The Trump administration announced plans Wednesday to lower fuel economy standards for cars and light trucks sold in the United States.
With CEOs from Ford and Stellantis in attendance, President Donald Trump proposed rolling back fleet-wide fuel economy to 34.5 miles per gallon for 2031 model-year cars. The previous fuel economy standard, set under the Biden administration, mandated fuel economy of 50.4 mpg by 2031. The regulation change also reclassifies crossovers as cars instead of light trucks, and it eliminates automakers’ ability to trade electric vehicle credits.
The National Highway Traffic Safety Administration regulates fuel economy rules under Corporate Average Fuel Economy (CAFE) Standards. Those rules, first enacted by Congress in 1975, dictate how far vehicles must travel on a gallon of fuel. In 2024, automakers had to average 30.1 mpg across their fleets, which they beat, delivering 35.4 mpg, according to CAFE calculations.
Trump also said he would authorize the Department of Transportation to allow automakers to manufacture “really small cars” like the kind found in Japan and South Korea.
The White House claims that existing regulations would have caused automotive prices to increase 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 rollback, though, the price of a new vehicle has climbed to new heights, topping $50,000 on average, as automakers discontinued low-end models to capitalize on consumers’ preferences for SUVs. Larger vehicles use more material, thus costing more to make, while also getting lower fuel economy.
Consumers’ choices appear to run counter to the administration’s contention that lower fuel economies are in the car-buying public’s interests. For instance, hybrid sales are up significantly this year over last and momentum continues. Hybrid sales grew 6% in October over 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 those 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 in our clunkers, paying more for gas, and pumping out more tailpipe emissions,” Gina McCarthy, former EPA administrator, said in a statement. “With their backwards thinking and never-ending 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 Act this summer, which eliminated penalties for automakers that don’t hit their marks, fuel economy standards have been essentially toothless. Instead, the regulatory move is likely intended to serve as a hurdle for future administrations to bring them back.
Already, automakers have been moving to sell more gas-guzzling vehicles.
Ford has indefinitely paused production of its electric F-150 Lightning pickup truck, shifting capacity in favor of internal combustion models. Stellantis reintroduced its Hemi V-8 engines, though a review of the powertrain in the Ram 1500 has revealed that it performs worse in nearly every way than a more efficient inline-6.
Not all automakers have decided to turn back, though. Hyundai is still committed to EVs, while its sibling Kia has given its EVs $10,000 discounts across the board.
