The Trump administration announced plans on Wednesday 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 rolling back fleet-wide fuel economy to 34.5 miles per gallon for 2031 model-year vehicles. This replaces the previous standard, set under the Biden administration, which mandated 50.4 mpg by 2031. The regulation change also reclassifies crossovers as cars instead of light trucks and eliminates automakers’ ability to trade electric vehicle credits.
Fuel economy rules are regulated by the National Highway Traffic Safety Administration under Corporate Average Fuel Economy Standards. These rules, first enacted by Congress in 1975, dictate how far vehicles must travel on a gallon of fuel. In 2024, automakers had to average 30.1 mpg across their fleets but exceeded that requirement, delivering 35.4 mpg according to official calculations.
President Trump also said he would authorize the Department of Transportation to allow automakers to manufacture very small cars, similar to those found in Japan and South Korea.
The White House claims that the existing regulations would have increased automotive prices by one thousand dollars per vehicle. The previous Trump administration made the same argument in 2020 when it last rolled back fuel economy standards. However, since that rollback, the average price of a new vehicle has climbed to new heights, topping fifty thousand dollars. This increase occurred as automakers discontinued low-end models to capitalize on consumer preference for SUVs. Larger vehicles use more material, thus costing more to make, while also achieving lower fuel economy.
Consumer choices appear to run counter to the administration’s contention that lower fuel economy standards are in the public’s interest. For instance, hybrid sales have increased significantly this year compared to last, with momentum continuing. Hybrid sales grew six percent in October over the previous month.
Experts doubt that lower fuel economy standards will change the trajectory of new vehicle prices. Many vehicles are developed for global markets, most of which still value efficiency. Gina McCarthy, a former EPA administrator, stated that this move cedes the global car market and technological innovation to China, forcing Americans to pay more for gas and produce more emissions.
Since the passage of the One Big Beautiful Bill Act this summer, which eliminated penalties for automakers that miss their targets, fuel economy standards have been essentially toothless. The regulatory move is likely intended to serve as a hurdle for future administrations seeking to reinstate stricter rules.
Automakers have already been moving to sell more gas-guzzling vehicles. Ford has indefinitely paused production of its electric F-150 Lightning pickup truck, shifting capacity to internal combustion models. Stellantis reintroduced its Hemi V-8 engines, though reviews indicate the powertrain performs worse in nearly every way than a more efficient inline-6 engine.
Not all automakers have decided to turn back. Hyundai remains committed to electric vehicles, while its sibling brand Kia has offered substantial discounts across its EV lineup.