U.S. no longer enforces vehicle fuel efficiency standards, waiving fines retroactively to 2022.
Automakers may shift back to larger engines, risking Canada’s emissions progress.
Canadian advocates push to import European EVs to maintain clean vehicle availability.
A new U.S. law has effectively ended enforcement of federal fuel economy standards, eliminating penalties for automakers who fail to meet efficiency targets. Though Corporate Average Fuel Economy (CAFE) regulations remain on the books, their removal from active enforcement means automakers no longer face consequences for selling lower-efficiency vehicles.
The National Highway Traffic Safety Administration has confirmed that no fines will be issued for non-compliance dating back to the 2022 model year. The change reverses decades of U.S. policy intended to reduce fuel consumption and limit emissions.
With no regulatory pushback, automakers may reintroduce larger engines across some product lines. Stellantis, which owns Dodge, Jeep, and Ram, recently brought its Hemi V8 engines back into production to much acclaim and extremely strong demand, and revived its SRT performance division.
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Fuel efficiency standards had previously driven a shift toward turbocharged smaller engines in many midsize and large vehicles, including midsize SUVs, trucks and performance cars. The rollback could change that trend, especially as U.S. gasoline prices remain low.
Despite the U.S. changes, automakers selling vehicles globally must continue meeting stricter emissions standards in Europe and Asia. Many models remain globally homologated, limiting the extent of fuel efficiency regression. However, models targeted primarily at the North American market, particularly pickups and SUVs, could see a regression of sorts back toward less efficient powertrains.
Canada, which shares many vehicle regulations with the U.S., now faces increased uncertainty. Analysts suggest automakers could deprioritize Canadian emissions targets if not compelled by enforcement measures in the larger U.S. market. Alternatively, simply pulling certain products from Canadian stores.
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In response, some Canadian dealers and electric vehicle advocates are pushing to allow direct imports of European-market vehicles, including hybrids, PHEVs, and EVs that are not currently approved for sale in Canada.
Electric Mobility Canada and other groups argue that such a move could widen consumer choice and maintain emissions targets. “If the car is good enough to be driven on European roads, where you can drive much faster than here, don’t come and tell me that they’re not safe enough to be driven in Canada,” said EMC President Daniel Breton.
Transport Canada remains hesitant, citing differences in crash testing and driving environments. “Some European crash testing requirements are not as stringent as the Canadian regime due to differences in their driving environment,” said spokesperson Hicham Ayoun.
Nonetheless, public support for allowing European EVs is growing. A recent poll found 70% of Canadians support changing regulations to permit their import.
Advocates believe this could be a way for Canada to maintain access to high-efficiency vehicles, even as the U.S. shifts course on fuel and emissions regulation.
