Friday, July 25, 2025

One of the most important provisions in the One Big Beautiful Bill has gone completely unnoticed, but promises to make the auto industry great again.

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One of the most important provisions in the One Big Beautiful Bill has gone completely unnoticed, but promises to make the auto industry great again.

For 50 years, the federal government has been forcing fuel economy standards on auto companies. If the average fuel economy of the cars sold in a year exceeded a federal standard, the companies had to cough up enormous penalties.

Passed in 1975 as a way to deal with an energy crisis (that was caused by government price controls), “corporate average fuel economy” (CAFE) standards – required the fleet of cars sold by an automaker to achieve an arbitrary miles-per-gallon goal. If they missed the goal, they paid hefty annual fines.

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