Trump Administration Proposes to Roll Back Fuel Economy Standards

The Trump administration on Dec. 3 announced a proposal to reset the National Highway Traffic Safety Administration’s corporate average fuel economy, or CAFE, standards for model years 2022–2031. The proposal would require automakers to reach an average fuel economy of approximately 34.5 miles per gallon by model year 2031, far below the Biden-era target of more than 50 miles per gallon. Other components of the proposal include eliminating the CAFE credit trading program beginning in model year 2028 and reclassifying crossovers and small SUVs as passenger automobiles.

The administration argues the Biden standards would have forced a major shift to EVs that consumers did not demand and driven up vehicle prices. Because EVs remain costly to produce, automakers would need to sell them at a loss and offset those costs by raising prices on gasoline vehicles. According to White House estimates, leaving those rules in place would have increased the average price of a new vehicle by nearly $1,000. The administration asserts the revised standards will avoid those increases and save U.S. families a total of $109 billion over the next five years.

The proposal, titled “Freedom Means Affordable Cars,” would eliminate the CAFE credit trading program starting in model year 2028, which, according to the administration, “artificially propped up the EV industry at the expense of traditional automakers.” Under the mechanism, automakers producing more efficient or electric vehicles could sell credits to those producing less efficient vehicles.

The proposal would require gradual increases in fuel-economy requirements. For passenger cars, the standards would rise 0.5 percent annually from model years 2023–2026, then 0.35 percent in 2027, and 0.25 percent annually from 2029–2031. For light trucks, the administration proposes a 0.5 percent annual increase from 2023–2026, a 0.7 percent increase in 2027, and a 0.25 percent annual increase from 2029–2031.

The White House describes the rollback as restoring “fidelity to the legal restrictions set forth by Congress,” asserting that the previous administration “imposed unrealistic fuel economy targets” that effectively resulted in an electric vehicle mandate.

Environmental organizations and some states have sharply criticized the plan, arguing that weaker standards will slow EV adoption, increase long-term fuel costs, and undermine climate goals. The Center for Biological Diversity called the move illegal noting that the CAFE law requires that the standards be set at the “maximum feasible” level, and that the “new weak rule ignores not just the feasibility of clean technology but the existence of millions of efficient cars on the road.”