Applause is in order for President Donald Trump as he announces the repeal of the Biden administration’s fuel efficiency standards. Alongside his ventures like selling Trump Watches and meme coins, perhaps he could consider starting Trump Motors to guide the auto industry back to making quality cars.
The Corporate Average Fuel Economy (CAFE) standards from the Biden EPA weren’t actually about fuel efficiency; they essentially pushed for electric vehicles (EVs). To clarify how the CAFE standard functioned, it’s not a requirement that every single car sold must meet a certain fuel economy. Instead, it averages the mileage across all cars sold by a manufacturer, known as a “fleet.” So, manufacturers can still sell as many gas-guzzling SUVs as they want, but to balance the fleet average, they must sell additional EVs to comply with the CAFE standard.
This may not be a problem if all cars were equally profitable, but the reality is that SUVs bring in more profit compared to smaller, fuel-efficient vehicles or EVs. Given the vast size of the auto market, if companies prioritize SUV sales, they need to counterbalance that with more small cars and EVs to keep up with the CAFE metrics. Alternatively, automakers could buy credits from each other or from EV producers, like Tesla, to offset shortfalls in their sales.
This approach isn’t sustainable for the industry. President Trump and the Republican Congress get that and are acting on it. Earlier this year, Congress repealed California’s EV mandate, while the One Big Beautiful Bill Act raised the stakes by eliminating EV subsidies and penalties for failing to meet CAFE standards. The push this week to overturn the Biden EPA’s unmanageable CAFE standards is a logical next step.
It’s a positive move, but there’s more work to do, and I think President Trump knows he’s not finished yet.
The core issue might actually be the auto industry itself. Back in the 1990s, I worked as a regulatory consultant and witnessed how the industry struggled under heavy regulations, particularly from the EPA. No one wanted to cross Michigan Congressman John Dingell, famously known as the “Congressman from General Motors.”
As time went on, however, Mr. Dingell’s stance shifted. Rather than resisting government directives, the auto industry found it politically expedient and potentially profitable to just comply and pass the added costs to consumers. This approach is one reason why cars are so pricey today.
The strategy ended up backfiring for everyone involved. Before the 1970s energy crisis, people typically bought a new car every five years. Now the average age of vehicles on the road is nearly 13 years. High prices for new cars are pushing consumers toward the used car market, but even used cars aren’t affordable anymore.
The situation worsened with the 2008-2009 financial crisis when General Motors received substantial bailout funds through the Troubled Asset Relief Program (TARP). This resulted in GM being dubbed “Government Motors.” While Ford avoided TARP, it faced its own challenges, as its management seemed overly focused on unsupported narratives about climate change while overseeing a major auto brand. This led to the costly rollout of EVs during Biden’s administration, along with substantial losses for GM and Chrysler in the EV sector.
Now, President Trump is looking to aid the auto industry in recovering. To some extent, the industry appears eager for this support. However, one could imagine that if a Democrat were in the White House in 2029, the industry might readily agree to stringent CAFE standards and EV mandates again, all in a bid for favor with those in power.
To make the MCGA vision a reality, President Trump must ensure that any changes to EPA rules are finalized well ahead of the 2028 elections, which are pivotal for Republicans. Additionally, a Republican Congress needs to eliminate the laws governing CAFE standards and penalties altogether—essentially making them impossible to reinstate.
The U.S. auto industry should also embrace some healthy competition. We could really use new American manufacturers that focus on building attractive, high-performing cars that people genuinely want to drive. The established American companies seem to have lost their direction lately.
So, how about Trump Motors?
