WASHINGTON -- Automakers worried about the cost of meeting fuel economy targets are waking up to a startling new reality: The cost of not meeting them is about to get a lot higher.
Next month, the National Highway Traffic Safety Administration will more than double the fine it assesses automakers that fall short of their annual corporate average fuel economy standards. For many automakers, that increase could upend the economics of their fuel economy compliance strategies, laid out years ago, and insiders worry that automakers' exposure to fines for noncompliance will only grow as the CAFE requirements grow tougher each year.
What's more, NHTSA confirmed to Automotive News that the steeper penalties will apply to 2015 model year vehicles for which it has yet to issue compliance reports. That means automakers at risk of missing their targets still don't know how much more the increased fines may have already cost them.
The Alliance of Automobile Manufacturers blasted what it called a "draconian" increase, saying it will make it harder for automakers to make progress toward the Obama administration's call for a fleetwide average of 54.5 mpg by the 2025 model year.