Starting in 2026, fuel efficiency regulations for new cars sold in the United States will be further strengthened. The Minister of Transportation announced that fuel efficiency standards for new vehicles for the 2024-2025 model year will be raised by 8% per year and improved by 10% in 2026. If an automobile manufacturer fails to comply with CAFE standards, it will be subject to a fine.
With the strengthened fuel efficiency regulations, consumers who purchase a new 2026 model will be able to drive 33% more distance per gallon compared to a 2021 model. The U.S. Department of Transportation predicts that improved fuel efficiency of new vehicles will reduce gasoline consumption by 234 billion gallons and carbon dioxide emissions by 2.5 billion metric tons by 2050.
Under the CAFE system, if an automobile manufacturer fails to meet fuel efficiency standards, it must pay a certain amount of fine per 0.1 mpg in proportion to the number of vehicles sold, and if it exceeds the standards, it can be calculated as a credit and used for the shortfall.
According to an analysis by BloombergNEF, a total of 657,000 electric vehicles were sold in the United States in 2021, accounting for only 4.4% of total new car sales, but an increase of more than 2 percentage points compared to the previous year.
Last year, SUVs and pickup trucks were the most popular vehicles sold, accounting for 70% of the total.
As President Biden is actively responding to climate change, strengthening fuel efficiency regulations and pressure to expand electric vehicle production are expected to continue in the future, so Korean automobile manufacturers are also required to respond quickly.
The expansion of the electric vehicle market due to the strengthening of fuel efficiency regulations in the United States may lead to expanded opportunities for the Korean battery industry, which is highly competitive in the global market.
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