H.R.1293 - Vehicle Energy Performance Act of 2025 (119th Congress)
Summary
H.R. 1293, the Vehicle Energy Performance Act of 2025, introduces tax incentives and fees to promote increased motor vehicle fuel economy. The bill aims to amend the Internal Revenue Code of 1986 by establishing a tax credit for high energy performance vehicles and a fee for low energy performance vehicles. These measures are intended to encourage manufacturers and consumers to adopt more fuel-efficient vehicles.
The bill also includes provisions for measuring fuel economy in dual-fueled automobiles, ensuring accurate labeling, and updating fuel economy information. These changes are set to take effect starting with model year 2027 for tax credits and fuel economy measurements, and model year 2029 for low energy performance fees.
Ultimately, the goal is to reduce energy consumption and promote environmentally friendly transportation options through financial incentives and disincentives.
Expected Effects
The Vehicle Energy Performance Act is likely to shift consumer demand towards more fuel-efficient vehicles by making them more affordable through tax credits. Simultaneously, it will discourage the production and purchase of less fuel-efficient vehicles through the imposition of fees.
Manufacturers will likely invest more in research and development to produce vehicles that meet the criteria for the tax credit and avoid the low energy performance fee. This could lead to innovation in vehicle technology and a reduction in overall fuel consumption.
The updated fuel economy measurement standards for dual-fueled automobiles will provide consumers with more accurate information, potentially influencing their purchasing decisions.
Potential Benefits
- Encourages the development and adoption of more fuel-efficient vehicles.
- Reduces overall energy consumption in the transportation sector.
- Provides consumers with potential tax credits for purchasing high energy performance vehicles.
- Promotes innovation in vehicle technology and manufacturing.
- Offers more accurate fuel economy information for dual-fueled automobiles.
Potential Disadvantages
- May increase the cost of less fuel-efficient vehicles due to the low energy performance fee.
- Could disproportionately affect lower-income individuals who may rely on older, less fuel-efficient vehicles.
- Requires manufacturers to adapt to new regulations and reporting requirements, potentially increasing production costs.
- The effectiveness of the tax credit depends on consumer awareness and adoption rates.
- Potential for unintended consequences if manufacturers focus solely on meeting the minimum requirements for the tax credit without significant improvements in overall vehicle performance.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the US Constitution is primarily based on the Commerce Clause (Article I, Section 8), which grants Congress the power to regulate interstate commerce. By setting standards for vehicle energy performance and providing tax incentives, the bill aims to influence the automotive industry, which operates across state lines.
The Sixteenth Amendment, which allows Congress to levy and collect taxes on income, provides the constitutional basis for the tax credits and fees outlined in the bill. These financial measures are designed to incentivize certain behaviors related to energy consumption and environmental protection.
While the bill does not directly infringe upon individual liberties or rights, its impact on consumer choices and manufacturer regulations should be carefully considered to ensure compliance with constitutional principles.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).