President Trump rolled back fuel economy rules that he claims created an “EV mandate” after former President Joe Biden imposed stricter fuel economy standards last year.
Trump said the administration was officially terminating Biden’s “ridiculous” CAFE (corporate average fuel economy) rules, claiming car prices would come down in response to today’s action. Automakers are now required to meet an average of 34.5 mpg across their model fleet by 2031, a dramatic drop from the average of 50.4 mpg across 2031 that the Biden administration had proposed.
Trump said the action would allow automakers to produce cheaper cars, saving consumers “[at] least $1,000” off the price of a car.
Ford (F) CEO Jim Farley, Stellantis (STLA) CEO Antonio Filosa, and other auto industry executives were in attendance.
“Today is a victory for common sense and affordability,” Farley said at the event. “This is the right move … We will invest more in affordable vehicles.”
Earlier this year, the Transportation Department and Secretary Sean Duffy paved the way for looser US fuel economy standards by declaring the Biden administration exceeded its authority, assuming increasing EV sales in calculating fleet mile per gallon rules. The prior rules assumed the fuel economy averages for the “fleet” of vehicles available by specific automakers would rise due to the higher uptake of EVs.
Trump also signed legislation this year that ended fuel economy penalties for automakers, with the National Highway Traffic Safety Administration (NHTSA) claiming the industry faced no fines dating back to the 2022 model year. Automakers like Tesla make billions by selling emission credits for these penalties, a source of revenue that will now disappear.
Wednesday’s action furthers Trump’s moves to weaken environmental regulations and aid automakers.
“We’re reviewing NHTSA’s announcement, but we’re glad the agency has proposed new fuel economy standards,” said John Bozzella, president and CEO of the Alliance for Automotive Innovation, the industry’s top trade group.
“We’ve been clear and consistent: The current CAFE rules finalized under the previous administration are extremely challenging for automakers to achieve given the current marketplace for EVs.”
Bozzella added, “What’s good for consumers and the auto industry? A stable regulatory environment and balanced, reasonable, achievable standards that continue to reduce emissions and improve fuel economy.”
Public advocacy groups countered the industry’s position.
“The previous fuel economy standards — which the Trump administration has now said it will not enforce — would have saved Americans $23 billion in fuel costs and reduced our national fuel consumption by 70 billion gallons,” said Will Anderson, zero-emission vehicles policy advocate at Public Citizen. “Americans support strong fuel economy standards… [with] two-thirds saying that fuel economy is very important or extremely important.”
Anderson added that the new policy diverts money to “Trump’s oil and gas cronies” at the expense of the American public.
