The Vehicle Energy Performance Act of 2025 aims to enhance motor vehicle fuel economy by amending the Internal Revenue Code to introduce both tax incentives and fees. This legislation seeks to encourage the production and purchase of more fuel-efficient vehicles while discouraging less efficient models. It establishes a new tax credit for consumers and a new fee for manufacturers, both tied to a vehicle's energy performance relative to market medians. A key provision is the creation of a Vehicle Energy Performance Rebate , a refundable tax credit up to $5,000 for purchasers of new qualified high energy performance motor vehicles. This credit is scaled based on how much a vehicle's fuel economy exceeds the median performance for its model year, compared to the best performing vehicles. Starting with model year 2027, eligible vehicles include passenger automobiles and light trucks that surpass the median fuel economy, and the credit can be transferred to the dealer at the point of sale, provided the price is reduced accordingly. Conversely, the bill imposes a Low Vehicle Energy Performance Fee on manufacturers of new vehicles that fall below the median fuel economy, beginning with model year 2029. This fee, also up to $5,000, is calculated based on how far a vehicle's fuel economy is below the median, relative to the best and median performance. Certain vehicles are exempt from this fee, including commercial vehicles over 8,500 pounds and those used for emergency services. To support these mechanisms, the bill mandates annual reporting by vehicle manufacturers on the energy performance of their models, with the Treasury Department publishing median and best performance data. Furthermore, it updates how fuel economy is measured and displayed for dual-fueled automobiles, such as electric hybrids, requiring the Administrator to review and update formulas using real-world data every three years, starting with model year 2027.