trump administration rolls back fuel economy standards, again

Fuel Economy Standards to be Lowered by the Trump Administration

The Trump administration revealed intentions on Wednesday to revise fuel economy standards for automobiles and light trucks marketed within the United States.

Rollback of Standards and Reclassification of Vehicles

President Donald Trump, alongside CEOs from Ford and Stellantis, suggested a reduction in fleet-wide fuel economy to 34.5 miles per gallon for the 2031 model year. This contrasts with the prior standard, established during the Biden administration, which required 50.4 mpg by 2031.

The proposed changes also involve reclassifying crossover vehicles as cars rather than light trucks. Furthermore, the ability for automakers to utilize electric vehicle credits will be eliminated.

CAFE Standards and Historical Context

Fuel economy regulations are overseen by the National Highway Traffic Safety Administration under the Corporate Average Fuel Economy (CAFE) Standards. These standards, initially enacted by Congress in 1975, determine the distance a vehicle must travel per gallon of fuel.

In 2024, automakers were required to achieve an average of 30.1 mpg across their fleets, a target they surpassed, reaching 35.4 mpg according to CAFE calculations.

Authorization for Smaller Vehicle Production

President Trump also indicated his intention to authorize the Department of Transportation to permit automakers to manufacture smaller vehicles, similar to those commonly found in Japan and South Korea.

White House Claims Regarding Automotive Prices

The White House asserts that current regulations would lead to an increase of $1,000 in the price of each vehicle. This argument was previously made by the Trump administration in 2020 during a prior rollback of fuel economy standards.

Rising Vehicle Prices and Consumer Preferences

However, since that previous rollback, the average price of a new vehicle has risen significantly, exceeding $50,000. This increase is partly attributed to automakers discontinuing lower-priced models to focus on the demand for SUVs.

Larger vehicles necessitate more materials, increasing production costs and reducing fuel efficiency.

Consumer Trends and Hybrid Vehicle Sales

Consumer behavior appears to contradict the administration’s claim that lower fuel economies align with public interests. Notably, hybrid vehicle sales have increased substantially this year, demonstrating continued momentum.

October saw a 6% growth in hybrid sales compared to the previous month.

Expert Doubts on Price Impact

Experts express skepticism that lowering fuel economy standards will impact new vehicle prices. Many vehicles are designed with global markets in mind, and efficiency remains a priority in most of those markets.

Criticism of the Rollback

“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,” stated Gina McCarthy, former EPA administrator. “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.”

Impact of the One Big Beautiful Bill Act

The passage of the One Big Beautiful Bill Act this summer, which removed penalties for automakers failing to meet standards, has effectively rendered fuel economy standards unenforceable. The regulatory shift is likely intended to create obstacles for future administrations attempting to reinstate stricter standards.

Automaker Shifts Towards Gas-Guzzling Vehicles

Automakers have already begun to prioritize the sale of vehicles with lower fuel efficiency.

Ford has temporarily halted production of its electric F-150 Lightning pickup truck, reallocating resources to internal combustion engine models. Stellantis has reintroduced its Hemi V-8 engines, although evaluations indicate that the powertrain in the Ram 1500 performs less efficiently than a more modern inline-6.

Continued Commitment to EVs by Some Automakers

Despite these trends, some automakers remain dedicated to electric vehicles. Hyundai continues its commitment to EVs, while its affiliate, Kia, has implemented $10,000 discounts across its entire EV lineup.