Trump Administration Halves Stringent Fuel Economy Standards for Automakers

The Department of Transportation announced on Monday that it is easing corporate average fuel economy (CAFE) standards previously established under the Biden administration. Transportation Secretary Sean P. Duffy described the new regulations as “commonsense” guidelines designed to reduce vehicle costs and revitalize American manufacturing.

“This administration is delivering relief to families and reviving the beating heart of American manufacturing,” Duffy said. “With our commonsense standards in place, we are making the American dream affordable again, putting safer cars on the road, and investing in the American autoworker.”

Under the revised rule, the average fuel economy requirement for vehicles is reduced from 50.4 miles per gallon by 2031 to 34.9 miles per gallon by 2031. Additionally, the regulation eliminates the incentive for automakers to invest in electric vehicle (EV) production to meet compliance targets, effectively reversing the 2024 rules set by the previous administration.

National Highway Traffic Safety Administration (NHTSA) Administrator Jonathan Morrison stated that the change restores integrity to the national fuel economy program. He argued that lowering vehicle prices will allow more families to purchase newer, safer cars, while giving manufacturers the flexibility to build what consumers actually want rather than optimizing for regulatory classification.

The department also plans to reclassify light trucks and passenger vehicles starting in 2030. Officials claim the current classification system has discouraged the production of hatchbacks, wagons, and smaller footprint vehicles. The shift is expected to cut the average cost of a new vehicle by approximately $1,300, potentially saving Americans $138 billion over five years. As of July, the average new vehicle price stood at $49,855, according to Kelley Blue Book.

However, the rollback is projected to increase environmental impact. The Department of Transportation estimates that U.S. yearly oil consumption will be 1.3 billion barrels higher in 2050 compared to the previous standards. The EPA notes that transportation accounts for more than 75% of direct greenhouse gas emissions in the country.

Environmental groups and climate experts swiftly condemned the decision. Gina McCarthy, former EPA administrator and chair of America Is All, criticized the move as a step backward for innovation and affordability. “Rather than keeping the U.S. at the forefront of innovation and improving affordability, this administration has chosen to do the opposite,” McCarthy said.

Katherine García, director of the Sierra Club’s Clean Transportation for All initiative, warned that less efficient vehicles would lead to higher gas spending and dirtier air. “The Sierra Club will fight this senseless rollback every step of the way,” she said.

Industry support for the change was immediate. John Bozzella, president and CEO of the Alliance for Automotive Innovation, called the rule a “course correction” that aligns with market realities and customer demand. He emphasized the need for long-term regulatory stability to keep the U.S. auto industry globally competitive.

President Donald Trump celebrated the decision on social media, stating that the standards would “take the waste out of building cars in America” and result in lower prices for consumers.