The Trump administration announced plans Wednesday to lower fuel economy standards for cars and light trucks sold in the United States.
With the CEOs of Ford and Stellantis in attendance, President Donald Trump proposed bringing fleet-wide fuel economy back to 34.5 mpg for 2031 cars. The previous fuel economy standard, set under the Biden administration, set fuel economy at 50.4 mpg by 2031. The rule change also reclassifies crossovers as cars instead of light trucks and eliminates the ability of automakers to trade electric vehicle credits.
The National Highway Traffic Safety Administration regulates fuel economy rules according to Corporate Average Fuel Economy (CAFE) Standards. These rules, first enacted by Congress in 1975, dictate how far vehicles must travel on a gallon of fuel. In 2024, automakers were required to average 30.1 mpg in their fleets, which they surpassed, delivering 35.4 mpg, according to in CAFE calculations.
Trump also said he would authorize the Transportation Department to allow automakers to build “really small cars” like those found in Japan and South Korea.
The White House claims existing regulations would have caused car prices to rise by $1,000 per vehicle. The previous Trump administration made the same argument in 2020, when it last rolled back fuel economy standards.
Since that reset, however, the price of a new vehicle has rose to new heightsexceeding $50,000 on average, as automakers discontinued low-end models to tap into consumer preferences for SUVs. Larger vehicles use more materialtherefore it costs more to build while achieving lower fuel economy.
Consumer choices appear to contradict the administration’s contention that lower fuel economy is in the best interest of the car-buying public. For example, hybrid sales are up significantly this year compared to last year and the momentum continues. Hybrid sales rose 6% in October compared to the previous month.
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Experts doubt that lower fuel economy standards will change the trajectory of new vehicle prices. Many vehicles are developed with global markets in mind and most of them still value efficiency.
“The rest of the world will continue to innovate and create cleaner cars that people want to buy and drive, while we’re forced to sit on our feet, pay more for gas and pump more emissions out of the tailpipe,” said Gina McCarthy, former EPA administrator. “With their backward thinking and endless efforts to create more pollution in this country, we are ceding the global car market and technological innovation to China.”
Since the passage of the One Big Beautiful Bill this summer, which eliminated penalties for automakers that don’t hit their marks, fuel economy standards are essentially useless. Instead, the regulatory move is likely intended to serve as a deterrent for future administrations to reinstate them.
Already, automakers have moved to sell more gas-guzzling vehicles.
Ford has indefinitely discontinued production of its F-150 Lightning electric truck, shifting capacity in favor of internal combustion models. Stellantis brought back the Hemi V-8 engines, although a review of the powertrain in the Ram 1500 revealed that performs worse in almost every way than a more efficient inline-6.
However, not all automakers have decided to turn back. Hyundai is still bound in EVs, while its sister Kia has given away its EVs $10,000 in rebates over the entire surface.
