Trump Announces Changes to Fuel Economy Standards
President Donald Trump has revealed plans to repeal and replace the Corporate Average Fuel Economy (CAFE) standards set by the Biden administration. These standards had required automakers to achieve an average of about 50 miles per gallon for passenger cars and light trucks by 2031.
The new proposal resets the baseline to 2022 and mandates only a 0.5% annual improvement in efficiency. This is a significant reduction from Biden’s previous requirement of 2% annually, resulting in a projected average of 34.5 mpg by 2031.
During a White House event, Trump highlighted that this measure could save consumers up to $109 billion over five years by cutting compliance costs for manufacturers. However, environmental advocates have criticized the move, claiming it could lead to increased fuel consumption and carbon emissions.
“We are officially ending Joe Biden’s ridiculously burdensome, horrific, and actually expensive restrictive cafe standards,” Trump stated enthusiastically during the announcement.
CAFE standards dictate how far a vehicle must travel on a gallon of gasoline. The rollback decreases the mileage requirement to about 34.5 mpg, down from the Biden administration’s 50.4 mpg target.
The new bill also intends to eliminate credit programs that allow automakers to pay compliance credits to fuel-efficient companies, a practice the Trump administration views as propelling the electric vehicle industry unnecessarily.
A fact sheet from the White House argued that the new standards will bring requirements back to achievable levels for traditional gasoline and diesel vehicles. It labeled the previous goals as “unrealistic” and claimed they would pressure consumers towards a widespread switch to electric vehicles, ultimately raising costs.
“Because EVs are so expensive to manufacture, automakers must sell them at a loss and compensate by significantly raising the price of gasoline-powered vehicles,” the fact sheet explained.
Following the announcement, Ford CEO Jim Farley commended Trump, expressing gratitude for aligning the fuel efficiency standards with market realities.
“We can make real progress on carbon emissions and energy efficiency while offering customers choice and affordability,” he said.
In his remarks, Trump disclosed that $70 billion is now being injected into the American auto industry, with Ford, Stellantis, and General Motors unveiling significant manufacturing expansions and new projects in the U.S.
