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Proposals under President Joe Biden’s administration to tighten US fuel economy standards through to 2032 would reportedly cost General Motors $6.5 billion and Stellantis $3 billion in fines.

The details were outlined in a letter written by trade group the American Automotive Policy Council (AAPC) to the Department of Energy (DOE), Reuters reports. The council represents the Detroit Three automakers Ford, Stellantis and General Motors.

The fines relate to expected penalties for not meeting proposed Corporate Average Fuel Economy (CAFE) targets.

CAFE regulations were first enacted by Congress in 1975, following the 1973-74 Arab Oil Embargo to improve the average fuel economy of cars and light trucks produced for sale in the US.

Reuters reports that Ford faces a separate $ 1 billion in penalties, and Volkswagen faces upwards of $1 billion.

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By GlobalData

The letter from the AAPC stated that the policy “would reward those auto manufacturers resisting the transition to a fully electric future the most.”

It is estimated that the auto industry “as a whole” could face $14 billion in CAFE fines.