President Donald Trump announced on Wednesday that his administration would be re-evaluating the Corporate Average Fuel Economy (CAFE) standards established under President Biden, which had led to increased car prices.
Trump, alongside Transportation Secretary Sean Duffy, made the announcement in the Oval Office, flanked by Republican lawmakers and leaders from the auto industry.
“We’re officially repealing Joe Biden’s overly burdensome and frankly ridiculous CAFE standards that impose costly restrictions and create all sorts of issues for automakers,” Trump stated.
The President mentioned that these standards set by the previous administration impacted both domestic and foreign car manufacturers in the U.S. market, as well as consumers.
“It’s not just about here—this affects things globally too, because no one could handle it. It was just ridiculous and very expensive,” he added.
He continued, “Coupled with the crazy electric vehicle mandates, this has dramatically increased car prices. Mr. Biden’s heavy regulations have caused car prices to rise by more than 25%, and in some instances, by 18% in just a year.”
In April 2022, the Biden Department of Transportation, under then-Secretary Pete Buttigieg, announced plans to enhance fuel efficiency by 8% for the 2024 and 2025 model years of cars and light trucks, with an additional 10% for models in 2026.
Then in June 2024, DOT announced a rule to boost fuel efficiency by 2% annually for passenger vehicles from 2027 to 2031 and by 2% each year for light trucks from 2029 to 2031.
A fact sheet from the Trump administration claimed that Buttigieg and the Biden administration “broke the law by exceeding the requirements set by Congress” when the CAFE program was originally established.
It further indicated that this reset aligns CAFE standards with those mandated by Congress.
Duffy remarked that the actions taken by the current administration are clear evidence that the Democratic claim that “affordability is a lie” is itself untrue.
He noted that while the Biden administration has set a requirement of 62 miles per gallon for electric and hybrid vehicles, automotive companies maintain that achieving this is utterly unrealistic. This leads to massive investments in technology only to meet standard that are nearly impossible, ultimately driving up car prices. Failing to meet these unattainable targets could also mean incurring carbon costs worth billions, which further elevates prices.
Duffy also noted that Democrats aren’t really making cars more affordable—they’re just shifting the paradigm a bit.
He asserted that this reset will give more Americans access to new vehicles, saying a side benefit would also be enhanced safety through the latest auto technologies. He underscored that this is a significant win for free market principles.
“These regulations will allow automakers to produce the vehicles that Americans actually want, rather than those Joe Biden or Buttigieg think they should make. That’s essential,” Duffy elaborated.
“And it’s critically important for American jobs. The more cars we sell, the more jobs we can create in this country. This is about jobs, freedom, and common sense,” he emphasized.
Ford CEO Jim Farley called this move a “win for common sense and affordability.”
Stellantis CEO Antonio Filosa mentioned that the new CAFE standards now align better with what customers are actually seeking.
“Today marks a significant step for Stellantis since we see that CAFE regulations now meet real customer expectations,” he stated.
It’s worth noting that President Trump had previously rescinded Obama-era fuel efficiency standards during his first term.
