Trump administration lowers fuel-economy targets for new vehicles
The White House finalized rules that reduce the annual fuel-efficiency increase for U.S. carmakers from 2% to 1%, citing lower vehicle prices, while critics warn the change could raise fuel consumption and hinder long-term competitiveness.
The U.S. Transportation Department announced on Monday that the Corporate Average Fuel Economy (CAFE) standards will be revised to require an annual 1% improvement in fuel efficiency for new passenger cars and trucks, targeting an average of 34.9 miles per gallon by model year 2031. The previous Biden administration had set a 2% annual increase with a goal of 50.4 miles per gallon for the same year.
Administration officials said the adjustment is intended to reduce vehicle costs, estimating a $1,300 reduction in sticker prices for new cars. "This administration is delivering relief to families and reviving the beating heart of American manufacturing," Transportation Secretary Sean Duffy said in an online statement. President Trump added on social media that the new standards would lower prices and save families money.
Environmental groups and industry analysts expressed concern that the rollback will increase gasoline use and emissions. Dan Becker of the Center for Biological Diversity warned that the change could raise fuel costs for consumers at the pump and health expenses. Economist Sue Helper of Case Western Reserve University said the move slows progress toward more efficient and electric vehicles, potentially harming the competitiveness of U.S. automakers in global markets.
The final rule also eliminates the ability for manufacturers to trade credits for electric-vehicle production, a provision introduced under the previous standards. The Alliance for Automotive Innovation, representing major U.S. automakers, said the revision better aligns standards with market conditions, while other experts noted that vehicle price growth is driven more by larger models, tariffs and supply-chain issues than by fuel-efficiency requirements.
Critics highlighted that reduced fuel efficiency could offset any sticker-price savings through higher fuel expenses, especially as gasoline prices remain near $4.50 per gallon. The long-term impact on the U.S. auto industry’s shift toward electric vehicles remains a point of debate.