Trump Administration Proposes Rollback of Vehicle Fuel Economy Standards

On December 4, 2025, President Donald Trump announced a proposal to significantly roll back U.S. vehicle fuel economy standards, aiming to reduce the industry-wide average fuel efficiency target for light-duty vehicles from approximately 50.4 miles per gallon (mpg) by 2031, as set during the Biden administration, to 34.5 mpg. The administration argues that easing these regulations will make automobiles more affordable and better aligned with consumer demand for gasoline-powered vehicles.

The Corporate Average Fuel Economy (CAFE) standards were established in 1975 to improve the average fuel efficiency of cars and light trucks produced for sale in the United States. Over the years, these standards have been periodically updated to reflect technological advancements and environmental considerations. In 2024, the Biden administration set ambitious targets aiming for an industry-wide average of 50.4 mpg by 2031, intending to reduce greenhouse gas emissions and promote the adoption of electric vehicles (EVs).

President Trump's proposal seeks to lower the fuel efficiency target to 34.5 mpg by 2031. The administration contends that the previous standards were unrealistic and imposed undue financial burdens on both manufacturers and consumers. Transportation Secretary Sean P. Duffy stated that the new "Freedom Means Affordable Cars" initiative aims to reset the National Highway Traffic Safety Administration's (NHTSA) CAFE standards, asserting that the prior administration's rules effectively resulted in an EV mandate that consumers did not request.

Major automakers have expressed support for the proposed rollback. Ford CEO Jim Farley remarked, "Today is a victory of common sense and affordability. We're very proud of Ford to be the number one auto producer in our country... We believe that people should be able to make a choice." Stellantis CEO Antonio Filosa indicated a strategic shift towards traditional hybrid vehicles over fully electric models, aligning with the administration's stance.

Environmental organizations have strongly criticized the proposed rollback, warning of increased greenhouse gas emissions and air pollution. The NHTSA estimates that the rollback could lead to an additional 100 billion gallons of fuel consumption and a 5% increase in carbon dioxide emissions by 2050. The American Council for an Energy-Efficient Economy (ACEEE) estimates that the administration’s action will add at least 131 million metric tons of carbon dioxide to the air annually by 2035 and increase U.S. fuel consumption by 11.7 billion gallons per year.

The administration argues that the rollback will reduce vehicle costs, making new cars more affordable for consumers. However, analyses suggest that while upfront costs may decrease, the long-term expenses due to increased fuel consumption could outweigh initial savings. The NHTSA projects that the rollback would reduce upfront vehicle costs by $930 but also estimates an added $185 billion in fuel costs for Americans by 2050.

This is not the first time fuel economy standards have been a point of contention. Previous administrations have adjusted these standards in response to economic, environmental, and technological factors. The current proposal represents a significant shift from the previous administration's policies, emphasizing consumer choice and affordability over environmental considerations.

The proposed rollback of fuel economy standards has sparked a complex debate, balancing economic interests with environmental and public health concerns. As the administration moves forward with this initiative, stakeholders from various sectors will continue to weigh in on the potential impacts, shaping the future landscape of the automotive industry and environmental policy in the United States.