Tata could face more than $10 million in fuel-economy fines

One of the many challenges the new owner of Lander Rover and Jaguar will face is how to deal with U.S. fuel economy regulations. When FoMoCo bought the two luxury brands, it avoided paying fines because of the rest of Ford’s product lineup that met fuel economy standards.

Now, government data indicates that Jaguar cars and Land Rover SUVs would miss the current standards by several miles per gallon and Tata will be forced to write checks to the federal government for failing to meet those standards.

How much will Tata have to cough up? Well the rate is $5.50 per 0.1 mpg by which a standard is missed, multiplied by the brands sales volume. Even with the low-volume sales of Jaguar and Land Rover, Tata is looking at a potential annual fine of more than $10 million.

The CAFE standard currently is 27.5 mpg. The standard for light-trucks and SUVs is being raised to about 24mpg in 2011. However come 2020, both standards are to rise significantly reaching an industry average of 35mpg.

 

Source: Automotive News (Subscription Required)

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