Trump administration lowers fuel economy standards for new vehicles

The Trump administration finalized weaker fuel economy standards Monday, lowering the projected average for new passenger cars and light trucks in model year 2031 from 50.4 miles per gallon under Biden-era rules to 34.9 miles per gallon.

The revised Corporate Average Fuel Economy standards require automakers to make their new vehicle fleets up to 1% more fuel efficient each year, according to NPR. The previous rules called for annual increases of 2% from 2027 through 2031. The standards, first established by Congress in 1975, set average fuel economy targets for automakers.

The Transportation Department says the change will reduce the upfront cost of a new vehicle by an average of $1,300 and save Americans $138 billion over five years. Officials argue that meeting the tougher standards adds manufacturing costs and limits the types of vehicles automakers can offer.

“Thanks to President Trump’s leadership, we have finally ended the illegal mandate that forced automakers to produce more expensive electric vehicles that American families didn’t want,” Transportation Secretary Sean Duffy said in a statement. Trump wrote on Truth Social that the new standards would “take the waste out of building cars in America” and mean lower prices.

The Guardian reported that no federal policy required automakers to sell electric vehicles. The Biden-era fuel economy rules did, however, create an incentive to make them: EVs could help manufacturers balance less efficient models when calculating their fleet averages. The Trump administration removed penalties for failing to meet the standards last July, NPR reported. The final rule also eliminates a system that allowed automakers to buy credits from EV manufacturers to help meet their targets.

The administration’s estimate of lower sticker prices comes as drivers face higher fuel costs. AAA put the national average gasoline price at $4.47 a gallon Monday, up from $2.98 before the war with Iran, according to CBS News. Opponents of the change say less efficient vehicles will cost owners more to fuel and increase pollution.

“Trump is tanking sensible mile per gallon standards at the worst possible time for consumers, who are getting hit with sky-high prices at the pump,” said Dan Becker, director of the Center for Biological Diversity’s Safe Climate Transport Campaign. Harold Wimmer, president and CEO of the American Lung Association, said the rule would “create more air pollution, harm health and accelerate climate change.”

Some analysts also question how much fuel economy requirements have contributed to vehicle prices. A 2023 Consumer Reports analysis found vehicles became about 30% more fuel efficient between model years 2003 and 2021 but attributed rising prices to an industry shift toward more expensive SUVs, NPR reported. Economist Sue Helper of Case Western Reserve University said larger vehicles, tariffs, supply chain problems and added features have also pushed prices up.

The Alliance for Automotive Innovation welcomed the change. Its president, John Bozzella, said the agency had made “the right call to better align fuel economy standards with the law and current market conditions,” while the group continued reviewing the final rule.