Trump administration revises fuel economy standards once more

On Wednesday, the Trump administration unveiled plans to relax fuel efficiency standards for vehicles sold in the U.S., affecting both cars and light trucks. During the announcement, attended by executives from Ford and Stellantis, President Donald Trump proposed lowering the fleet-wide fuel economy target to 34.5 miles per gallon for 2031 model-year vehicles. Previously, the Biden administration had set the standard at 50.4 mpg by the same year.

The proposed regulation also changes the classification of crossovers from light trucks to cars. Fuel efficiency rules in the U.S. are overseen by the National Highway Traffic Safety Administration under the Corporate Average Fuel Economy (CAFE) standards, which were first established by Congress in 1975 to determine how far vehicles must travel per gallon of fuel.

President Trump added that the Department of Transportation would be authorized to allow automakers to produce smaller cars similar to those popular in Japan and South Korea. The administration claims that existing regulations would have driven up vehicle prices by roughly $1,000 per car. This mirrors arguments made during the previous Trump administration rollback in 2020.

However, since that earlier rollback, the cost of new vehicles has surged, with average prices now exceeding $50,000. Automakers have reduced production of entry-level models to meet consumer demand for SUVs, which are larger, more expensive to manufacture, and less fuel-efficient. Consumer behavior appears to contradict the administration's claims that lower fuel economy benefits buyers. Hybrid vehicle sales, for instance, have been rising steadily, with a 6% increase in October compared to the previous month.

Experts suggest that relaxing fuel efficiency standards is unlikely to reverse rising vehicle costs, as many cars are developed for global markets where efficiency remains a priority. Gina McCarthy, former EPA administrator, criticized the move, saying it will leave the U.S. behind in clean vehicle technology while China dominates the market, increasing pollution and gas consumption domestically.

Fuel efficiency standards have been weakened further since the passage of the One Big Beautiful Bill Act, which removed penalties for manufacturers failing to meet targets. Analysts note that this regulatory change seems aimed at complicating efforts by future administrations to reinstate stricter rules.

Automakers are already responding by focusing on less efficient vehicles. Ford has paused production of its electric F-150 Lightning to prioritize internal combustion trucks, while Stellantis has brought back its Hemi V-8 engines, despite these performing worse than more efficient inline-6 options. Yet some companies remain committed to electric vehicles; Hyundai continues to invest in EVs, and Kia is offering $10,000 discounts on its electric models.

Author: Zoe Harrison