The decision was a win for Tesla that could cost other automakers hundreds of millions of dollars, if not billions of dollars.
According to the NHTSA, the decision "increases the accountability of manufacturers for violating the nation's fuel economy standards" and the penalty increase "incentivizes manufacturers to make fuel economy improvements," confirming an earlier report by Reuters.
In its final days in January 2021, President Donald Trump's administration delayed a 2016 regulation that more than doubled penalties for automakers failing to meet Corporate Average Fuel Economy (CAFE) requirements beginning with the 2019 model year.
The NHTSA's final rule, which takes effect 60 days after it is published, reinstated and increased the higher penalties for the 2022 model year. While the issue was being investigated and is being challenged in court, the agency did not collect penalties for the model years 2019 to 2021.
The final rule was signed by the NHTSA's top official, Steven Cliff, on Thursday, ahead of its formal publication.
The fine is $14, up from $5.50, for every 0.1 mile per gallon new vehicles fall short of required fuel-economy standards, multiplied by the number of noncompliant vehicles sold for the 2019 to 2021 model years. This increases to $15 for the 2022 model year.
In 2016, automakers protested the penalty increase, claiming it would increase industry costs by at least $1 billion per year. According to previous estimates, the decision will cost Chrysler parent Stellantis up to $572 million, while increasing the value of compliance credits sold by Tesla.
Automakers whose vehicles achieve higher fuel economy than required can sell credits to those whose vehicles do not meet CAFE standards.
The higher penalties were set to begin with the 2019 model year under President Barack Obama, but following a court decision, the Trump administration moved the effective date to the 2022 model year.
The NHTSA estimated that automakers would owe $294 million under the new rate for the 2019 model year, up from $115.4 million under the previous rate.
Automakers who made plans for 2019 through 2021 "thinking that penalties would not increase" did so at their own risk, according to the NHTSA.
The head of a trade group representing nearly all major automakers except Tesla said on Sunday that it would be a "better outcome" if the penalties were "invested in electric vehicles, batteries, and charging infrastructure rather than disappearing into the Treasury's general fund."
In August, the NHTSA proposed increasing CAFE requirements by 8% per year from 2024 to 2026, reversing a Trump-era regulation that reduced higher requirements beginning with the 2021 model year. This week, the NHTSA is expected to release its final CAFE rules through 2026.
Stellantis said on Sunday that it would "like to work with the administration and Congress to allow the agencies to use the proceeds of penalties to bolster investments in the technologies and infrastructure required to accelerate a robust US market for EVs."
Tesla did not respond immediately to a request for comment.
In 2015, Congress directed federal agencies to adjust civil penalties to account for inflation. Fuel economy fines in the United States have lost 75% of their original value, having risen only once since 1975, from $5 to $5.50 in 1997.