The Trump administration finalized a significant weakening of federal fuel economy standards for automobiles, rolling back a key policy that had pushed the industry to improve the efficiency of cars and trucks and sell more battery-electric vehicles.
Automakers are expected to achieve a fleet average of 34.9 miles per gallon (mpg) for cars and light trucks in model year 2031, the Transportation Department said in a statement. That’s far less than the roughly 50 mpg required by standards finalized under President Joe Biden.
The move advances President Donald Trump’s push to eliminate Biden-era policies that he has repeatedly attacked as an “EV mandate,” calling those initiatives “ridiculously burdensome” and arguing they drive up new car prices.
New vehicles more affordable?
Trump has already signed legislation that eliminated penalties on automakers that fail to comply with fuel economy standards and canceled a $7,500 consumer tax credit for electric vehicle purchases. His Environmental Protection Agency has also repealed a landmark policy that provided the legal foundation to set limits on carbon dioxide emissions from sources including cars and trucks.
Transportation Secretary Sean Duffy cast the rollback as a means to make new vehicles more affordable. Even before gasoline prices soared due to the war with Iran, critics of Trump’s push argued that weakening fuel economy requirements would lead consumers to pay more at the pump.
NHTSA’s final rule represents a win for the auto and oil industries that had complained the requirements effectively discouraged the sale of traditional gas-fueled combustion engines in favor of emission-free electric models.
Automakers had argued the standards, which were toughened under Biden, were too aggressive and effectively required them to sell more EVs than the market would support.
John Bozzella, president of the Alliance for Automotive Innovation trade association that represents most carmakers, called the rule an “appropriate course correction”.“NHTSA made the right call to better align fuel economy standards with the law and current market conditions,” he said in a statement.
Savings for car manufacturers
The Transportation Department said General Motors will see its technology costs decline by $20.4 billion through 2031 as a result of the change.
In total, the Trump administration estimates automakers’ technology costs will decline by $60.6 billion through 2031, or about $1,289 per vehicle. The 2024 fuel economy rules had been estimated to cost GM $31.7 billion through 2031.
The new rule is expected to take effect around early December. Automakers will not need to add expensive emissions equipment to reduce fuel consumption or build more EVs, as they would have under the prior rule to meet more stringent requirements.
NHTSA said Stellantis’ costs will decline by $6.6 billion, Ford by $5.8 billion, Toyota by $4.5 billion, and Honda by $4.1 billion. GM said it supports the goals of the rule and the rule’s “intention to better align fuel economy standards with market realities.”
Consumers will pay, in the end
Environmentalists and consumer defense organizations harshly criticized the final rule for weakening standards that would have saved consumers billions of dollars at a time when gasoline prices have soared due to the war with Iran.
“Americans need relief from high costs, but instead Trump is giving automakers a free pass on pollution and handing families the bill,” Katherine García, the Sierra Club’s Clean Transportation for All director, said in a statement.
The final rule eliminates a credit-trading system that automakers have used to comply with the requirements, starting in model year 2028.
In 2030, the rule also changes the criteria used to classify vehicles as either passenger cars or light trucks, which face less stringent mileage requirements.
This will effectively reverse the current fleet mix of about 70% light trucks and 30% passenger vehicles, according to the Department of Transportation (DOT), subjecting many models, such as compact crossovers, to more demanding fuel economy requirements for cars.
