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Tesla asks court to reinstate hike in emissions penalties

Tesla Inc is urging a U.S. appeals court to immediately reinstate a 2016 Obama regulation more than doubling fines for automakers that fail to meet fuel efficiency requirements, according to court filings.

The Trump administration on January 14 delayed the start of higher fines until the 2022 model year. Tesla informed the Second Circuit U.S. Court of Appeals the Trump action was “unlawful” and “diminishes the value of performance-based incentives that electric vehicle manufacturers, such as Tesla, accrue under the standards”.

Although President Joe Biden supports tougher emissions standards, his administration is opposed to Tesla’s request for immediate court action, saying the National Highway Traffic Safety Administration (NHTSA) is scrutinizing the Trump action on Corporate Average Fuel Economy (CAFE) penalties and will finish its review in six months. A group representing major automakers is also opposed to immediate action.

Tesla first asked the appeals court to act on March 4, saying the Trump administration’s egregious action presents a situation as extraordinary as it is not justified and inflicts immediate and irreparable injury on the automaker.

In a filing Monday, it said that the government’s position that there was no immediate harm to enabling the Biden administration time to review the Trump decision “ignores the ongoing impacts” on the credit-trading market.

The Justice Department declined Tesla claims it faces irreparable harm noting NHTSA has not yet assessed CAFE penalties for 2018 or 2019 model years.

Tesla, whose electric cars produce zero emissions, sells credits to other automakers to decrease their burden of adhering to the regulations and argues that the Trump rule change makes those credits less worthwhile.

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