The Trump administration said on Wednesday it plans to lower federal fuel economy standards for cars and light trucks sold in the United States, reversing targets introduced under the previous administration and reshaping long-term regulatory expectations for automakers.
Speaking with executives from Ford Motor and Stellantis in attendance, President Donald Trump proposed setting fleet-wide fuel economy at 34.5 miles per gallon for 2031 model-year vehicles, down from the 50.4 mpg target finalised under the Biden administration. The proposal also reclassifies crossovers as passenger cars rather than light trucks and removes automakers’ ability to trade electric vehicle credits under the Corporate Average Fuel Economy (CAFE) programme.
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Fuel economy rules are overseen by the National Highway Traffic Safety Administration under CAFE standards, which were first enacted by Congress in 1975. Automakers were required to average 30.1 mpg across their fleets in 2024 and exceeded that benchmark with an average of 35.4 mpg, based on official calculations.
Trump also said the Department of Transportation would be authorised to let automakers produce very small vehicles similar to those commonly sold in Japan and South Korea. The White House said stricter fuel economy rules would have raised vehicle prices by about $1,000 per unit, echoing arguments made during the previous rollback of standards in 2020.
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Industry analysts and environmental experts said the new proposal is unlikely to reverse current pricing trends, noting that automakers develop many models for global markets that continue to prioritise efficiency. “The rest of the world will continue to innovate and create cleaner cars that people want to buy and drive, while we’re forced to sit in our clunkers, paying more for gas, and pumping out more tailpipe emissions,” Gina McCarthy, a former administrator of the Environmental Protection Agency, said in a statement.
The regulatory change follows passage of the One Big Beautiful Bill Act earlier this year, which removed financial penalties for automakers that fail to meet CAFE targets. Some manufacturers have already adjusted their product strategies, with Ford pausing production of its electric F-150 Lightning pickup and Stellantis reviving its Hemi V-8 engines, while others such as Hyundai and Kia have continued to promote electric vehicle sales through incentive programmes.
Source: TechCrunch
