Tesla urges court to reinstate higher carbon emission fines that Trump cancelled

Tesla urges court to reinstate higher carbon emission fines that Trump cancelled

EV pioneer Tesla Motors has urged a US appeals court to reinstate the higher carbon emission fines that were cancelled by former President Donald Trump. In 2016, a rule was enacted to impose higher fines on automobile manufacturers that would fail to meet fuel economy targets. But, the Trump administration delayed the implementation of the rule until 2022, apparently to support manufacturers of the internal combustion engines (ICEs).

Now, as Donald Trump has left the office and the administration is in the hands of Democratic President Joe Biden; Tesla has urged the Second Circuit U.S. Court of Appeals to reinstate the higher carbon emission fines on fossil fuel-based pollution-creating conventional vehicles. The EV giant argued that postponement of the rule was “unlawful” as it diminishes the value of performance-based incentives that EV manufacturers accrue under standards set by the government.

Tesla told the court, “The Trump administration’s action diminishes the value of performance-based incentives that electric vehicle manufacturers, such as Tesla, accrue under the standards … egregious action presents a situation as extraordinary as it is unjustified and inflicts immediate and irreparable injury on Tesla."

The Biden administration has already announced its support for the stricter emissions standards as well as higher fines but it has not supported it in the court. The administration is currently waiting for the National Highway Traffic Safety Administration’s (NHTSA’s) review of the Corporate Average Fuel Economy (CAFE) program, and it may take several months. Officially, the Biden administration’s position is that it should not rush the process through the court; instead, it should wait for the review.

According to Tesla, the U.S. government is “ignoring” the ongoing impact of the postponement of the rule on the credit-trading market. The EV giant also argued in the court that many EV manufacturers like it were suffering huge losses due to the trump administration’s “unlawful” decision.

Manufacturers of conventional fossil fuel-based vehicles can avoid fines by trading credits with other automakers that might be exceeding the standards. For example, Tesla has excessive credits as it sells only environment-friendly, zero-emissions EVs. The sale of those excessive credits to other manufacturers has brought hundreds of millions of dollars in revenue for the Palo Alto, California-based EV maker.

However, the Trump administration’s controversial decision of deferring the higher emissions fines on automakers that fail to meet the standards has adversely affected Tesla by freezing that stream of revenue for years.

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