902 of this title.”).

\624\ See 87 FR 39439, 39441 (July 1, 2022) (explaining that NHTSA has previously granted retroactive low-volume exemptions when administrative delays prevented determinations on petitions prior to the beginning of the model year, reasoning that denying relief would effectively nullify a Congressionally-mandated program. To avoid unfairly penalizing manufacturers for agency inaction (in particular, when manufacturers had submitted timely and complete petitions for exemption to the agency), NHTSA interpreted EPCA to authorize retroactive exemptions).

NHTSA's conclusion is further supported by legislative action amending the CAFE civil penalty provision, which applies to years for which the Secretary of Transportation (NHTSA, by delegation) has not notified a manufacturer of the penalty due for an average fuel economy less than the applicable standard.\625\ The elimination of civil penalties for these model years obviates NHTSA's prior concern that amending standards after the end of a model year “would undermine the limits Congress placed on NHTSA's authority to mitigate penalties.” \626\ That statutory change likewise applies to MY 2022 and later. Accordingly, NHTSA stated in the proposal that the agency was proposing to amend standards beginning in MY 2022, also consistent with the Secretary's direction in the January 28, 2025 memorandum titled “Fixing the CAFE Program” as this was the earliest model year for which NHTSA has not concluded compliance proceedings.

\625\ Section 40006 of Public Law 119-21, 139 Stat. 72 (July 4, 2025).

\626\ See Gen. Motors Corp., 898 F.2d at 173.

NHTSA received several comments regarding the agency's authority to amend standards beginning with MY 2022. PMI and the Alliance supported NHTSA's authority to revise standards for prior model years, arguing that the agency retains the power to correct unlawful or infeasible standards, particularly those for MYs 2022-2026, which they state were void ab initio due to the illegal inclusion of electric vehicles in the baseline.\627\ AEI similarly contended that NHTSA is prohibited by law from considering dedicated automobiles and must therefore amend MYs 2022-2026 standards that included EV penetration.\628\

\627\ PMI, Docket No. NHTSA-2025-0491-5001-A2, at 32; the Alliance, Docket No. NHTSA-2025-0491-5707-A2, at II-4.

\628\ American Enterprise Institute (AEI), Docket No. NHTSA- 2025-0490-0061, at 3.

PMI also emphasized that the statute draws a sharp distinction between setting new standards and amending existing ones: while Congress explicitly imposed an 18-month lead-time requirement for new standards or amendments that increase stringency, subsection (c) of section 32902, which governs amendments generally, contains no such temporal limitation.\629\ PMI contended that this distinction demonstrates that Congress intended to protect automakers from sudden regulatory tightening but left the agency free to loosen standards if they were too stringent.\630\ PMI further stated that traditional administrative law restrictions on retroactive rulemaking do not apply to this proposal.\631\ Although there is a general presumption against retroactivity, PMI asserted that this principle exists to protect regulated parties from the unfair imposition of new duties or liabilities for past conduct.\632\ Because NHTSA's proposal relieves a regulatory burden rather than imposing burdens on formerly lawful conduct, the fairness concerns animating the presumption against

retroactivity are not implicated.\633\ With regard to automakers' banked credits, PMI cited the D.C. Circuit for the proposition that “regulatory credit `anticipation alone does not create a vested right.' ” \634\

\629\ PMI, Docket No. NHTSA-2025-0491-5001-A2, at 29.

\630\ Id.

\631\ Id. at 30.

\632\ Id. at 31.

\633\ Id.

\634\ Id. at 30.

In addition, PMI addressed historical D.C. Circuit precedent,\635\ stating that decisions upholding the agency's past refusal to amend standards retroactively are no longer controlling following the Supreme Court's Loper Bright decision.\636\ PMI noted that the D.C. Circuit had previously relied on Chevron deference to uphold NHTSA's policy preference at the time; without Chevron, the “single best reading” of the statute compels the agency to correct unlawful standards retrospectively.\637\

\635\ Gen. Motors Corp. v. Nat'l Highway Traffic Safety Admin., 898 F.2d 165 (D.C. Cir. 1990); Mercedes-Benz of N. Am., Inc. v. Nat'l Highway Traffic Safety Admin., 938 F.2d 294 (D.C. Cir. 1991).

\636\ PMI, Docket No. NHTSA-2025-0491-5001-A2, at 30.

\637\ Id. at 31.

On the other hand, several commenters, including NRDC et al., UCS, ZETA, IPI, SELC, Lucid, the Attorneys General, and individual commenters, argued that NHTSA lacks the authority to amend standards for model years that have already concluded or commenced.\638\

\638\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 23; UCS, Docket No. NHTSA-2025-0491-6027-A1, at 4; ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 1; IPI, Docket No. NHTSA-2025-0491-6015- A2, at 88; SELC, Docket No. NHTSA-2025-0490-0035, at 2; Lucid, Docket No. NHTSA-2025-0491-6043, at 6-7; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 98-100; S. Sotomayor, Docket No. NHTSA-2025-0491-4888; Will Schmidt and Juan Fernandez, Docket No. NHTSA-2025-0491-3469, at 3.

First, commenters including ZETA, NRDC et al., and the Attorneys General rejected NHTSA's reliance on statutory silence in subsection (c), asserting that silence cannot override the firmly embedded presumption against retroactivity.\639\ Citing the Supreme Court's decision in Bowen, ZETA, NRDC et al., and the Attorneys General stated that a statutory grant of rulemaking authority cannot encompass the power to promulgate retroactive rules unless Congress conveys that power in “express terms.” \640\ Regarding the amendment provisions in subsections 32902(c) and (g), the Attorneys General argued that any amended standard must be “maximum feasible,” a forward-looking term inherently meaning “capable of being done.” \641\ Because automakers cannot change past production, they argued that setting a feasible standard for concluded model years is logically impossible.\642\ NRDC et al. further stated that subsection (g)(1) demands that amended standards comply with subsection (a), which explicitly requires standards to be set “before the beginning of each model year.” \643\

\639\ ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 2; NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 24; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 98-99.

\640\ Id.

\641\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 99.

\642\ Id.

\643\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 25.

A pair of individual commenters stated that while 49 U.S.C. 32902(g) “exempts amendments that reduce stringency from the 18-month lead time requirement--it does not authorize the agency to rewrite standards years after a model year has concluded.” \644\ This commenter further observed that “[e]xemption from a timing requirement answers `how much notice must the agency provide?' It does not answer whether an agency may retroactively nullify standards that have already been applied, against which compliance has been assessed, and under which penalties have accrued,” warning that if NHTSA's interpretation were correct, “the agency could wait until 2030 and retroactively relieve manufacturers of all CAFE obligations stretching back a decade--a reading that would render the statutory scheme meaningless.” \645\ Other individual commenters stated that all standards, including downward amendments, are subject to EPCA's 18-month lead-time requirement.\646\

\644\ Will Schmidt and Juan Fernandez, Docket No. NHTSA-2025- 0491-3469, at 3.

\645\ Id.

\646\ Anonymous, Docket No. NHTSA-2025-0491-5040.

Commenters opposed to the amendments for MYs 2022-2026 further supported their position by citing the EPCA Conference Report, which states that “[a]n amendment which has the effect of making an average fuel economy standard less stringent can be promulgated at any time prior to the beginning of the model year in question.” \647\ A pair of individual commenters also commented on the meaning of the statutory term “amendment,” which they stated implies a modification to something currently operative.\648\ Regarding the practical impacts, commenters detailed how amendments to prior model years' standards will disrupt the CAFE program's statutory scheme and ignore manufacturers' reliance interests. NRDC et al. noted that because amendments to prior model years cannot change how vehicles were already built and sold, the rule will simply result in mass over-compliance, awarding automakers large credit banks for past years that they will use to avoid making future fuel economy improvements.\649\ Moreover, the Attorneys General and ZETA criticized the agency for failing to consider the reliance interests of automakers who made significant investments to comply with existing rules and generated credits that would be abruptly devalued or eliminated.\650\

\647\ SELC, Docket No. NHTSA-2025-0490-0035, at 2; UCS, Docket No. NHTSA-2025-0491-6027-A1, at 4.

\648\ Will Schmidt and Juan Fernandez, Docket No. NHTSA-2025- 0491-3469, at 3 (stating that one cannot amend a concluded model year any more than one can “amend yesterday's weather.”).

\649\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 30.

\650\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 100; ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 2-3.

UCS, NRDC et al., and IPI observed that NHTSA has consistently rejected amendments to prior model years since 1984 to ensure regulatory certainty.\651\ Similarly, an individual commenter stated that “[e]ven if the agency believes penalties are limited, retroactively changing regulatory benchmarks raises significant concerns regarding reliance interests, administrative finality, and whether the agency's action is reasonable and non-arbitrary.” \652\ This commenter argued that “[r]egulated entities and markets rely on finalized rules. Rewriting past standards after the fact undermines predictability and confidence in the government,” and concluded that if NHTSA believes prior rules were unlawful, “it must still explain how retroactive revision complies with the APA and why less disruptive alternatives were not pursued.” \653\ Another individual commenter stated that relaxing standards for past model years “would only serve to give a windfall of credits to some auto manufacturers while doing nothing to help consumers or incentivize innovation.” \654\ This commenter also argued that it is inappropriate to use historical individual vehicle compliance to determine standards for prior model years, as manufacturers previously

made choices based on the fleet average valuation mechanisms then in place.\655\

\651\ UCS, Docket No. NHTSA-2025-0491-6027-A1, at 7; NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 26; IPI, Docket No. NHTSA-2025-0491-6015-A2, at 90.

\652\ Kharisma Montes de Oca, Docket No. NHTSA-2025-0491-4552.

\653\ Kharisma Montes de Oca, Docket No. NHTSA-2025-0491-4552.

\654\ Jana Milford, Docket No. NHTSA-2025-0491-4828, at 1.

\655\ Id.

In addition, SELC, UCS, and NRDC et al. argued that the narrow statutory carve-out for low-volume manufacturers cannot be used to justify a blanket amendment of standards for prior model years for the entire industry.\656\ ZETA and NRDC et al. also objected to the concept that NHTSA could amend standards because compliance proceedings remained open, stating those proceedings are open only because NHTSA violated its own statutory duty to assess compliance annually.\657\ Finally, though American Honda Motor Co., Inc. (Honda) supported a regulatory reconsideration, it expressed concern at the “notable retroactive application,” stating that reaching back to MY 2022 and 2023 would unfairly penalize manufacturers who made good-faith investments.\658\ Honda suggested that focusing on MY 2024 and subsequent years would “[t]arget the core issue by addressing the consideration of electric vehicles at the point where they began to distort `maximum feasible' calculations of the fleets.” \659\

\656\ SELC, Docket No. NHTSA-2025-0490-0035, at 2-3; UCS, Docket No. NHTSA-2025-0491-6027-A1, at 5-6; NRDC et al., Docket No. NHTSA- 2025-0491-5928-A2, at 26.

\657\ ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 3; NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 29-30.

\658\ Honda, Docket No. NHTSA-2025-0491-6013, at 4.

\659\ Id.

NHTSA has carefully considered comments regarding the agency's authority to amend standards for model years that have already commenced or concluded. While the agency acknowledges the importance of regulatory finality, NHTSA disagrees with the commenters' assertion that it lacks the statutory or administrative authority to reset standards for MYs 2022-2026. NHTSA cannot assess manufacturer compliance against standards that considered factors in contravention of the express text of subsection 32902(h), including for compliance determinations for past model years. This is consistent with the agency's statutory authority, prior positions, and applicable case law, as discussed in more detail below.

First, NHTSA disagrees with the assertion that the 18-month lead- time requirement in 49 U.S.C. 32902(a) or the amendment provisions in section 32902(g) categorically bar the agency from revising standards after a model year has commenced. Although the agency has historically adopted a policy of limiting downward stringency amendments to those finalized before October 1, the authority to amend standards to the “maximum feasible” level under subsection 32902(c) confirms that Congress did not impose any explicit temporal restriction on amendments that reduce the stringency of the standards. In addition, as discussed below, NHTSA is not lowering standards to accommodate manufacturer compliance shortfalls. Rather, the agency's present action remedies standards for all outstanding model years that were statutorily defective from their inception due to the consideration of prohibited factors. NHTSA must adopt amended standards that reflect a correct application of the subsection 32902(h) factors and cannot enforce standards based on an incorrect application of those factors. Because NHTSA's assessment of manufacturer compliance against these amended standards will only operate prospectively in upcoming compliance determinations, these amendments are not retroactive.

This action is also distinguishable from the rulemaking invalidated in Bowen, where providers structured their operations using prospective cost limits to avoid having non-reimbursable costs from the Government.\660\ In contrast, this action imposes no costs on manufacturers as a result of the agency's appropriate application of standards that consider subsection 32902(h), including for compliance determinations for past model years. Because reducing the stringency of the standards based on a permissible consideration of statutory factors relieves compliance burdens rather than creating new liabilities, manufacturers face no retroactive monetary penalties--a result independently guaranteed by Congress setting the CAFE civil penalty rate to zero. For similar reasons, NHTSA agrees with PMI that the revisions for MYs 2022-2026 are not retroactive as articulated in Landgraf v. USI Film Products.\661\ Specifically, NHTSA's action to reset standards for those years does not impair rights a regulated party possessed when it acted, increase liability for past conduct, or impose new duties upon completed transactions. Because compliance proceedings have not yet commenced, the revised standards do not attach new legal consequences to events already finished; instead, they reflect the principle that applying updated standards to pending matters is permissible when it does not alter primary conduct or legal obligations.\662\

\660\ Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 214 (1988).

\661\ Landgraf v. USI Film Prods., 511 U.S. 244, 280 (1994).

\662\ See, e.g., Cox v. Kijakazi, 77 F.4th 983, 991 (D.C. Cir. 2023).

NHTSA has considered the reliance interests asserted by Honda, ZETA, and the Attorneys General. The agency recognizes that manufacturers make long-term capital investments based on established standards. However, the agency must correct standards that exceed what is maximum feasible for the industry as a whole due to the inappropriate inclusion of electric vehicles in the standard-setting process. NHTSA also agrees that regulatory credits do not constitute a vested right. Regardless of commenters' views regarding the timing of downward adjustments, NHTSA retains the authority to amend standards,\663\ meaning that regulatory credits remain speculative expectations rather than vested rights until NHTSA has verified manufacturer-submitted data, any necessary investigative work or corrective math is completed, and the agency has finalized compliance for the relevant model year. This has been the case since the creation of the credit program, and manufacturers expect adjustments until the agency finalizes compliance determinations for a given model year. Conversely, to the point raised by NRDC et al. and others regarding over-compliance and potential credit generation with the reset standards, credits generated under a corrected standard are a reflection of a manufacturer's performance against a legally valid benchmark. Furthermore, NHTSA believes that maintaining a standard that is legally and technically flawed poses a greater threat to regulatory stability than credits generated as an incidental consequence of a one- time correction.

\663\ 49 U.S.C. 32902(c).

NHTSA disagrees with commenters who argue that the agency is bound by its past positions or subsequent judicial affirmations of its past positions, such as General Motors Corp. v. NHTSA.\664\ As discussed above, NHTSA will assess compliance using these amended standards only in future proceedings, instead of assessing manufacturer compliance against an unlawfully established standard. In contrast, previously, NHTSA declined to lower standards that were lawfully established under EPCA simply because those standards ultimately proved to exceed manufacturer capabilities at the time of compliance. While the agency

previously cited appropriate policy reasons for denying the manufacturer's petitions--such as relying on Congress's statutory credit mechanism to absorb temporary shortfalls under lawfully promulgated standards--those policy considerations are inapplicable where, as here, NHTSA's threshold obligation is to ensure that the standards are established in accordance with EPCA. The present action addresses standards that relied upon factors and assumptions that the agency was statutorily proscribed from considering when setting those standards at their inception. Consequently, while previous denials of manufacturer petitions to lower standards after the commencement of a model year preserved legally valid standards against post-hoc compliance challenges, NHTSA's action today remedies standards that were defective from the outset.

\664\ Gen. Motors Corp. v. Nat'l Highway Traffic Safety Admin., 898 F.2d 165 (D.C. Cir. 1990).

As noted by PMI, the Supreme Court's decision in Loper Bright Enterprises v. Raimondo requires courts to determine, and agencies to follow, the single best reading of enabling legislation.\665\ Although the Supreme Court in Loper Bright stated that it does not call into question prior cases that relied on such deference,\666\ agencies retain authority to reconsider their prior statutory interpretations. As discussed, NHTSA has reconsidered the agency's prior interpretation and now concludes that the best reading of the statute authorizes amendments that make downward adjustments to standards after the applicable model year has commenced.

\665\ Loper Bright Enters. v. Raimondo, 603 U.S. 369, 400 (2024).

\666\ Id. at 412 (2024).

NHTSA believes that the best reading of EPCA is that the agency maintains the authority to correct standards that were promulgated using prohibited factors, such as the consideration of electric vehicles in the analytical baseline. Leaving such legally defective standards in place would place manufacturers in a legally contradictory compliance posture, forcing them to navigate corporate policies committing to legal compliance against fuel economy standards that the agency was statutorily proscribed from setting. NHTSA also disagrees that this action renders the statutory scheme meaningless. This amendment is based on a correction of a specific legal error, made in consideration of legally appropriate information and statutory factors, and informed by significant public comment, not an assertion of a generalized power to rewrite standards at will.

NHTSA acknowledges comments from ZETA and NRDC et al. regarding the timing of compliance assessments. NHTSA assesses compliance with CAFE standards as expeditiously as possible, in recognition of both manufacturer interest in understanding their own compliance positions and planning to use available compliance flexibilities like credits, in addition to the public's interest in publicly available information about fleet fuel economy.\667\ However, closing compliance proceedings based upon known legally infirm standards would be inappropriate. The agency retains the authority in appropriate circumstances to reconsider the underlying standards upon which final compliance assessments are based and will issue final compliance determinations against standards that reflect a correct construction of the statute.

\667\ See, e.g., NHTSA, CAFE Public Information Center, available at https://www.nhtsa.gov/corporate-average-fuel-economy/cafe-public-information-center (accessed: May 28, 2026).

NHTSA concludes that the best reading of EPCA provides authorization for NHTSA to reset to less stringent levels fuel economy standards applicable to passenger vehicles for prior model years. Subsections 32902(a) and (b) require the Secretary, starting with MY 2011, to establish fuel economy standards for light-duty vehicles at least 18 months in advance of the beginning of each model year. Subsection 32902(c) provides that the Secretary may amend previously established standards to levels the Secretary decides are the maximum feasible for that model year. Subsection 32902(c) contains no temporal limitation on an amendment. In subsection 32902(g), Congress specified a lead time requirement only for NHTSA actions to establish more stringent standards. It is well understood that the authority to amend standards conveys the authority to change standards that the agency has already established. Subsection 32902(c), by authorizing an amendment to an existing fuel economy standard, provides explicitly that the Secretary can revisit a prior determination of maximum feasibility. Congress clearly anticipated that the agency may need to revisit standards that new information indicates are no longer maximum feasible--either too high or too low--and imposed additional restrictions when making standards more stringent. Given the economic harm to the industry and consumers likely to result from overly stringent standards, Congress expressly declined to impose time restrictions to enable more nimble agency action when needing to reduce stringency.

The same reasoning applies to amending standards for past model years. Given the trend line connecting past and future standards, when previous standards exceed maximum feasibility because the agency considered factors explicitly disallowed from consideration, a course correction to restore the program to appropriate levels is necessary-- even if this results in generation of credits to account for additional manufacturer investment in fuel-saving technologies than might have occurred had an appropriate balancing been undertaken originally. NHTSA concludes that the grant of authority in EPCA to amend standards encompasses specifically the authority to establish less stringent standards affecting past MYs. As discussed in more detail in Section V.D, however, should a court determine that NHTSA lacks authority to adjust standards for MYs 2022-2026, the agency intends for the amended standards to apply to subsequent model years, as the rationale for these revisions applies with equal force to those standards.

NHTSA also received comments related to the level of standards for MYs 2022-2026, and the agency discusses those comments below.

NHTSA received one comment from North American Subaru, Inc. (Subaru) related to the lead time required for future model year standards, specifically asserting that the “reclassification of off- highway capable light-duty trucks is akin to a fleet stringency increase requiring at least 18-months lead time under the statute.” \668\ Subaru expressed concern that this requirement would likely not be achieved for MY 2028 implementation given the planned publication timing of this final rule.\669\ NHTSA recognizes the challenges imposed by near-term reclassification, and in consideration of public comments received from Subaru and others, and its own analysis, NHTSA is finalizing the updated vehicle classification definitions to begin in MY 2030, as discussed in more detail in Section VI.

\668\ Subaru, Docket No. NHTSA-2025-0490-0037, at 6.

\669\ Id.

EISA also requires NHTSA to “issue regulations . . . prescribing average fuel economy standards for at least 1, but not more than 5, model years.” \670\ In the 2020 final rule, NHTSA explained that it interpreted EISA's legislative history to suggest that Congress included the

five-year maximum limitation so NHTSA would issue standards for a period of time where it would have reasonably realistic estimates of market conditions, technologies, and economic practicability (i.e., not setting standards too far into the future because of potential feasibility challenges or the uncertainty surrounding future market conditions).\671\ NHTSA explained, however, that the concerns Congress sought to address by imposing those limitations are not present for nearer model years where NHTSA already has existing standards and noted that revisiting existing standards is contemplated by both 49 U.S.C. 32902(c) and 32902(g). NHTSA stated that the agency therefore believed that it is reasonable to interpret subsection 32902(b)(3)(B) as applying only to the establishment of new standards rather than to the combined action of establishing new standards and amending existing standards.

\670\ 49 U.S.C. 32902(b)(3)(B).

\671\ 85 FR 24174, 25129 (Apr. 30, 2020).

In addition, NHTSA stated that the statute allows NHTSA to revisit existing standards and separately allows NHTSA to prescribe new standards “for at least 1, but not more than 5, model years” when it “issue[s] regulations.” NHTSA also explained that the statute does not preclude multiple concurrent or quickly sequential rulemakings “issuing regulations” for different periods of time. NHTSA provided as an example that it could issue two separate rulemakings, one amending a single model year's standard and one setting new standards for the five immediately ensuing model years, but this would be an unnecessary waste of resources that could be saved by consolidating agency (and commenter) work into a single rulemaking. For these reasons, NHTSA concluded that its interpretation was reasonable and appropriate.

NHTSA stated in the NPRM that--consistent with the 2020 interpretation--the agency continued to believe that the five-year maximum applies only to rulemakings establishing new standards, and not to, as in this case, the amendment of existing standards. Unlike a situation when NHTSA must be cautious about setting new standards for distant future years, the agency proposed amending standards to rectify placing manufacturers in a situation where they violate standards set at beyond maximum feasible levels due to the consideration of factors in the analysis in a manner inconsistent with subsection 32902(h). Moreover, as in the example NHTSA provided in the 2020 final rule, NHTSA believed that the public interest in efficiency was best served by presenting amendments for all model years under consideration in one notice. NHTSA emphasized in the proposal that two separate analyses were conducted for the MYs 2022-2026 and 2027-2031 standards. It made sense, however, to seek public input on the standards in a single proceeding. In addition, the proposal was the first time that NHTSA's consideration of maximum feasible standards for all model years had appropriately excluded the subsection 32902(h) factors, meaning that it was the first time the public was able to provide comments on a fuel economy standards trajectory for the automotive fleet that appropriately includes only gasoline- and diesel-powered vehicles. Accordingly, NHTSA concluded in the NPRM that it was appropriate to present all years covered by the proposed amendments in one notice.

NHTSA received a considerable number of comments regarding its authority to issue a single rulemaking action covering a ten-year period from MYs 2022 through MY 2031. The Alliance supported the agency's approach, stating its concurrence with NHTSA that the five- year limitation on standard setting does not apply when the agency is amending existing standards.\672\ Conversely, other commenters including SELC, NACAA, NRDC et al., IPI, ZETA, the Attorneys General, Maine Department of Environmental Protection (ME DEP), ALA, and individual commenters, argued that the proposal unlawfully exceeded the agency's statutory authority by regulating ten model years in a single action, in purported conflict with the statutory limitation in subsection 32902(b)(3)(B) that restricts standard setting to “prescribing . . . standards for . . . not more than 5 model years” at a time.\673\

\672\ The Alliance, Docket No. NHTSA-2025-0491-5707-A2, at II-7.

\673\ SELC, Docket No. NHTSA-2025-0490-0035, at 3-4; NACAA, Docket No. NHTSA-2025-0491-5884, at 14; NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 24; IPI, Docket No. NHTSA-2025-0491- 6015-A2, at 91; ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 11; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 100-101; ME DEP, Docket No. NHTSA-2025-0490-0026, at 2; ALA, Docket No. NHTSA-2025-0491-5977, at 2; Will Schmidt and Juan Fernandez, Docket No. NHTSA-2025-0491-3469, at 3.

Commenters opposed to the ten-year period focused on the statutory text and the meaning of the word “prescribe.” The Attorneys General argued that the agency is impermissibly reading an exemption into the statute, noting that the statutory text creating the five-year limitation refers generally to “prescribing” standards, without distinguishing between new or amended standards.\674\ The Attorneys General also stated that “prescribe” is the exact verb Congress used to describe the actions NHTSA takes when it sets new standards under subsection 32902(a), as well as when it amends existing standards under subsections (c) and (g).\675\ ZETA and IPI echoed this analysis, asserting that subsection 32902(b)(3)(B) applies whenever NHTSA “issue[s] regulations under this title prescribing average fuel economy standards,” which “naturally” includes any proposed amendments, and that the statute draws no distinction between establishing new standards and modifying existing ones.\676\ Furthermore, the Attorneys General drew a structural comparison to subsection 32902(b)(3)(A)--the requirement for separate passenger and non-passenger standards expressed as mathematical functions--noting that it unambiguously governs both original standards and amendments, and asserting there is no reason why the scope of subsection (b)(3)(B) should be interpreted any differently.\677\ A pair of individual commenters argued that the five-year limit governs the permissible scope of any single rulemaking action, and that to hold otherwise would allow any administration to circumvent the limit simply by labeling its action an “amendment.” \678\ NRDC et al. similarly stated that NHTSA's claim that the five-year limit does not cabin its authority to amend past standards is unsupportable because NHTSA “has not, and cannot,” articulate any limiting principle.\679\ NRDC et al. also contended that under subsection (g)(1), any amended standard must independently meet the requirements of subsection (a), which implies that the temporal limitations apply equally to amendments.\680\

\674\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 100-101.

\675\ Id.

\676\ ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 11; IPI, Docket No. NHTSA-2025-0491-6015-A2, at 91-93.

\677\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 100-101.

\678\ Will Schmidt and Juan Fernandez, Docket No. NHTSA-2025- 0491-3469, at 3.

\679\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 28.

\680\ Id.

Several commenters also challenged the agency's policy and administrative rationales for issuing a ten-year rule. Although NHTSA posited that the statutory five-year cap was primarily intended to prevent the agency from forecasting market and technological conditions too far into the future,

commenters argued that Congress had other clear purposes, such as ensuring periodic reassessments as markets evolve, preventing a single administration from locking in a decade of fuel economy policy, and providing manufacturers with a predictable timeline to prepare compliance strategies.\681\ Furthermore, ZETA, IPI, and Attorneys General disagreed with NHTSA's contention that a consolidated ten-year rulemaking promotes administrative efficiency and preserves resources.\682\ These commenters also maintained that administrative convenience cannot override supposedly unambiguous statutory text, and the Attorneys General suggested that separate rulemakings for multiple five-year periods might be more efficient by allowing the public to better understand and comment on the distinct analyses required for retrospective versus prospective standards.\683\

\681\ Will Schmidt and Juan Fernandez, Docket No. NHTSA-2025- 0491-3469, at 3; Attorneys General, Docket No. NHTSA-2025-0491-6064- A2, at 100.

\682\ ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 11; IPI, Docket No. NHTSA-2025-0491-6015-A2, at 92; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 100-101.

\683\ Id.

Commenters also included, with their objections to the ten-year period, arguments against rulemaking covering past model years. NRDC et al. and IPI contended that the ten-year scope is a product of the agency's attempt to amend past standards.\684\ IPI noted that otherwise, the rule would cover only the five model years from 2027 through 2031.\685\ NACAA contended that weakening requirements to cover a ten-year period undermines the congressional design of EPCA.\686\

\684\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 29; IPI, Docket No. NHTSA-2025-0491-6015-A2, at 91-93.

\685\ IPI, Docket No. NHTSA-2025-0491-6015-A2, at 91-93.

\686\ NACAA, Docket No. NHTSA-2025-0491-5884, at 14.

NHTSA disagrees with the commenters who claim that the agency's approach conflicts with the statutory text and purpose. More specifically, NHTSA's interpretation that EPCA allows the agency to amend more than five model years of standards in this rulemaking does not implicate the statute's use of the term “prescribe.” Rather, the five-year limitation applies when NHTSA “issue[s]” new standards, as the agency explained in the 2020 final rule.\687\ But that limitation is not applicable when, under 49 U.S.C. 32902(c), the Secretary “prescribe[s] regulations amending the standard under subsection (b).” The placement of the amendatory authority in a separate subsection of section 32902, one devoid of any temporal limitation, demonstrates that Congress vested the Secretary with the power to amend more than five years of fuel economy standards in a single rulemaking. That multiple subsections use the word “prescribe” does not alter this conclusion.

\687\ 85 FR 24174, at 25129 (Apr. 30, 2020).

For the same reasons, NHTSA disagrees with the Attorneys General that, because 49 U.S.C. 32902(b)(3)(A)'s requirements for how fuel economy standards are established--“based on 1 or more vehicle attributes related to fuel economy” and “in the form of a mathematical function”--may apply both to original standards and any amendments, means that 49 U.S.C. 32902(b)(3)(B)'s temporal limitation also applies to any amendments. The amendatory authority conferred by 49 U.S.C. 32902(c) does not include any temporal limitation. As such, the plain and best reading of that subsection, and of the section 32902 as a whole, is that the agency may amend more than five years of standards in a single rulemaking.

The agency also disagrees with these comments regarding the underlying congressional intent and the administrative realities of standard setting. NHTSA examined the Congressional record around the five-year limitation prior to the 2018 NPRM, as explained in the proposal and again above, and concluded that the five-year limit “was intended to prevent NHTSA from setting standards too far into the future, recognizing that predicting the future is difficult.” \688\ This was also reflected in the Congressional record, where it was recognized that the five-year limitation “allows for reasonable and realistic estimates of market conditions, the availability of new and developing technologies, and other considerations of technological and economical practicability.” \689\ Because this combined rulemaking relies on retrospective data for the earlier years and standard prospective forecasting for the later years, it does not implicate this concern. Furthermore, as NHTSA stated in the NPRM, while the agency could satisfy the commenters' narrow reading by initiating multiple concurrent or quickly sequential rulemakings, doing so would unnecessarily waste agency resources. A single rulemaking, supported by separate analyses for the 2022-2026 and 2027-2031 standards, is the most efficient approach administratively and provides the public with a comprehensive view of the CAFE program's trajectory.

\688\ 85 FR 24174, at 25129 (Apr. 30, 2020).

\689\ See 153 Cong. Rec. 2665 (Dec. 28, 2007).

As described above, Congress recognized the importance to the economy and automotive industry of correctly balancing statutory factors to establish maximum feasible standards and was particularly cognizant of the risks presented by overly stringent standards. Congress gave NHTSA more flexibility in amending standards in light of new information--especially when necessary to reduce stringency--than in establishing new standards. Applying the five-year restriction to amendments of standards would restrict the agency's ability to correct inappropriate standards--too high or too low. b. Separate Standards for Passenger Automobiles and Non-Passenger Automobiles

EPCA requires NHTSA to set separate standards for passenger automobiles and non-passenger automobiles for each model year.\690\ Based on the plain language of the statute, NHTSA consistently has interpreted this requirement as preventing NHTSA from setting a single combined CAFE standard for passenger and non-passenger automobiles. EPCA requires separate CAFE standards for passenger and non-passenger automobiles to reflect the different fuel economy capabilities of those distinct types of vehicles; over the history of the CAFE program, this requirement has remained unchanged.

\690\ 49 U.S.C. 32902(b)(1).

Since 2012, NHTSA has at times proposed or finalized standards for passenger and non-passenger automobiles that increase at different respective rates year over year.\691\ Even if NHTSA set passenger and non-passenger automobile standards previously with the same rates of increase (i.e., percentage increase from the prior years' standard, which could, for example, increase at a rate of 2 percent for both passenger and non-passenger automobiles), the standards themselves were different because of the starting point for each fleet. This

underscores that NHTSA, in fulfilling its obligation to set maximum feasible standards separately for each fleet, is vested with the discretion to do so based on an assessment of each fleet's respective circumstances and a consideration of how the four statutory factors (technological feasibility, economic practicability, the effect of other motor vehicle standards of the Government on fuel economy, and the need of the United States to conserve energy) apply to each fleet.

\691\ See 85 FR 24174, 25186 (Apr. 30, 2020) (although the agency finalized a different set of standards, it considered and explained that net benefits appear to be maximized under the two percent/three percent alternative, which proposed to raise passenger car standards at two percent per year and light truck standards at three percent per year); 89 FR 52540, 52547 (June 24, 2024) (explaining that after consideration of relevant data and comments, an alternative that raised passenger car stringency at two percent per year and held light truck stringency at zero percent per year for two years, followed by two percent increases, was maximum feasible).

The 2007 EISA CAFE amendments required NHTSA to begin setting a separate standard for domestically manufactured passenger automobiles.\692\ Unlike the generally applicable standards for passenger and non-passenger automobiles described above, the compliance obligation of the MDPCS is identical for all manufacturers. The statute states that any manufacturer's domestically manufactured passenger car fleet must meet the greater of either 27.5 mpg on average or “92 percent of the average fuel economy projected by the Secretary for the combined domestic and non-domestic passenger automobile fleets manufactured for sale in the United States by all manufacturers in the model year, which projection shall be published in the Federal Register when the standard for that model year is promulgated in accordance with [49 U.S.C. 32902(b)].” \693\ Consistent with the statutory language stating that the 92-percent standards must be determined at the time an overall passenger car standard is promulgated and published in the Federal Register, NHTSA has also determined that it must recalculate the MDPCS when amending a passenger car standard.\694\

\692\ 49 U.S.C. 32902(b)(4). In the CAFE program, “domestically manufactured” is defined by Congress in 49 U.S.C. 32904(b). The definition roughly provides that a passenger car is “domestically manufactured” as long as at least 75 percent of the cost to the manufacturer is attributable to value added in the United States, Canada, or Mexico, unless the assembly of the vehicle is completed in Canada or Mexico and the vehicle is imported into the United States more than 30 days after the end of the model year.

\693\ 49 U.S.C. 32902(b)(4). Since Congress established the statutory requirement, “92 percent” has always been greater than 27.5 mpg and foreseeably will continue to be so in the future.

\694\ 77 FR 62624, 63028 (Oct. 15, 2012) (explaining that the agency does not read EISA as precluding “any change, ever, in the minimum standard after it is first promulgated for a model year” and that “the language of the statute suggests that the 92 percent should be determined anew any time the passenger car standards are revised”); 85 FR 24174, 25124 (Apr. 30, 2020); 87 FR 25710, 25962 (May 2, 2022).

Since the first CAFE rules establishing the MDPCS (the 2008 proposal for MYs 2011-2015 standards and the subsequent 2009 final rule for MY 2011 standards), NHTSA has interpreted “92 percent of the average fuel economy projected by the Secretary” to mean 92 percent of the average fuel economy standard projected by the Secretary.\695\ Accordingly, consistent with NHTSA's longstanding interpretation, the calculated MDPCSs presented in the proposal were based on the projected passenger automobile standards.

\695\ 74 FR 14196, 14410 (May 29, 2009) (“NHTSA calculated 92 percent of the final projected passenger car standards as the minimum standard, which for MY 2011 is 27.8.”); 75 FR 25324, 25614 (May 7, 2010); 89 FR 52540, 52792 (June 24, 2024).

The Attorneys General argued that the statute requires the MDPCS to be calculated based on the projected “achieved” average fuel economy of the combined domestic and non-domestic fleets.\696\ The Attorneys General emphasized that EPCA treats “average fuel economy” and “average fuel economy standard” as distinct defined terms, and past agency practice cannot override this clear congressional directive.\697\ The Attorneys General acknowledged that while the “projected standard” methodology was previously a reasonable proxy for projected achieved fuel economy under the agency's prior interpretation of 32902(h), NHTSA's abandonment of that interpretation caused the projected standard mpg-value and projected achieved mpg- value to diverge significantly, making the prior methodology invalid.\698\ They further argued that the statute's reference to the word “standard” in the second clause of subsection 32902(b)(4)(B) governs only the timing of the minimum standard's publication, not the underlying calculation.\699\

\696\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 101-103.

\697\ Id.

\698\ Id.

\699\ Id.

NHTSA disagrees that the statute requires the use of the projected achieved average fuel economy level to calculate the MDPCS. Although “average fuel economy” and “average fuel economy standard” are separately defined terms in 49 U.S.C. 32901, the best reading of “average fuel economy” in 49 U.S.C. 32902(b)(4)(B) is a reference to the method of calculation of “average fuel economy” specified in 49 U.S.C. 32904(a)(1)(B), where the total number of vehicles manufactured by a manufacturer in a model year is divided by the sum of fractions created by dividing each manufacturer's model's production volume by its fuel economy value. Notably, other provisions of EPCA use “average fuel economy” and “average fuel economy standard” to mean the same thing despite their separate definitions in section 32901. For example, 49 U.S.C. 32902(b)(2)(B) equates “average fuel economy” with “average fuel economy standard.” \700\ And 49 U.S.C. 32902(f) states that “When deciding maximum feasible average fuel economy under this section, the Secretary of Transportation shall consider technological feasibility, economic practicability, the effect of other motor vehicle standards of the Government on fuel economy, and the need of the United States to conserve energy” (emphasis added). Yet these four factors are the criteria to be used in deciding maximum feasible average fuel economy standards. Furthermore, UCS's proposed approach, to calculate the MDPCS pursuant to 49 U.S.C. 32904(a)(2)(B), would require NHTSA to include the fuel economy of dedicated alternative fueled vehicles. To do so would render meaningless 49 U.S.C. 32902(h)'s prohibition on considering dedicated alternative fueled vehicle fuel economy values in establishing fuel economy standards.

\700\ 49 U.S.C. 32902(b)(2)(B) (“For model years 2021 through 2030, the average fuel economy required to be attained by each fleet of passenger and non-passenger automobiles manufactured for sale in the United States shall be the maximum feasible average fuel economy standard for each fleet for that model year.”).

NHTSA also received a comment from UCS stating that the agency cannot “project” a value for the MDPCS for MYs 2022 and 2023 because it is a known quantity.\701\ UCS stated that the agency has certification data for MYs 2022 and 2023, and that MYs 2022-2026 data in its entirety may be available by the time the rule is finalized.\702\ UCS argued that the agency must amend the MDPCS with data it has on hand, “which would require setting the standard at 92 percent of the actual certification level achieved.” \703\ UCS also stated that “given that the agency cannot “project” standards for model years that have already passed, this conflicting requirement is additional evidence that Congress did not seek to grant NHTSA the authority to amend MDPCS retroactively.” \704\ An individual commenter also stated that the prior MDPCS for MY 2027 of 54.2 mpg is the absolute floor for any

standards that DOT adopts going forward.\705\

\701\ UCS, Docket No. NHTSA-2025-0491-6027-A1, at 16.

\702\ Id.

\703\ Id.

\704\ Id.

\705\ S. Sotomayor, Docket No. NHTSA-2025-0491-4888.

NHTSA disagrees with the characterization that it cannot establish the MDPCS for MYs 2022 and 2023 simply because those years have already occurred, or that it must use certification data to do so. As established in the June 2025 interpretive rule,\706\ the previous standards for these years were based on a legal interpretation that improperly included prohibited factors under 49 U.S.C. 32902(h). Correcting this error requires the agency to reconstruct a projection of the maximum feasible fuel economy standard for passenger automobiles for the years impacted by this error that have not been closed administratively, specifically excluding the influence of dedicated electric vehicles and other flexibilities.

\706\ 90 FR 24518 (June 11, 2025).

In response to UCS's comment that the agency may have a complete set of certification data to use for MYs 2022-2026 by the time this rule is finalized, that has not come to pass. While the agency does have some additional pre- and mid-model year fuel economy data, the quality and completeness of this manufacturer-submitted information could not be sufficiently verified such that the agency would rely on that data to set the MDPCS. Such preliminary data typically exhibits meaningful discrepancies when compared to final certification data, which serves as the only verified and conclusive record of actual fleet performance. Consequently, the agency believes that relying on these unverified datasets would introduce unnecessary uncertainty into the standard-setting process and would be inconsistent with the agency's practice of basing its projections on the most robust information available. In addition, for the reasons discussed below, NHTSA cannot legally maintain the prior MDPCS for MY 2027 because that value included electric vehicle fuel economy.

Consistent with NHTSA's longstanding interpretation, the finalized MDPCSs for each model year are based on the projected passenger automobile standards.

NHTSA has also calculated the finalized MDPCSs based on the gasoline- and diesel-powered vehicle fleet. NHTSA believes that doing so is required by EPCA for the reasons discussed in Section V.A.2.e, Factors that NHTSA is Prohibited from Considering, and in the June 2025 interpretive rule,\707\ as discussed in more detail below. In short, EPCA requires that fuel economy standards be established based on vehicles that run on “fuel,” as defined by the statute to include gasoline and diesel fuel.\708\ It is inconsistent with the statute's text to base the MDPCS on vehicles, specifically EVs, that are powered by an “alternative fuel” \709\ and differ fundamentally from the gasoline- and diesel-powered vehicles presupposed by EPCA.

\707\ 90 FR 24518 (June 11, 2025).

\708\ 49 U.S.C. 32901(a)(10).

\709\ 49 U.S.C. 32901(a)(1).

The Attorneys General and UCS commented on this interpretation, objecting to NHTSA's assertion that it is inconsistent with EPCA to include electric vehicles in the domestic minimum calculation.\710\ These commenters argued that EPCA does not presuppose a solely gas- and diesel-powered fleet, but rather explicitly incentivizes alternative- fueled vehicles.\711\ Lastly, they maintained that the statutory calculation fundamentally incorporates EVs and their fuel economy values and noted that subsection (b)(4) is not one of the provisions covered by 49 U.S.C. 32902(h).\712\

\710\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 102-103; UCS, Docket No. NHTSA-2025-0491-6027-A1, at 19.

\711\ Id.

\712\ Id.

NHTSA disagrees with the Attorneys General and UCS's interpretation that the absence of a cross-reference in subsection 32902(h) creates an affirmative mandate to include EVs in the domestic minimum calculation. While EPCA, as amended by AMFA, does provide incentives for alternative-fueled vehicles, these provisions were intended to provide compliance flexibilities, not to redefine the baseline for standard setting. To calculate the domestic minimum using a fleet projection that includes EV fuel economy values while the primary standard excludes them would create an internal inconsistency within the statutory framework. Such an incongruity could result in a domestic minimum “backstop” that is far more stringent than the primary standard, effectively forcing manufacturers to exceed what the agency has already determined based on permissible considerations to be a maximum feasible level.

Furthermore, NHTSA disagrees that the domestic minimum calculation can be divorced from the primary “maximum feasible” passenger car standard it is designed to support. The second clause of subsection 32902(b)(4)(B) requires the agency to publish the domestic minimum standard “when the standard for that model year is promulgated.” Because the “standard” in this clause refers to the generally applicable standards prescribed under subsection 32902(a) or (b)-- provisions that are subject to subsection 32902(h)'s exclusion of alternative fueled vehicle fuel economy for standard-setting purposes-- it follows that the domestic minimum must share the same analytical foundation. Accordingly, NHTSA has made no updates to the fleet used to calculate the domestic minimum standard for this final rule.

As in the 2020, 2022, and 2024 final rules, NHTSA continues to recognize industry concerns that actual passenger car fleet standards have differed significantly from prior projections, perhaps more so the further that NHTSA projects into the future. In the 2020 final rule, the compliance data showed that the standards projected in the 2012 final rule were consistently more stringent than the actual standards calculated at the end of the model year, by an average of -1.9 percent.\713\ NHTSA stated that this difference indicated that in rulemakings conducted in 2009 through 2012, NHTSA's and EPA's projections of passenger car vehicle footprints and production volumes underestimated the production of larger passenger cars over the MYs 2011-2018 period.\714\ Unlike the passenger car standards and light truck standards, which are vehicle-attribute-based and automatically adjust with changes in consumer demand, the MDPCS is not attribute- based, and therefore it does not adjust with changes in consumer demand and production. Instead, it is a fixed standard established at the time of the rulemaking. As a result, by assuming a smaller than actual average footprint fleet than was ultimately produced, the MYs 2011-2018 MDPCS ended up being more stringent and placed a greater burden on manufacturers of domestic passenger cars than was expected at the time of the rulemakings that established those standards.

\713\ 85 FR 24174, 25127 (Apr. 30, 2020).

\714\ Id.

In the 2020 final rule, NHTSA concurred with industry concerns over the impact of changes in consumer demand (especially when contrasted against what was assumed in the 2012 rulemaking about future consumer demand for greater fuel economy) on manufacturers' ability to comply with the MDPCS, particularly for those manufacturers that produce larger

passenger cars domestically.\715\ Some of the largest civil penalties for non-compliance in the history of the CAFE program have been paid based on non-compliance with the MDPCS.\716\ NHTSA also expressed concern in the 2020 final rule that consumer demand may shift even more in the direction of larger passenger cars if fuel prices remain low.\717\ NHTSA explained that sustained low oil prices can be expected to have real effects on consumer demand for additional fuel economy, and if that occurs, it is foreseeable that consumers may be even more interested in 2WD crossovers and passenger-car-fleet SUVs (and less interested in smaller passenger cars) than they previously had been.\718\ Therefore, to help avoid outcomes from application of the MDPCS in the MYs 2021-2026 timeframe like those observed over the preceding model years, NHTSA determined that it was reasonable and appropriate to consider the recent projection errors as part of estimating the total passenger car fleet fuel economy for MYs 2021- 2026.\719\ Thus, in the 2020 final rule, NHTSA projected the passenger car fleet fuel economy standard for each model year and applied an offset based on the historical -1.9-percent difference identified for MYs 2011-2018.\720\

\715\ Id.

\716\ See the Civil Penalties Report visualization tool at https://www.nhtsa.gov/corporate-average-fuel-economy/cafe-public-information-center for more specific information about civil penalties previously paid.

\717\ 85 FR 24174, 25127 (Apr. 30, 2020).

\718\ Id.

\719\ Id.

\720\ Id.

NHTSA continued to apply the -1.9-percent offset in calculating the MDPCS for the 2022 and 2024 final rules after additional quantitative and qualitative analysis showing the offset, and specifically the -1.9- percent value, was still appropriate and reasonable.\721\ NHTSA noted in the 2022 final rule its concern with the stringency in overall standards for MYs 2024-2026 and the statutorily required increase in CAFE civil penalty rate due to inflation adjustments as reasons why the agency should continue to employ the -1.9-percent offset, specifically if automakers struggling to meet the MDPCS would choose to import their passenger cars rather than produce them domestically.\722\ In the 2024 final rule, NHTSA retained the offset, stating all of the reasons presented previously for the offset continued to apply.\723\

\721\ 87 FR 25710, 25965-6 (May 2, 2022).

\722\ 87 FR 25710, 25965-6 (May 2, 2022).

\723\ 89 FR 52540, 52782-3 (June 24, 2024).

For this rulemaking, NHTSA reviewed the analysis used to calculate the MDPCS offset and updated the analysis to add new data sources and refine the methodology used to calculate the offset value. As described in further detail in Section III of the proposal, NHTSA averaged the relative percentage differences between CAFE Model outputs and actual compliance data for MYs 2017-2023, excluding manufacturers that only produce dedicated alternative fueled vehicles. NHTSA determined that based on this updated assessment the difference between model outputs and actual fleet data was -0.7 percent, less than half of the previously calculated value. The MYs 2027-2031 MDPCSs presented in the proposal accordingly included a recalculated -0.7-percent offset. NHTSA stated that the agency believed that the basis for the offset, the inability to project precisely the mix of vehicles sold in the future, is inapplicable to the finalized MYs 2022-2026 standards because those standards incorporated the most up-to-date data available to the agency for vehicle sales volume and footprint sizes in MY 2022. NHTSA's proposed MDPCS for MYs 2027-2031 included the offset to ensure that the standard reflects industry capabilities while still considering the original intent behind the MDPCS.

PMI commented in support of NHTSA's proposal to recalculate the MDPCS excluding electric vehicles, noting in addition that “[b]y removing the distortion of electric vehicles from the historical data, NHTSA calculates that the necessary offset has dropped from 1.9 percent to 0.7 percent.” \724\ Conversely, the Alliance urged NHTSA to reconsider its proposal to lower the offset from -1.9 percent to -0.7 percent and to restrict its application to MY 2027 and beyond.\725\ The Alliance argued that the offset should also be applied to MYs 2025 and 2026, noting that the agency's reliance on MY 2022 data do not eliminate the inherent uncertainty regarding sales volumes and footprint sizes, given that NHTSA does not have preliminary or final data for those years.\726\ Furthermore, the Alliance recommended retaining the current -1.9-percent offset and deferring any reassessment because the agency's proposed reclassification of large volumes of SUVs and minivans into the passenger car fleet will significantly impact the MDPCS and introduce broad market uncertainties that are not fully accounted for in the current methodology.\727\

\724\ PMI, Docket No. NHTSA-2025-0491-5001-A2, at 41.

\725\ The Alliance, Docket No. NHTSA-2025-0491-5707-A2, at IV-7.

\726\ Id.

\727\ Id.

In contrast, the Attorneys General commented that neither subsection (b)(4) nor section 32904 authorizes the MDPCS offset.\728\ Instead, they argued that the 8-percent difference inherently built into the 92-percent requirement is the only allowance Congress provided for consumer-driven market shifts.\729\

\728\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 102.

\729\ Id.

The agency acknowledges the Alliance's recommendation to maintain the -1.9-percent offset and to expand its application to MYs 2025 and 2026. However, NHTSA continues to believe that a -0.7-percent offset for MYs 2027 and later is the most appropriate and technically driven approach and is maintaining the -0.7-offset as proposed for this final rule. The offset is designed to mitigate the inherent uncertainty that arises when the CAFE Model projects future standards by carrying forward fixed sales volumes and footprint distributions from a baseline fleet. In contrast, for MYs 2022-2026, NHTSA was able to calibrate its analysis using a refined and technically defensible MY 2024 dataset uniquely suited for complex regulatory modeling through rigorous data- cleaning, cross-referencing, and verification exercises to enhance the fidelity of manufacturer-reported information significantly. The proximity of MY 2026 to MY 2024 ensures that any intervening shifts in sales volume or footprint size would be minimal. Consequently, the agency believes that the risk of a significant discrepancy is insufficient to warrant the application of an offset for those years.

Regarding the Attorneys General comment, NHTSA believes that the - 0.7-percent offset is a necessary and reasonable adjustment and has continued to employ this significantly reduced offset in the final rule. The offset, which NHTSA calculated with the intent to capture consumer-driven market shifts, serves a different purpose than the 8- percent difference inherently built into the 92-percent requirement, which Congress prescribed with the intent for it to serve as a backstop for domestically manufactured vehicle fuel economy values.

NHTSA presents the final MDPCSs for MYs 2022-2031 in Section III.

EPCA, as amended by EISA, requires NHTSA to set CAFE standards “based on 1 or more vehicle attributes related to fuel economy and express[ed] . . . in the form of a mathematical function.” \730\ Under attribute-based standards, every vehicle model has a fuel economy target, the levels of which depend on the level of that vehicle's determining attribute. The manufacturer's fleet average CAFE performance is calculated by the harmonic production-weighted average of those targets. This means that no vehicle is required to meet its target; instead, manufacturers are free to balance improvements however they deem best within their fleets.

\730\ 49 U.S.C. 32902(b)(3)(A).

Although CAFE standards for passenger cars and light trucks must be specified as a mathematical function dependent on one or more attributes related to fuel economy, NHTSA has the authority to select which attributes and mathematical functions. Prior to the requirement that CAFE standards be attribute-based and defined by a mathematical function, CAFE standards were instead specified as single mpg values (e.g., 27.5 mpg for passenger cars and 20.7 mpg for light trucks). Because these single-mpg standards were wholly independent of fleet composition, these requirements posed a significantly greater technical challenge for manufacturers producing more larger vehicles for the U.S. market than for manufacturers focused on smaller vehicles, because smaller vehicles achieve greater fuel economy levels generally. Therefore, because the standards are fleet-average standards, these single-mpg standards presented an inherent incentive to shift production toward smaller vehicles rather than increasing the application of fuel-saving technologies across entire fleets, meaning that fuel economy benefits would be available primarily to purchasers of smaller vehicles, rather than available broadly to consumers with a more diverse range of vehicle preferences.

In setting attribute-based standards, NHTSA has sought to reflect the trade-off (i.e., the relationship) between the attribute and fuel economy. If the mathematical function establishing the standards captures these trade-offs, every manufacturer is more likely to continue adding fuel-efficient technology across the distribution of the attribute within their fleet, instead of changing the attribute-- and other correlated attributes, including fuel economy--as part of their compliance strategy. NHTSA discusses the mathematical function establishing the standards in more detail in Final TSD Chapter 1.

Historically, NHTSA has based standards on the attribute of vehicle footprint, and the agency is continuing to do so in this final rule. As in previous rulemakings, NHTSA is defining the standards in the form of a constrained linear function that sets higher (more stringent) targets for smaller footprint vehicles and lower (less stringent) targets for larger footprint vehicles. NHTSA discusses the footprint curves in more detail in Section II and Final TSD Chapter 1. e. 35 Miles per Gallon in 2020

Subsection 32902(b)(2)(A) requires the Secretary to “prescribe a separate average fuel economy standard for passenger automobiles and a separate average fuel economy standard for non-passenger automobiles for each model year beginning with MY 2011 to achieve a combined fuel economy average for MY 2020 of at least 35 miles per gallon for the total fleet of passenger and non-passenger automobiles manufactured for sale in the United States for that model year.” \731\ In addition to this requirement, for MYs 2011-2020, standards must “increase ratably.” \732\ For MYs 2021-2030, however, “the average fuel economy required to be attained by each fleet of passenger and non-passenger automobiles manufactured for sale in the United States shall be the maximum feasible average fuel economy standard for each fleet for that model year.” \733\

\731\ 49 U.S.C. 32902(b)(2)(A).

\732\ 49 U.S.C. 32902(b)(2)(C).

\733\ 49 U.S.C. 32902(b)(2)(B).

NHTSA last discussed the 35 mpg in 2020 requirement in the 2020 final rule, where NHTSA stated that “[n]either of these requirements [referring to the 35 mpg in 2020 and increase ratably requirements] apply after MY 2020, so given that this rulemaking concerns the standards for MY 2021 and after, the NPRM stated that they are not relevant to this rulemaking.” \734\ In response to a comment from CARB saying that the 2018 proposal violated the Congressional direction to ratably increase fuel economy, NHTSA concluded that “the statutory language is clear that Congress only directed ratable increases in stringency through MY 2020. After MY 2020, the statutory language is clear that standards simply need be `maximum feasible, as determined by the Secretary.' Some commenters may have disagreed that the proposal represented maximum feasible levels, but there is no statutory basis for arguing that the `ratable increase' requirement extends beyond MY 2020.” \735\

\734\ 85 FR 24174, at 25151 (Apr. 30, 2020).

\735\ Id.

NHTSA did not discuss the 35 mpg in 2020 requirement in the proposal for this rulemaking because the proposal did not suggest amending MY 2020 standards, and as such, that statutory provision continued to be inapplicable to this rulemaking. However, several stakeholders submitted comments on that provision. The Alliance argued that NHTSA is not limited by the historical requirement to achieve 35 mpg by 2020 in setting standards for MYs 2020 and beyond.\736\ The Alliance emphasized that this specific statutory mandate applies strictly to MYs 2011-2020, and because NHTSA is not proposing to revise the previously issued standards for any of those historical model years, the 2020 requirement does not constrain the agency's current action.\737\

\736\ The Alliance, Docket No. NHTSA-2025-0491-5707-A2, at II-3.

\737\ Id.

Conversely, several commenters, including the ME DEP, NACAA, Lucid, ZETA, and other individual and public interest commenters, objected to the proposed stringency levels, arguing that among other things, they violate the express statutory mandate to require the fleet to reach 35 mpg in MY 2020.\738\ Commenters, like NACAA, emphasized that the proposed rule projects a combined fleet average of 34.5 mpg by MY 2031, which is more than a decade after the statutory deadline and 0.5-mpg below the 35-mpg level Congress required for 2020.\739\ Other commenters, like ZETA, asserted that NHTSA's failure to acknowledge this statutory requirement in the proposal is arbitrary and capricious.\740\ ME DEP and other commenters argued that decreasing standards below this mandated threshold contravenes the stated goals of EISA and moves the United States toward greater gasoline dependency, which purportedly will result in higher consumer costs, increased GHG production, and poorer energy

performance.\741\ Commenters also argued that falling below the 2020 mandate cannot be squared with the agency's ongoing obligation to establish “maximum feasible” standards.\742\ Lucid contended that EISA required the standards to achieve at least 35 mpg by 2020 and then increase to the maximum feasible standard in subsequent years.\743\ Commenters disagreed with NHTSA that the 34.5-mpg target for 2031 was “maximum feasible,” particularly given that the target is lower than the industry's real-world performance in 2024.\744\

\738\ ME DEP, Docket No. NHTSA-2025-0490-0026, at 2; NACAA, Docket No. NHTSA-2025-0491-5884, at 2, 13-14; Lucid, Docket No. NHTSA-2025-0491-6043, at 7; ZETA, Docket No. NHTSA-2025-0491-6039- A1, at 11; ALA, Docket No. NHTSA-2025-0491-5977, at 2; Anonymous, Docket No. NHTSA-2025-0491-5040.

\739\ NACAA, Docket No. NHTSA-2025-0491-5884, at 13.

\740\ ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 11.

\741\ ME DEP, Docket No. NHTSA-2025-0490-0026, at 2.

\742\ Anonymous, Docket No. NHTSA-2025-0491-5040.

\743\ Lucid, Docket No. NHTSA-2025-0491-6043, at 7.

\744\ Congresswoman Doris Matsui et al., Docket No. NHTSA-2025- 0491-6065, at 1; Save the Sound, Docket No. NHTSA-2025-0490-0060, at 3; ALA, Docket No. NHTSA-2025-0491-5977, at 2.

The agency recognizes the Alliance's concurrence with NHTSA's interpretation articulated in the 2020 final rule that the specific 35- mpg mandate set forth in 49 U.S.C. 32902(b)(2)(A) was a time-limited directive applicable to the period beginning with MY 2011 and ending with MY 2020. For subsequent years, including the 2022 through 2031 period addressed in this rulemaking, Congress provided a different instruction in subsection 32902(b)(2)(B), requiring that standards be set at the maximum feasible average fuel economy level for each model year. The agency does not interpret the mandate specific to MY 2020 as establishing a permanent statutory floor that precludes the agency from ever setting a standard below that level, if in applying the four statutory factors--for example, accounting for changed circumstances such as vehicle prices under economic practicability or the United States' status as a net petroleum exporter under the need of the United States to conserve energy--and the restrictions of subsection 32902(h) the agency concludes that a different result is more appropriate. In addition, as NHTSA recognized in its notice proposing to grant several low volume manufacturers' petitions for exemption from the industry- wide CAFE standards,\745\ by virtue of creating a corporate average program, that is, one where manufacturers need not comply with individual vehicle models but with their fleet as a whole, Congress accounted for the concept that a manufacturer's fuel economy performance could fluctuate yearly based not only on changes in the fuel economy of each of its models, but also based on changes in the production volumes of those models. There may be situations in which a manufacturer makes no changes to the fuel economy of any of its models from one year to the next, but its fleet average decreases because of changes in the production volumes of the individual vehicle models it produces. This may occur even when a manufacturer makes improvements in the fuel economy of one or more individual vehicle models from one year to the next. Congress also articulated when it did want the agency to increase the standards ratably over a period of time,\746\ but did not do so for the period of model years covered by this rulemaking,\747\ again deferring to the agency to set standards at maximum feasible levels.\748\ Accordingly, NHTSA preliminarily determined in the proposal that the 34.5-mpg projection for 2031 reflected a standard that is maximum feasible for a vehicle fleet powered exclusively by petroleum-fueled, internal combustion engine vehicles without the benefit of credit trading or alternative-fuel accounting.

\745\ 87 FR 39439, 39443 (July 1, 2022).

\746\ 49 U.S.C. 32902(b)(2)(C).

\747\ 49 U.S.C. 32902(b)(2)(B).

\748\ Id.

One individual commenter stated that CAFE standards should stop increasing after MY 2030, as the statutory mandate to promulgate the “maximum feasible” CAFE standard remains, but it becomes far more open-ended after the requirement to “increase” standards ends.\749\ The commenter stated that “given that the U.S. does not have energy conservation needs that would require such a tightening of fuel standards, there is no reason to keep raising the CAFE standard. There have been many past years when NHTSA has not raised standards; it is not statutorily required, and given both the regulatory ambition of recent decades and the fact that any Congressional mandate toward greater stringency is set to expire, NHTSA should give both consumers and industry much- needed relief by halting any increases after Model Year 2030 at the latest.” \750\

\749\ Diana Furchtgott-Roth, Docket No. NHTSA-2025-0491-5765-A1, at 15.

\750\ Id.

NHTSA appreciates this commenter's statutory interpretation and believes that the agency's current approach of resetting standards beginning in MY 2022 in a manner that comports with the statute will provide necessary relief to the industry and consumers. Although the commenter notes that the specific mandate to increase standards for previous model years has passed, the agency remains under a statutory obligation to set average fuel economy standards at the maximum feasible level for each model year. Doing so requires an updated evaluation of factors in every rulemaking, and while this rulemaking increases stringency every year, the statute does not mandate increases in stringency for every rulemaking. NHTSA discusses this evaluation in more detail in Section V.C, below. 2. Maximum Feasible Standards

As discussed, EPCA directs NHTSA to consider four factors in determining what levels of CAFE standards would be maximum feasible.\751\ In the sections below, NHTSA addresses those four factors, in addition to other statutory requirements the agency must consider.

\751\ 49 U.S.C. 32902(f).

Under EPCA, “[t]echnological feasibility” refers to whether a particular method of improving fuel economy is available for deployment in commercial application in the model year for which a standard is being established. NHTSA is not required to account for every technology that might conceivably be applied to improve fuel economy and has considered it unnecessary to do so given that many technologies address fuel economy in similar ways. It is also important to note that technological feasibility and economic practicability (addressed separately below) are often conflated. The question of whether a fuel- economy-improving technology does or will exist (technological feasibility) is a different question from what economic consequences could ensue if NHTSA requires that technology to become widespread in the fleet in the absence of sufficient consumer demand for such technologies (economic practicability). Accordingly, it is conceivable that a standard may be technologically feasible but still beyond the level that NHTSA determines to be maximum feasible due to consideration of economic practicability and the other factors.

NHTSA has long rejected interpretations of the technological feasibility factor that would require NHTSA to set “technology- forcing” standards. NHTSA has recognized that “[i]t is important to remember that technological feasibility must also be balanced with the other of the four statutory factors. Thus, while `technological feasibility' can drive standards higher by assuming the use of technologies that are not yet commercial, `maximum feasible' is still

also defined in terms of economic practicability, for example, which might caution the agency against basing standards (even fairly distant future standards) entirely on such technologies” (emphasis original).\752\ NHTSA has also concluded that “as the `maximum feasible' balancing may vary depending on the circumstances at hand for the model years in which the standards are set, the extent to which technological feasibility is simply met or plays a more dynamic role may also shift.” \753\

\752\ 77 FR 62624, 63015 (Oct. 15, 2012).

\753\ Id.

NHTSA continues to believe that the crucial question on technological feasibility is not whether technologies exist, but rather how much existing technology should be required to be added to new cars and trucks to conserve fuel, and how to balance any additional fuel conserved against the additional cost the mileage requirements will impose on new vehicles. NHTSA has applied this interpretation of technological feasibility over the course of multiple rulemakings.\754\

\754\ Id.; see also 75 FR 25324, 25605 (May 7, 2010).

The agency received a variety of comments regarding its interpretation and application of the technological feasibility factor. The American Fuel & Petrochemical Manufacturers (AFPM) expressed support for the agency's interpretation of technological feasibility, agreeing that the statutory factor refers to the level of fuel economy actually achievable by applying available or reasonably anticipated technologies, rather than what is merely theoretically possible.\755\ AFPM agreed with the agency's position that NHTSA is not required to consider every possible technology when determining feasibility.\756\ Instead, AFPM asserted that the agency must take a holistic, practical approach that balances fuel-saving options against economic practicability, other motor vehicle standards, and the Nation's need to conserve energy, rather than simply mandating that all vehicles use a specific technology.\757\

\755\ AFPM, Docket No. NHTSA-2025-0491-5964-A2, at 7.

\756\ Id.

\757\ Id.

Other commenters, including ZETA, NRDC et al., Attorneys General, NACAA, and IPI, objected to the agency's interpretation and application of this factor. First, several commenters argued that the agency impermissibly conflated technological feasibility with economic practicability by improperly introducing cost considerations into what should be an independent engineering assessment. The Attorneys General argued that the ordinary meaning of “technological feasibility” calls for a straightforward evaluation of whether a given vehicle technology will improve fuel economy, and that the cost of installing such technology must be considered separately under economic practicability.\758\ Similarly, NRDC et al. stated that the agency is internally inconsistent and incorrect in asserting that the “crucial question” is how much existing technology should be required.\759\ Rather, NRDC et al. argued that the agency should focus its review on whether the fuel-saving technology is available for commercial deployment and that because the agency's own analysis demonstrates that more stringent standards are feasible using existing technologies, this factor should weigh in favor of stronger standards.\760\ ZETA echoed that the agency improperly conflated this factor with economic practicability.\761\

\758\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 57.

\759\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 65.

\760\ Id.

\761\ ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 5.

Second, commenters asserted that the agency's interpretation abandons the purported “technology-forcing” purpose of EPCA. ZETA and the Attorneys General argued that Congress designed fuel economy standards to compel technological development because market forces alone are insufficient to achieve necessary national energy conservation.\762\ They contended that the proposed standards would not materially increase for ten years, relying only on existing technologies and lacking technology-forcing effect.\763\ IPI similarly urged the agency to interpret the statute as requiring the “use of all feasible methods” to encourage the industry to develop new technologies beyond what the market would produce organically.\764\

\762\ ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 5; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 57.

\763\ Id.

\764\ IPI, Docket No. NHTSA-2025-0491-6015-A2, at 5.

Third, commenters criticized the agency for purportedly limiting the scope of its technology assessment. NACAA urged the agency to conduct a comprehensive assessment of all proven fuel-saving technologies--including advanced internal combustion engines, mass reduction, aerodynamic improvements, and hybridization/ electrification--arguing that they must be included regardless of whether consumers actively demand them.\765\ NACAA stated that excluding proven technologies artificially limits apparent feasibility and results in standards below the “maximum feasible” level.\766\ Furthermore, ZETA and the Attorneys General objected to the agency's assertion that it need not account for every technology simply because many address fuel economy in “similar ways.” \767\ They argued this justification is arbitrary because it fails to define “similar ways” and ignores significant cost differences among technologies.\768\ The Attorneys General also noted that the agency's exclusive focus on technologies “already being commercially applied” constitutes an unexplained departure from past rulemakings, which evaluated all types of technologies capable of improving real-world fuel economy.\769\

\765\ NACAA, Docket No. NHTSA-2025-0491-5884, at 13.

\766\ Id.

\767\ ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 5; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 58.

\768\ Id.

\769\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 57-58.

NHTSA notes that several commenters appear to have misunderstood the agency's discussion regarding the crucial question to be addressed when evaluating the technological feasibility factor. The agency disagrees with the characterization that this discussion represented a new or restrictive statutory interpretation of the technological feasibility factor itself. Instead, this discussion was intended as supplemental framing to address the practical reality that standard setting involves complex policy considerations. This framing recognizes that while a specific technology might be available in an engineering sense, the agency must still determine the appropriate degree to which that technology is sufficiently mature and developed to be deployed across the fleet to achieve a fuel economy standard during the rulemaking period.

This contextualization does not change the underlying application of the technological feasibility factor, which continues to involve an assessment of whether a given technology is available for commercial deployment or reasonably expected to be available during the rulemaking period. The agency continues to perform robust engineering analysis to identify proven fuel-saving technologies, including all technologies that NACAA listed in their

comment,\770\ with the exception of electrification or other alternative fuel technologies that NHTSA is prohibited by statute from considering. However, the mere existence of feasible advanced technologies does not and cannot mandate that NHTSA set standards maximizing their application in the fleet, because the agency's obligation is to balance competing statutory factors to set maximum feasible standards in light of existing and expected circumstances. For example, even if a given technological pathway may be feasible, the statutory mandate that NHTSA consider economic practicability in setting standards requires that the agency evaluate cost ramifications and manufacturer refresh and redesign cycles to determine whether standards that tend toward implementation of that pathway would be appropriate in a rulemaking. By clarifying that technological feasibility does not require the agency to set technology-forcing standards, NHTSA is simply acknowledging the multi-factored balancing mandated by Congress. This is quite different than some regulatory schemes, generally in the environmental space, that require agencies to maximize stringency to the point technologically feasible.\771\ Unlike such regulatory schemes, EPCA requires NHTSA to take a balanced approach, with feasible technological possibilities representing just one factor to be weighed against others, including economic and energy- related factors that may counsel toward greater or lesser stringency depending upon the circumstances.

\770\ NACAA, Docket No. NHTSA-2025-0491-5884, at 13.

\771\ See, e.g., California Assembly Bill 32 of 2006, which mandated that “[t]he regulations adopted by the [California Air Resources Board] pursuant to this section shall achieve the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions from those sources or categories of sources, in furtherance of achieving the statewide greenhouse gas emissions limit.” See also California Assembly Bill 1493 of 2002, which provided that “the [California Air Resources Board] shall develop and adopt regulations that achieve the maximum feasible and cost- effective reduction of greenhouse gas emissions from motor vehicles.” These environmental regulatory schemes, which drive California's climate agenda still today, vary greatly from the CAFE program.

Regarding comments on the agency's alleged duty to set technology- forcing standards, NHTSA notes that those comments were previously addressed in the 2012 and 2020 final rules,\772\ and have since been incorporated in NHTSA's interpretation of the technological feasibility factor in every subsequent rulemaking. NHTSA's interpretation of the statute has not changed.

\772\ 77 FR at 63015 (“It is important to remember that technological feasibility must also be balanced with the other of the four statutory factors. Thus, while `technological feasibility' can drive standards higher by assuming the use of technologies that are not yet commercial, `maximum feasible' is also defined in terms of economic practicability, for example, which might caution the agency against basing standards (even fairly distant standards) entirely on such technologies.”); 85 FR at 25130-1 (citing 77 FR 63015 (“Contrary to the assertion by several commenters that NHTSA has historically claimed that it must set technology-forcing standards, NHTSA has previously described the technological feasibility factor as allowing the agency to set standards that force the development and application of new fuel-efficient technologies.”)).

NHTSA also disagrees with commenters that the agency limited the scope of technologies considered in this rulemaking, and that the agency's technology assessment represents an unexplained departure from prior assessments. NHTSA has long maintained--specifically in response to identical comments--that the agency need not account for every conceivable fuel economy technology in its analysis.\773\ In the 2020, 2022, and 2024 final rules, NHTSA used the example of high-speed flywheels as potential energy storage devices for hybrid vehicles: “while such flywheels have been demonstrated in the laboratory and even tested in concept vehicles, commercially available hybrid vehicles currently known to NHTSA use chemical batteries as energy storage devices, and the agency has considered a range of hybrid vehicle technologies that do so.” \774\ NHTSA provided additional examples in the 2020 final rule in response to comment, including an example where one entirely speculative set of engine technologies was not modeled because proven combinations of technologies existed that provided similar fuel economy improvements.\775\ NHTSA did not receive comments on the same interpretation in the 2022 or 2024 final rules.

\773\ 85 FR 24174, at 25130.

\774\ See, e.g., 85 FR 24174, at 25130.

\775\ 85 FR 24174, at 25130-1 (“In response to commenters' apparent confusion regarding NHTSA's statement that it did not consider technologies that improved fuel economy in `similar ways' as other technologies discussed in the NPRM, the meaning behind that statement was discussed at greater length in the section of the NPRM that substantively covered those technologies. For example, in discussing the `HCR2' technology, the agencies explained that while the agencies were not modeling HCR2 expressly due to concerns that it remained `entirely speculative,' `[t]he CAFE model allows for incremental improvement over existing HCR1 technologies with the addition of improved accessory devices (IACC), a technology that is available to be applied on many baseline MY 2016 vehicles with HCR1 engines and may be applied as part of a pathway of compliance to further improve the effectiveness of existing HCR1 engines.' In this and in other instances, technologies included in the analysis improved fuel economy in similar ways to other technologies not included. Here, HCR1, when combined with IACC, results in `a step past' HCR1, which is similar to the unproven HCR2.”).

The 2024 final rule and the 2025 proposal also discussed different technologies that improve fuel economy in similar ways in the context of technology effectiveness modeling. NHTSA provided the example that both turbocharging and cylinder deactivation technology improve fuel economy by reducing engine displacement and therefore using less fuel.\776\ In contrast to the high-speed flywheel example, which represented a technology that the agency determined was better represented by a range of other types of hybrid technologies not merely in a laboratory or concept stage, NHTSA has continued to model several levels of turbocharging and cylinder deactivation technologies because both are prevalent in the fleet currently and are expected to continue to be in use or available for application on additional vehicles in the rulemaking timeframe.

\776\ 89 FR at 25601 (“Turbocharging allows a larger naturally aspirated engine to be reduced in size or displacement while still doing the same amount of work, and its fuel efficiency improvements are, in part, due to the reduced displacement. DEAC effectively makes an engine with a particular displacement intermittently offer some of the fuel economy benefits of a smaller-displacement engine by deactivating cylinders when the work demand does not require the full engine displacement and reactivating them as-needed to meet higher work demands; the greater the displacement of the deactivated cylinders, the greater the fuel economy benefit.”).

NHTSA also exercises deliberate caution when expanding the suite of technologies included in its modeling, as each addition to the CAFE Model's technology pathways creates a substantial increase in computational complexity. As the agency has previously detailed, incorporating one singular additional technology option necessitates approximately 100,000 additional physics-based full-vehicle simulations through the Autonomie tool. As an example, adding ten technologies would effectively double the analytical workload to roughly two million simulations. Despite this necessary selectivity, the agency's existing technology tree remains remarkably comprehensive, featuring nearly thirty variants of advanced internal combustion and hybrid powertrain configurations, as well as multiple tiers of advanced transmissions and road load reduction levels. By iterating these options across ten distinct technology classes, the agency's assessment evaluates an expansive matrix of current and projected vehicle technology combinations. Although NHTSA remains open to incorporating

additional technologies based on public comment, the agency and commenters have yet to identify a “silver bullet” gasoline or diesel technology--including those in the research phase--that demonstrates a cost or effectiveness advantage over the robust set of technologies already utilized in the agency's analysis.

NHTSA addresses additional comments on how the agency balanced technological feasibility in determining the final standards below. b. Economic Practicability

NHTSA has long interpreted “[e]conomic practicability” to focus on whether a standard is one “within the financial capability of the industry, but not so stringent as to” lead to “adverse economic consequences, such as a significant loss of jobs or the unreasonable elimination of consumer choice.” \777\ In evaluating economic practicability, the agency considers the uncertainty surrounding future market conditions and consumer demand for fuel economy alongside consumer demand for other vehicle attributes. NHTSA has explained in the past that this factor can be especially important during rulemakings in which the auto industry is facing significantly adverse economic conditions, with a corresponding risk of significant job losses. Consumer acceptability is also a major component of economic practicability,\778\ which can involve consideration of anticipated consumer responses not just to increased vehicle cost, but also to the way manufacturers may change vehicle models and vehicle sales mix in response to CAFE standards. In attempting to determine the economic practicability of attribute-based standards, NHTSA considers a wide variety of elements, including the annual rate at which manufacturers can increase the percentage of their fleet that employs a particular type of fuel-saving technology, as well as manufacturer fleet mixes. NHTSA also considers the effects on consumer affordability resulting from costs to comply with the standards and consumers' valuation of fuel economy, among other things.

\777\ 67 FR 77015, 77021 (Dec. 16, 2002).

\778\ See Ctr. for Auto Safety v. NHTSA, 793 F.2d 1322 (D.C. Cir. 1986) (Administrator's consideration of market demand as component of economic practicability found to be reasonable); see also Public Citizen v. NHTSA, 848 F.2d 256 (D.C. Cir. 1988) (Congress established broad guidelines in the fuel economy statute; agency's decision to set lower standards was a reasonable accommodation of conflicting policies).

NHTSA's consideration of economic practicability involves several elements. These include expected availability of capital to make investments in new technologies and production facilities; manufacturers' expected ability to sell vehicles with certain technologies; likely consumer choices; and other elements. NHTSA's analysis also incorporates assumptions to capture aspects of consumer preferences, vehicle attributes, safety, and other elements relevant to an impacts estimate. The agency accounts for safety as closely related to, and in some circumstances a subcomponent of, economic practicability. Because manufacturers have finite resources to invest in research and development, investment into the development and implementation of fuel-saving technology necessarily comes at the expense of investing in other areas, such as safety technology. Moreover, when making decisions on how to equip vehicles, manufacturers must balance cost considerations to avoid pricing more consumers out of the market. As manufacturers add technology to increase fuel efficiency, they may decide against installing additional safety equipment to reduce cost increases. As the prices of new vehicles increase beyond the reach of more consumers, these consumers continue to drive or purchase older, less safe used vehicles. In assessing economic practicability, NHTSA thus also considers the harm to the U.S. economy caused by highway fatalities and injuries.

The agency received a variety of comments regarding its interpretation and application of “economic practicability.” Commenters supporting the agency's approach, including the AmFree and Corn Growers Associations and one individual commenter, agreed that the economic practicability analysis must account properly for vehicle affordability and consumer choice.\779\ AmFree and Corn Growers Associations contended that a standard is not practicable if it causes adverse economic consequences like the unreasonable elimination of buyer choice.\780\ From the supplier perspective, MEMA urged the agency to take a measured approach that provides regulatory stability, requesting that NHTSA account for the economic practicability of stranded investments and warning that uncertainty could limit U.S.- based research and development.\781\

\779\ AmFree and Corn Growers Associations, Docket No. NHTSA- 2025-0491-6000-A1, at 7; Diana Furchtgott-Roth, Docket No. NHTSA- 2025-0491-5765-A1, at 8-11.

\780\ AmFree and Corn Growers Associations, Docket No. NHTSA- 2025-0491-6000-A1, at 7.

\781\ MEMA, Docket No. NHTSA-2025-0491-5989, at 4.

Conversely, commenters including NRDC et al., IPI, ZETA, and the Attorneys General, opposed the agency's interpretation, arguing that it unlawfully subordinates the statute's goal of energy conservation to consumer preference and upfront costs.\782\ NRDC et al. argued that the agency inexplicably departed from its historical framing--which evaluated whether standards were within the industry's financial capability without causing substantial hardship--in favor of an approach that attempts to correct “market distortions,” to provide automakers with improper relief for past investments, and to preserve the ability for manufacturers to focus on non-fuel efficiency related issues, such as safety, affordability, and consumer choice.\783\ These commenters cited the D.C. Circuit's decision in Center for Auto Safety v. NHTSA, arguing that it is impermissible for the agency to rely on consumer demand to such an extent that it ignores the overarching goal of fuel conservation.\784\ IPI and the Attorneys General also stated that NHTSA arbitrarily prioritized reducing upfront vehicle costs over substantial long-term fuel savings.\785\

\782\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 46; IPI, Docket No. NHTSA-2025-0491-6015-A2, at 5-6; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 62; ZETA, Docket No. NHTSA- 2025-0491-6039-A1, at 3.

\783\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 47.

\784\ IPI, Docket No. NHTSA-2025-0491-6015-A2, at 6; ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 5; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 59-60.

\785\ IPI, Docket No. NHTSA-2025-0491-6015-A2, at 6; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 62.

NRDC et al., ZETA, and the Attorneys General also opposed the classification of safety under economic practicability, arguing it lacks a statutory basis and departs from prior agency practice.\786\ NRDC et al. argued that safety considerations, while a legitimate priority, are not appropriately part of the agency's economic practicability calculus. The Attorneys General noted that Congress already specified the precise and limited role safety should play in standard setting under subsection (f), which requires the agency to consider only whether separately adopted safety regulations limit the fuel economy improvements automakers could apply.\787\ Both commenters contended that by elevating safety in this manner, the agency unlawfully substituted a non-statutory goal in place of the statute's express

objective to maximize fuel economy.\788\ NRDC et al. also argued that NHTSA incorrectly relied on the court's statement in Competitive Enterprise Institute v. NHTSA to justify its consideration of safety as a subcomponent of economic practicability, when the court merely recognized that NHTSA had historically considered safety in some form when setting CAFE standards.\789\ ZETA commented that NHTSA had not provided support for the assertion that there is a tradeoff between investing in safety and fuel economy, and further that it is not necessarily true that is the case.\790\

\786\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 81; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 91.

\787\ Id.

\788\ Id.

\789\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 81.

\790\ ZETA, Docket No. NHTSA-2025-0491-6039-A1, at 5.

NHTSA has considered the comments regarding its interpretation and application of the economic practicability factor and continues to believe that its approach is consistent with its long-standing statutory authority and the specific statutory goals. NHTSA disagrees with the characterization that the agency has elevated improperly vehicle affordability and consumer choice over the objective of energy conservation. The agency's approach to setting these standards remains not only well within the bounds of the D.C. Circuit's decision in Center for Auto Safety v. NHTSA,\791\ but these elements also represent key components of the factor. Although the agency may not rely on consumer demand to the extent that it ignores fuel conservation, Congress tasked NHTSA with consideration of all enumerated factors in setting maximum feasible standards. A standard that results in severe economic disruption or makes vehicles unaffordable for a significant segment of the population cannot be considered economically practicable, even if technological pathways exist that make it possible to produce a fleet that complies with the standard. NHTSA must ensure that its standards do not result in serious market distortion, including situations where consumers are unable to find vehicles that meet their functional needs or where the cost of compliance results in price increases that would force consumers out of the market or force manufacturers to restrict essential investments in critical areas, including safety.

\791\ See, e.g., Ctr. for Auto Safety v. Nat'l Highway Traffic Safety Admin., 793 F.2d 1322, 1340 (D.C. Cir. 1986). The court determined, independent from NHTSA's own analysis, that “a standard with harsh economic consequences for the auto industry also would represent an unreasonable balancing of EPCA's policies.”

NHTSA disputes the assertion that the agency has departed from its historical framing of economic practicability and notes that the financial capability of the industry has always been a core component of this analysis.\792\ Evaluating whether a standard causes substantial hardship involves an assessment of the market environment in which manufacturers operate, in addition to accounting for stranded investments and the need for regulatory stability, as noted by MEMA. NHTSA's analysis accounts for the concepts of vehicle technology investments quantitatively by assuming specific refresh and redesign years for specific vehicle models and shared technologies across vehicle models, as discussed in more detail above, and the agency also discusses in this section other factors related to stranded investments.

\792\ See, e.g., 85 FR 24174, 24213-14 (April 30, 2020) (“ `Economic practicability' refers to whether a standard is one `within the financial capability of the industry, but not so stringent as to' lead to `adverse economic consequences, such as a significant loss of jobs or the unreasonable elimination of consumer choice.' ” (emphasis added) (citing to the same text in 67 FR 77015, 77021 (Dec. 16, 2002))).

By ensuring that standards are set at levels that allow for the orderly application of technology and of U.S.-based research and development, the agency avoids creating the very hardships that the economic practicability factor was intended to prevent. NHTSA does not view its consideration of upfront vehicle costs as an arbitrary prioritization over long-term fuel savings, but rather as a necessary recognition of the budget constraints faced by many American households. If the upfront cost of fuel-efficient technology, combined with associated increased costs of insurance, taxes, and fees prevents a consumer from purchasing a new, more efficient vehicle, the projected long-term fuel savings and safety benefits of that vehicle--which accrue across multiple owners over a modeled 30-year period--will never be realized in the real-world fleet. The agency remains committed to energy conservation and believes that its current interpretation of economic practicability provides the most robust framework for achieving meaningful, long-term improvements in the fuel economy of the Nation's passenger car and light truck fleet in a way that comports with statutory legal restrictions while maintaining a healthy and competitive automotive market.

The agency also disagrees with the assertion that considering safety in this context lacks a statutory basis or unlawfully substitutes a non-statutory goal for the objective of energy conservation. While subsection 32902(f) explicitly directs the agency to consider the effects of other Federal motor vehicle standards, such as safety regulations, on fuel economy, this does not preclude the agency from considering the inherent relationship between fuel economy and vehicle safety under the broader umbrella of economic practicability. NHTSA maintains that the standard is not economically practicable if it forces a technological trade-off that compromises public safety or restricts manufacturer's ability to continue innovating in safety-critical areas.\793\ Safety is not a competing interest to be balanced against fuel economy, but rather an integral component of the manufacturing and design process that dictates what is practically achievable for manufacturers.

\793\ See, e.g., 90 FR 56438, at 56517 (“Safety trade-offs associated with MR have occurred in the past, particularly before standards were attribute-based, because manufacturers chose, in response to standards, to build smaller and lighter vehicles; these smaller, lighter vehicles did not fare as well in crashes as larger, heavier vehicles, on average. Though NHTSA now uses attribute-based standards, in part to reduce or eliminate the incentive to downsize vehicles to comply with the standards, NHTSA is mindful of the possibility of related safety trade-offs.”).

Finally, in response to comments suggesting that the agency incorrectly relied on Competitive Enterprise Institute v. NHTSA to assess safety elements under the economic practicability factor, NHTSA clarifies that it did not rely explicitly on that case as the sole legal justification for its interpretation. Although the court in that case did recognize that NHTSA has historically considered safety when setting standards, the agency's authority to do so is derived directly from the statutory directive to consider the economic practicability of any proposed fuel economy level. “Economic practicability” encompasses the safety implications of fuel economy standards because a standard that leads to increased fatalities or injuries would impose significant societal and economic costs that the agency should and does consider in its decision-making.

NHTSA discusses additional comments related to how the agency balanced economic practicability in setting the final standards below.

The effect of other motor vehicle standards of the Government on fuel economy involves analysis of the effects of compliance with emission, safety, noise, or damageability standards on fuel economy capability and thus on average fuel economy. From the CAFE program's earliest years until recently,\794\ the effects of compliance with such standards on fuel economy capability over the history of the CAFE program have been negative ones. For example, safety standards that have the effect of increasing vehicle weight typically lower fuel economy capability, thus decreasing the level of average fuel economy that NHTSA can determine to be feasible. For recent CAFE analyses, including the analysis accompanying these final standards, NHTSA has captured the added weight due to safety standards in baseline vehicle mass estimates. There are no safety standards with compliance dates within the time period of this action expected to impose further effects on light-duty vehicle mass. NHTSA had also previously considered EPA's motor vehicle emissions standards set pursuant to the CAA when both agencies had set separate yet related standards in joint rules. However, this final rule does not incorporate any non-criteria emissions standards due to EPA's rescission of its Endangerment Finding and all resulting GHG emissions standards for light-, medium-, and heavy-duty vehicles and engines.\795\

\794\ 42 FR 63184, 63188 (Dec. 15, 1977); see 42 FR 33534, 33537 (June 30, 1977).

\795\ 90 FR 36288 (Aug. 1, 2025).

In the proposal and June 2025 interpretive rule NHTSA also elaborated the agency's approach to standards set by the California Air Resources Board (CARB).\796\ Regardless of whether NHTSA explicitly considered those standards previously as “other motor vehicle standards of the Government” or otherwise, NHTSA now explicitly rejects such consideration. For the reasons explained in the proposal and reiterated in this section, CARB's standards are not “other motor vehicle standards of the Government on fuel economy.”

\796\ 90 FR 24518 (June 11, 2025).

NHTSA stated in the proposal that the agency believed that the best interpretation of the text of EPCA rebuts the conclusion that CARB's standards appropriately are considered under this subsection 32902(f) factor. As a threshold textual matter, statutory references to “the Government” are most naturally understood to denote the United States Federal Government, rather than other governments, including State governments. EPCA uses the singular “the Government,” which refers to the Federal Government, consistent with the 1994 recodification discussed below. This reference likely reflects that only the Federal Government has authority to set standards “on fuel economy,” as EPCA itself provides. Therefore, even if California were held to have authority to set vehicle emission standards pursuant to a waiver under the CAA, for purposes of the maximum feasibility determination, such standards should not be considered because they are not standards of “the Government,” as that term is used in EPCA. Congress easily could have referred to standards set by “a government” if it sought to authorize NHTSA to consider State standards in the maximum feasible determination. Congress did not do so.

NHTSA also described in the proposal how EPCA's history buttresses the plain meaning of the text. As initially passed in 1975, EPCA mandated average fuel economy standards for passenger cars beginning with MY 1978. The law required the Secretary of Transportation to establish, through regulation, maximum feasible fuel economy standards for MYs 1981-1984 with the intent to provide steady increases to achieve the standard established for 1985 and thereafter authorized the Secretary to adjust that standard. For the statutorily established standards for MYs 1978-1980, EPCA provided each manufacturer with the right to petition for changes in the fuel economy standards applicable to that manufacturer, based on the application of other Federal standards.\797\ A petitioning manufacturer had the burden of demonstrating that a “Federal fuel economy standards reduction” was likely to exist for that manufacturer in one or more of those model years and that it had made reasonable technology choices. “Federal standards,” for that limited purpose, included not only safety standards, noise emission standards, property loss reduction standards, and emission standards issued under various Federal statutes, but also “emissions standards applicable by reason of section 209(b) of [the CAA].” Critically, all definitions, processes, and required findings regarding a Federal fuel economy standards reduction were located within a single self-contained subsection of 15 U.S.C. 2002, which applied only to MYs 1978-1980.\798\

\797\ Public Law 94-163, 89 Stat. 871 (Dec. 22, 1975).

\798\ As originally enacted as part of Public Law 94-163, that subsection was designated as sec. 502(d) of the Motor Vehicle Information and Cost Savings Act.

In 1994, Congress recodified several laws related to transportation. As part of this recodification, the CAFE provisions were moved to title 49 of the United States Code. In doing so, unnecessary provisions were deleted. Specifically, the recodification eliminated subsection (d). The House report describing the recodification declared that the subdivision was already “executed,” and described its purpose as “[p]rovid[ing] for modification of average fuel economy standards for MYs 1978, 1979, and 1980.” \799\ It is generally presumed, when Congress includes text in one section and not in another, that Congress knew what it was doing and made the decision deliberately. As part of the same recodification, the relevant language now found at 49 U.S.C. 32902(f) changed from “effect of other Federal motor vehicle standards on fuel economy” to “effect of other motor vehicle standards of the Government on fuel economy” (emphasis added).\800\ The Senate report accompanying the legislation clarified that “`United States Government' is substituted for `United States' (when used in referring to the Government), `Federal Government', and other terms identifying the Government the first time the reference appears in a section. Thereafter, in the same section, `Government' is used unless the context requires the complete term to be used to avoid confusion with other governments.” \801\ Accordingly, consistent with the statutory intent and text, NHTSA stated in the proposal that the agency limited its consideration to the effect of other Federal motor vehicle standards on fuel economy.

\799\ H.R. Rep. No. 103-180, at 583-584, tab. 2A.

\800\ See Public Law 103-272, 108 Stat. 745 (July 5, 1994) (to revise, codify, and enact without substantive changes certain laws related to transportation).

\801\ S. Rep. No. 103-265, at 4 (May 19, legislative day, May 16, 1994).

In addition, as NHTSA explained in the proposal, under EPCA's blanket preemption provision, States may not adopt or enforce regulatory requirements related to fuel economy standards.\802\ This preemption mandate holds true regardless of whether EPA has granted waivers for emissions requirements under the CAA. In addition, the President has signed into law three resolutions adopted by Congress under the Congressional Review Act (CRA) to disapprove waivers EPA granted under CAA section

209,\803\ including for, as is relevant to the model years and vehicle classes under consideration in this final rule, EPA's notice of decision granting CARB's request for a waiver of Clean Air Act (CAA) preemption for the Advanced Clean Cars II regulations for light-duty vehicles.\804\ In addition, to the extent that CARB purports to enforce its CO2 emission standards or ZEV mandate to any model years, including for MYs 2025 and beyond, those standards are preempted and unenforceable under EPCA, regardless of their waiver status under the CAA.\805\ Given the above, CARB standards cannot be justified as policies properly incorporated in the analytical baseline for EPCA purposes.

\802\ See 49 U.S.C. 32919.

\803\ H.J. Res. 87 (Pub. L. 119-15); H.J. Res. 88 (Pub. L. 119- 16); H.J. Res. 89 (Pub. L. 119-17); see also The White House, Statement by the President, last revised: June 12, 2025, available at: https://www.whitehouse.gov/briefings-statements/2025/06/statement-by-the-president/ (accessed: May 29, 2026).

\804\ 90 FR 642 (Jan. 6, 2025).

\805\ NHTSA is actively petitioning for formal recognition and a declaration that CARB's CO2 emission standards and ZEV mandate are inherently unenforceable. See United States v. CARB, No. 2:26-cv-847 (E.D. Cal.)

The agency received several comments on the interpretation that State standards are not “other motor vehicle standards of the Government” for purposes of EPCA and that certain standards related to CO2 emissions and zero emission vehicles are preempted. The API commented that “NHTSA is correct in not considering vehicle emissions standards previously set by the California Air Resources Board (CARB), or any other State,” as “[n]ot only did Congress revoke the waivers that allowed CARB to enforce its State regulatory programs, the term “the Government” clearly is a reference to the Federal Government and cannot reasonably be construed as including State or local governments.” \806\ API also stated that they supported NHTSA's proposal to not incorporate EPA's non-criteria emissions standards.\807\

\806\ API, Docket No. NHTSA-2025-0490-0053, at 4.

\807\ Id.

Other commenters, including NRDC et al. and the Attorneys General, opposed the agency's interpretation that the term is limited exclusively to standards issued by the Federal Government.\808\ NRDC et al. contended that NHTSA's reinterpretation contradicts the statute's plain text and legislative history, arguing that because the 1994 recodification was explicitly intended to restate the law without substantive change, the phrase “other motor vehicle standards of the Government” must retain the scope of the original 1975 EPCA text.\809\ This original text, specifically within the Section 502(d) modification provisions for MYs 1978-1980, unequivocally defined “Federal standards” to include EPA-approved California emissions standards, a legal incorporation NRDC et al. asserted remains binding despite the later removal of those specific model-year provisions.\810\ Consequently, they argued that NHTSA's current exclusion of California standards impermissibly reads a restrictive limitation into the statute that is unsupported by the historical record and violates established canons of construction against adding words to a statute that do not appear on its face.\811\ The Attorneys General also rejected NHTSA's argument that the singular article in “the Government” restricts the meaning solely to the Federal Government, arguing that such a reading makes no sense given the provision's clear object to account for the effects of all criteria pollutant emissions standards that reduce fuel economy, which they stated California has specific authority to set.\812\

\808\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 21-23; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 70.

\809\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 22.

\810\ Id.

\811\ Id. at 21-22.

\812\ Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 67-70.

Commenters also criticized the agency for an unjustified and inadequately explained departure from decades of past practice. Both NRDC et al. and the Attorneys General pointed out that NHTSA has consistently considered California's standards under this factor across multiple previous administrations.\813\ NRDC et al. argued that the agency failed to offer any practical or logical reason why Congress would have prohibited the consideration of CARB standards, given that they are mandatory legal obligations applying to automakers during the rulemaking timeframe.\814\ Furthermore, NRDC et al. asserted that NHTSA entirely ignored Federal case law, specifically citing the Green Mountain and Central Valley decisions, which explicitly considered and rejected the agency's newly proposed interpretation.\815\

\813\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 22; Attorneys General, Docket No. NHTSA-2025-0491-6064-A2, at 67.

\814\ NRDC et al., Docket No. NHTSA-2025-0491-5928-A2, at 22.

\815\ Id.

Commenters also stated that though California's ZEV standards are subject to litigation and EPA had (at the time of the comment period) proposed to rescind GHG standards, these standards remain in effect and NHTSA must consider them, in addition to considering that California and the “Section 177” States \816\ may increase the stringency of their standards or penalties for non-compliance in response to NHTSA's weakening of the CAFE standards.\817\

\816\ The term “Section 177” States refers to States which had previously elected to adopt California's standards in lieu of Federal requirements, as allowed under section 177 of the CAA when a valid California standard (i.e., a standard for which a waiver has been granted) is in place.

\817\ Lucid, Docket No. NHTSA-2025-0491-6043, at 5.

NHTSA has carefully considered the comments regarding its interpretation of the phrase “other motor vehicle standards of the Government” under 49 U.S.C. 32902(f). NHTSA continues to believe that the most natural reading of the current statutory text, which refers to standards of “the Government,” refers to the United States Government. The 1994 recodification was intended to be non-substantive, and the accompanying Senate report specifically states that the term “Government” means the Federal or United States Government in subsequent sections. Furthermore, even if the historical statutory language were read to encompass certain State-level requirements, such consideration would be moot in the present context because there are currently no operative California standards that would impose additional, non-redundant obligations on manufacturers beyond the Federal requirements accounted for in this analysis. As discussed above, to the extent CARB purports to enforce its CO2 emission standards or ZEV mandate to any model years, including for MYs 2025 and beyond, those standards are preempted and unenforceable under EPCA, regardless of their waiver status under the CAA.\818\

\818\ NHTSA is actively seeking a judicial declaration that CARB's CO2 emission standards and ZEV mandate are preempted by EPCA and unenforceable. See United States v. CARB, No. 2:26-cv-847 (E.D. Cal.).

The agency also disagrees with the assertion that this interpretation constitutes an inadequately explained departure from past practice. While NHTSA has considered California standards in various capacities in previous rulemakings, the agency has not considered California standards in every past rulemaking.\819\ NHTSA is not prohibited from refining its legal interpretations to align more faithfully with the language of the statute. NHTSA also recognizes the commenters' references to district court decisions in

Green Mountain and Central Valley; NHTSA addressed those decisions in the SAFE I proposal, concluding that the agency did not agree with the district courts' preemption analysis, which suggested an apparent misunderstanding of the underlying concerns and the requirement to consider other standards.\820\ Additional discussion of the agency's assessment of those decisions is located in the SAFE I proposal.\821\ The agency maintains that those decisions do not foreclose NHTSA from re-evaluating its own statutory interpretation, particularly as the legal landscape surrounding Federal preemption and State regulatory authority continues to evolve. Lastly, regarding the comment that NHTSA must factor in the possibility that California or Section 177 States may increase the stringency of their standards or penalties in response to this rulemaking, NHTSA disagrees. Not only are State-level fuel economy standards and associated penalties unlawful and unenforceable, but the agency has no duty to model hypothetical future regulatory reactions, regardless of their purported legality or enforceability.

\819\ See, e.g., 85 FR 24174 (Apr. 30, 2020).

\820\ 83 FR 42986, 43235-6 (Aug. 24, 2018).

\821\ Id.