Elon Musk’s Tesla is at odds with major automakers

Elon Musk’s Tesla is at odds with major automakers

Elon Musk

U.S. auto regulators have a new proposal that most automakers are vehemently against.

The National Highway Traffic Safety Administration (NHTSA) in July proposed new regulation for Corporate Average Fuel Economy (CAFE) requirements. The proposal would boost CAFE requirements by 2% annually for cars and 4% annually for trucks, with the goal of reaching an average fuel efficiency of 58 miles per gallon by 2032.

The NHTSA’s goal with its proposal is to provide “critical” cost-savings to American consumers, while additionally increasing energy savings.

According to Tesla (TSLA) – Get Free Report, the proposal doesn’t go far enough, however.

The electric vehicle leader pushed auto regulators Tuesday to up the proposed requirements to 6% annually for cars and 8% for trucks and SUVs, according to Reuters. Tesla said that such a restriction would best “conserve energy and address climate change.”

Two groups representing most other automakers, however, contend that the proposal, as it stands, goes too far already.

The Alliance for Automotive Innovation, whose members include Ford (F) – Get Free Report, General Motors (GM) – Get Free Report and most major automakers, said Monday that the proposal “exceeds reason and will increase costs to the American consumer with absolutely no environmental or fuel savings benefits.”

The organization predicted that, were such a plan finalized, average vehicle prices could jump by as much as $3,000 by 2032 due to automakers having to shell out noncompliance fees. These fees could total $14 billion between 2027 and 2032 if the plan goes into effect.

The proposal, the group said Tuesday, is “also likely to decrease auto sales and increase the average age of vehicles on our roads.”

The American Automotive Policy Council, a separate group which represents the Detroit Three, additionally pushed back against the proposal.

Tesla will report third-quarter earnings after the bell Wednesday.

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