The Trump administration is rolling back fuel economy standards again

The Trump administration on Wednesday announced plans to lower fuel economy standards for cars and light trucks sold in the United States.

With CEOs from Ford and Stellantis in attendance, President Donald Trump proposed reducing fleet-wide fuel economy to 34.5 miles per gallon for model year 2031 vehicles. The previous fuel economy standard, set under the Biden administration, called for fuel economy of 50.4 mpg by 2031. The regulation change also reclassifies crossovers as cars instead of light trucks.

The National Highway Traffic Safety Administration regulates fuel economy rules under the Corporate Average Fuel Economy (CAFE) standards. These rules, first passed by Congress in 1975, specify how far vehicles must travel on a gallon of fuel.

Trump also said he would allow the Department of Transportation to allow automakers to build “very small cars” like the type found in Japan and South Korea.

The White House claims that current regulations would have increased car prices by $1,000 per vehicle. The previous Trump administration made the same argument in 2020, when it last rolled back fuel economy standards.

Since that decline, the price of a new vehicle has soared to new heights, exceeding $50,000 on average, as automakers discontinue lower-end models to capitalize on consumer preferences for SUVs. Larger vehicles use more materials and therefore cost more to manufacture, while also having lower fuel economy.

Consumer choices appear to contradict the administration’s claim that lower fuel economy is in the interest of the car-buying public. For example, hybrid car sales are up significantly this year compared to last year and the momentum continues. Hybrid car sales rose 6% in October compared to the previous month.

Experts doubt that lower fuel economy standards will change the course of new car prices. Many vehicles are developed with global markets in mind, and most still value efficiency.

“The rest of the world will continue to innovate and create cleaner cars that people want to buy and drive, while we are forced to sit in our old cars, pay more for gas, and pump out more tailpipe emissions,” former EPA Administrator Gina McCarthy said in a statement. “With their backward thinking and endless efforts to create more pollution in this country, we are ceding the global automobile market and technological innovation to China,” he added.

Since the passage of the One Big Beautiful Bill this summer, which eliminated penalties for automakers that don’t meet their targets, fuel economy standards have become essentially toothless. Instead, this regulatory move is likely to act as an obstacle for future administrations to bring it back.

Already, automakers are moving to sell more gas-guzzling vehicles.

Ford has paused production of its F-150 Lightning electric pickup truck indefinitely, shifting its capacity in favor of internal combustion models. Stellantis reintroduced Hemi V-8 engines, although a review of the Ram 1500’s powertrain revealed that it performed worse in almost every way than the more efficient Inline-6.

However, not all automakers decided to turn back. Hyundai remains committed to electric vehicles, while sister company Kia has given $10,000 rebates to its electric vehicles across the board.