- The U.S. Department of Transportation has sharply reduced the fuel economy targets for automakers.
- Car companies now have to hit 34.9 mpg across their fleets by 2031.
- It's the latest moved aimed at reversing Biden-era policies that were addressing climate change.
The Trump administration dealt America’s electric vehicle industry another setback Monday, finalizing far less stringent Corporate Average Fuel Economy (CAFE) rules than those set during the Biden era. The ruling comes at a time when Europe, China, and much of the developing world are racing forward with EV adoption, leaving the U.S. in the rearview mirror.
Under the new standards, set by the National Highway Traffic Safety Administration (NHTSA), automakers must hit 34.9 miles per gallon across their light-duty fleets by 2031, down from the 50.4 mpg benchmark set under Biden. That's only a slight increase from the 2024 target of 30.4 mpg. Many hybrids and plug-in hybrids on sale today are already much more efficient than the new figure.
The NHTSA said the new CAFE standards would reduce the average up-front vehicle cost by $1,290, since automakers could pivot to using less expensive engine tech rather than efficiency-improving innovations and EVs. It added that the 34.9 mpg target is only an estimation and it expects real-world fuel economy to be 20-30% lower, depending on the mix of powertrain automakers actually end up selling by that time.
In an 892-page rule, the agency also acknowledged that the revised standards would dramatically increase fuel consumption and result in more harmful emissions getting pumped into the atmosphere.
By 2050, America’s gasoline consumption could increase from anywhere between 36 billion gallons (under the strictest scenario) to 128 billion gallons (the worst case scenario). A “mid-range” scenario would cause about 122 billion gallons of extra gas consumption, NHTSA said. All of this at a time when Americans feel squeezed by higher gas prices.
The environmental and public-health impacts could potentially be catastrophic, judging by the Trump administration's own analysis. The NHTSA said the final rule could cause an increase in emissions by 2035 equivalent to about 17 million additional vehicles on the road.
“Adverse health outcomes from criteria pollutant emissions are expected to increase nationwide in 2035 and 2050 under all action alternatives relative to the No-Action Alternative,” NHTSA said.
The agency added that the emissions of a harmful chemical called fomaldehyde could increase by as much as 12.6%. NHTSA also included comments from other organizations in the ruling, saying the National Resources Defense Council and some other agencies project CO2 emissions to increase by one billion metric tons by 2050.
“Higher emissions would be expected to lead to an overall increase in adverse health effects while lower emissions would be expected to lead to a decrease in adverse health effects,” NHTSA said. It added that the final ruling will cause surface temperatures to rise, in addition to higher CO2 concentrations, and rising sea levels. The impact wouldn’t just affect the U.S. but would also “occur on a global scale.”
Transportation Secretary Sean Duffy argued that the new rules will make cars cheaper.
“Thanks to President Trump’s leadership, we have finally ended the illegal mandate that forced automakers to produce more expensive electric vehicles that American families didn’t want," Duffy said.
The stricter rules did not amount to an EV mandate. But they would have nudged automakers to sell a mix of EVs, hybrids, plug-in hybrids, and more efficient combustion cars, reducing the effects of air pollution and helping car buyers save money at the pump. Transportation accounts for the largest share of greenhouse gas emissions in the U.S., and it’s directly linked to respiratory illnesses, lung disease, and other adverse health impacts.
Under the new CAFE rules, automakers are now incentivized to continue selling more gas cars, trucks, and SUVs over fuel efficient models and EVs. They join a string of other anti-EV measures the Trump administration has enacted, including terminating the $7,500 federal tax credit and eliminating the penalties automakers historically had to pay for not complying to CAFE standards. Practically speaking, the CAFE rules were already defanged before today's rollback.
The Alliance For Automotive Innovation, the lobbying group representing major automakers in the U.S. including Ford, GM, and BMW, praised the revised CAFE rules. "The standards finalized under the previous administration effectively required a switchover to electric vehicles that was out of step with market realities and customer demand," John Bozzella, the organization's president and CEO, said in a statement.
Katherine Garcia, director of the Sierra Club's Clean Transportation for All campaign, slammed the new rules. "Less fuel-efficient cars mean more gas burned, spending more at the pump, and dirtier air in our communities," Garcia said. "Americans need relief from high costs, but instead Trump is giving automakers a free pass on pollution and handing families the bill—at the pump and with their health."
The potential outcomes noted by the NHTSA are not guaranteed. Automakers could choose to sell more fuel efficient vehicles and EVs anyway, especially if demand rebounds in the coming years. There is clearly strong interest in hybrids, in particular, which hit a record share of 16.3% of the vehicle market in the second quarter despite the looser regulations.
A future administration could also reinstate more stringent fuel economy rules that encourage more EV adoption. But that could take years, and cars sold under the weaker standards will be around for decades. All the extra fuel burned and pollution created in the interim can't simply be reversed when the political tides shift.
