The US Senate Committee on Commerce, Science, and Transportation will investigate whether mandatory vehicle safety technologies and environmental regulations contribute to soaring new car prices. A hearing scheduled for January 14, 2026, will feature testimony from the CEOs of Ford, GM, Stellantis, and Tesla’s head of vehicle engineering.
Senator Ted Cruz, the committee chair, asserts that “onerous government-mandated technologies and radical environmental regulations” inflate car costs. He points to the recently enacted One Big Beautiful Bill Act, which effectively weakens fuel economy standards by eliminating penalties for non-compliance. The act also ends the US$7500 federal tax credit for electric vehicle purchases in September 2025.
The Price Surge: Fact vs. Perception
The committee claims average new car prices have more than doubled in the last 25 years, jumping from US$20,356 (A$31,000) in 2000 to over US$50,000 (A$76,000) today. However, adjusting for inflation reveals a more moderate increase of around 30% rather than the stated 245%. The committee cites Kelley Blue Book data, which confirms the average transaction price exceeded US$50,000 in September 2024.
Why this matters: The debate over price increases isn’t purely economic. It reflects a broader tension between regulatory demands, consumer affordability, and industry profits. The committee’s framing of “onerous” mandates suggests a pushback against safety and environmental standards.
EV Tax Credit Impact and Market Dynamics
The end of the EV tax credit spurred a rush of purchases in September, temporarily inflating average transaction prices as electric cars are generally more expensive than comparable gasoline models. Erin Keating of Cox Automotive notes that affordable vehicles under US$20,000 are “mostly extinct,” forcing price-sensitive buyers into the used market.
Wealthier consumers with access to financing are now driving the market, with pickup trucks routinely exceeding US$65,000 in cost. Tariffs also contribute to price pressures, but the recent spike is largely attributed to the higher mix of EVs and luxury vehicles.
Safety Regulations Under Scrutiny
The hearing coincides with Congress’s reauthorization of a US$300 billion infrastructure bill that includes funding for the National Highway Traffic Safety Administration (NHTSA). Automakers have lobbied against NHTSA’s plan to mandate autonomous emergency braking (AEB) on all new cars by 2029.
Key finding: Despite industry resistance, studies show AEB reduces front-to-rear collisions by 49% and accidents involving pedestrians and cyclists by 9%. This highlights a conflict between cost reduction efforts and proven safety benefits.
Road Safety: US vs. Australia
The US faces significantly higher road fatalities than Australia. Roughly 40,000 people died on US roads last year, equating to 12 fatalities per 100,000 people. In contrast, Australia recorded 1,300 deaths in 2024, or 4.3 fatalities per 100,000.
Conclusion
The Senate hearing aims to weigh the financial costs of safety technologies against their life-saving benefits. The debate reflects a larger struggle between regulatory oversight, industry priorities, and consumer affordability. Ultimately, Congress’s decision on funding and safety mandates will shape the future of vehicle pricing and road safety in the United States.
