Trump Administration to Relax Federal Fuel Economy Standards
The Trump administration is set to roll back federal fuel economy regulations for cars and trucks, reversing stricter standards that were implemented when Joe Biden was in office.
Transportation Secretary Sean Duffy noted on Monday that new standards will be announced soon, and they are likely to considerably reduce the mileage requirements that automakers are expected to meet.
A proposal released by NHTSA in December suggested an average fuel economy of around 34.5 miles per gallon (mpg) for passenger vehicles and light trucks by the 2031 model year, a significant drop from the roughly 50.4 mpg aimed for under the Biden administration’s guidelines.
While speaking in Michigan, Duffy emphasized the need for Detroit manufacturers to focus on producing vehicles that align with what consumers want rather than following federal directives.
“We are on the verge of announcing a more practical fuel economy standard because we want Detroit to create cars that Americans actually wish to buy — rather than the ones that Democrats want Washington to impose,” Duffy remarked.
The December proposal would also lower the standard initially set for 2022 and only mandate minor annual increases of 0.25 to 0.5 percent up to 2031.
During the Biden administration, the efficiency requirements were significantly stricter, with expectations for an eight percent increase for model years 2024 and 2025, then ten percent in 2026, followed by a two percent yearly increase from 2027 through 2031. These rules aimed, in part, to incentivize automakers to shift toward electric vehicle sales.
Adjusting the 2022 standard might provide manufacturers with extra compliance credits for future standards.
NHTSA has estimated that the relaxed rules could lower the price of new vehicles by approximately $930. However, this change might also lead to an increase of around 100 billion gallons of fuel consumption through 2050, raise fuel costs by $185 billion, and increase carbon dioxide emissions by about five percent.
In a further move, Congress acted in 2025 to remove penalties for automakers that fail to meet federal mileage standards, eliminated the $7,500 tax credit for electric vehicles, and revoked California’s authority to ban new gasoline-powered vehicle sales starting in 2035. California is currently contesting this decision.
