The Trump administration has slashed the projected 2031 US fuel-economy fleet average for new cars and light trucks from 50.4 miles per gallon to 34.9 mpg, a move officials say will make vehicles cheaper even as petrol prices climb during the war with Iran.
The final rule, announced on Monday by the National Highway Traffic Safety Administration (NHTSA), is presented by the government as a boost to affordability. The administration says the change will cut the average cost of a new vehicle by about $1,300, while environmental groups argue it will mean higher fuel consumption and increased pollution.
US Transportation Secretary Sean Duffy said the administration had 'ended the illegal mandate that forced automakers to produce more expensive electric vehicles that American families didn't want'.
No federal law required automakers to sell electric vehicles. Mr Biden's goal of having half of all new vehicle sales be electric by 2030 was a target, not a legal requirement.
What the Trump Fuel-Economy Rule Changes
Corporate Average Fuel Economy (CAFE) standards, in place since 1975, set how far new cars and light trucks must travel on a gallon of petrol. The Biden-era rules were set to tighten steeply through 2031, which gave EVs an indirect boost.
The new rule rewrites standards for model years 2022 to 2031. It also ends trading of compliance credits between manufacturers from 2028, while the 34.9 mpg figure is higher than the roughly 34.5 mpg NHTSA proposed in December.
NHTSA describes the figure as a projection, because the actual standards vary with the mix of vehicles manufacturers sell. It says real-world fuel economy is generally 20 to 30 per cent lower.
The administration claims the looser standards will save Americans $138bn over five years. However, NHTSA's analysis projects that the rule would result in about 122 billion additional gallons of gasoline and diesel being consumed through 2050.
Petrol Prices, Pollution and Industry Reaction
The rule came days after Mr Trump rejected an Iranian proposal to reopen the Strait of Hormuz, a key route for global oil shipments. US petrol averaged $4.47 a gallonon Monday, according to AAA, up from $3.13 a year earlier.
Dan Becker, director of the Center for Biological Diversity's Safe Climate Transport Campaign, accused the administration of wilfully ignoring 'the feasibility of clean technology and the millions of fuel-efficient cars already on the road'.
'Trump is tanking sensible mile per gallon standards at the worst possible time for consumers,' he said. He added that drivers would 'pay the price for these reckless rollbacks while Trump's Big Oil and Big Auto buddies reap the short-term profits'.
Katherine García, of the Sierra Club's Clean Transportation for All campaign, warned that 'less fuel-efficient cars mean more gas burned, spending more at the pump, and dirtier air in our communities'. She promised a fight over the rule.
Transport accounted for about 28 per cent of US greenhouse gas emissions in 2022, according to the latest government estimate.
Carmakers Back Lower Fuel-Economy Target
John Bozzella, president of the Alliance for Automotive Innovation, said NHTSA had 'made the right call to better align fuel economy standards with the law and current market conditions'. He said the old rules 'effectively required a switchover to electric vehicles that was out of step with market realities and customer demand'.
Ford, General Motors and Stellantis issued statements supporting the aim of aligning regulations with buyer demand. They said they were still studying the detail.
Mr Trump has also loosened tailpipe emissions standards, scrapped higher fines for manufacturers that miss mileage targets and ended consumer tax credits of up to $7,500 for EV buyers. EVs made up 5.7 per cent of new vehicle sales in August, according to Cox Automotive, down from 7.4 per cent across 2025, according to Edmunds.
The average transaction price for a new vehicle was $50,089, according to Kelley Blue Book.
