The Trump administration finalized substantially lower federal fuel-economy requirements for gasoline-powered vehicles, saying the change will reduce new-car prices and expand consumer choice while critics warn drivers could spend more on fuel over time.
By yourNEWS Media Newsroom
The Department of Transportation has finalized a major rollback of federal fuel-economy standards, reducing the mileage automakers will be required to achieve through model year 2031 as President Donald Trump moves to reverse policies his administration says pressured manufacturers toward electric vehicles.
The National Highway Traffic Safety Administration’s final rule, formally known as the Safer Affordable Fuel-Efficient Vehicle Rule III, lowers the projected fleetwide average for new passenger vehicles and light trucks to about 34.9 miles per gallon in 2031. The Biden-era standards had been projected to reach approximately 50.4 mpg that year.
The administration is promoting the change under its Freedom Means Affordable Cars initiative. Trump highlighted the rule in a Truth Social post, sharing Reuters coverage and an accompanying graphic as the White House continues its broader affordability campaign.
DOT says the relaxed standards will reduce the average cost of a new vehicle by roughly $1,300, save Americans $138 billion over five years and encourage replacement of older vehicles with newer models. The department also projects that increased new-car purchases resulting from lower prices could prevent more than 300,000 serious injuries and save 1,900 lives. Those figures are government modeling estimates rather than observed results of the policy.
Reuters reported that NHTSA estimates automakers will save approximately $60.6 billion in technology costs through 2031, or about $1,289 per vehicle. The agency’s analysis also projects that vehicles sold under the new standards could consume about 4.6% more fuel through 2050, with additional lifetime fuel costs exceeding $1,600 per vehicle, illustrating the tradeoff between lower upfront compliance costs and greater gasoline consumption.
In its announcement of the final rule, DOT said the previous standards improperly relied on increasing electric-vehicle adoption and restricted manufacturers’ ability to respond to consumer demand.
The department described one of the changes this way:
Eliminating the Backdoor EV Mandate
Despite statutory prohibitions against even considering alternative fuel technologies such as EVs when setting standards, the Biden-Buttigieg standards were set so high that they created a backdoor electric vehicle mandate. Automakers and their hardworking employees lost billions complying with the last administration’s regulation – investing in uneconomic production lines and promising thousands of jobs that were never sustainable without massive government support and funneling millions in compliance credits to EV manufacturers. All the while, consumers were denied the choice of what is best for their needs, and families were forced to pay more for vehicles.
The rule also changes how some crossover vehicles are classified for fuel-economy purposes. Federal regulations have historically allowed many crossovers to qualify as light trucks, which generally face less stringent CAFE requirements than passenger cars. Beginning with model year 2030, NHTSA plans to revise those criteria based more heavily on a vehicle’s intended use.
DOT said:
Resetting Vehicle Classification
Prior to this rulemaking, automakers made design changes and added equipment to classify small crossover vehicles as light trucks and face less stringent fuel economy requirements, despite not being intended to haul cargo or operate off-road. This final rule will change classification criteria starting in model year 2030 to reflect each vehicle’s intended use accurately, flipping the current fleet mix of approximately 70% light trucks and 30% passenger vehicles to around 70% passenger cars and 30% light trucks.
This reclassification will eliminate the incentive to add equipment and alter designs for classification purposes, which will result in greater availability of lower-cost vehicle options for consumers. Instead, automakers will develop vehicles that meet consumer wants and needs. This could improve the US automotive export market where the current vehicle classification regulations are not compatible with foreign market needs. With the current vehicle classification, manufactures are disincentivized from making hatchbacks, wagons, and smaller footprint vehicles in general.
NHTSA is also ending the trading of CAFE compliance credits beginning with model year 2028. Automakers that exceeded federal requirements have historically been able to sell credits to manufacturers whose fleets fell short, creating a source of revenue for companies with large electric-vehicle portfolios.
The department characterized the change as follows:
Eliminating Credit Trading
NHTSA is also eliminating the CAFE credit trading program starting in model year 2028, which artificially propped up the EV industry at the expense of traditional automakers. Eliminating the credit trading program restores fairness, puts all automakers on an even playing field, and ensures that manufacturers are spreading fuel-saving technologies throughout their fleets.
The policy is part of the Trump administration’s wider effort to reduce federal incentives and mandates favoring electric vehicles and give manufacturers greater latitude to continue producing gasoline-powered cars and trucks. Automakers have generally welcomed the less stringent standards as better aligned with current consumer demand, while environmental groups argue the change will increase gasoline consumption, emissions and motorists’ long-term fuel expenses.
The shift also comes as increasingly connected vehicles raise a separate set of consumer concerns over privacy and data collection. Reporting dating to the mid-2010s documented the ability of connected-car systems to provide location and other vehicle information, while subsequent legal analysis has examined how automobile data can be accessed and used by manufacturers, law enforcement and other parties.
Modern driver-assistance systems can also monitor drivers and, in some circumstances, influence vehicle operation, as illustrated by reporting and demonstrations involving vehicle-control technology and driver-monitoring systems. Privacy researchers have raised broader questions about information that automakers’ policies may permit them to collect, including in-cabin and biometric information.
Concerns have also emerged over vehicle information reaching insurers. General Motors faced scrutiny after drivers learned that certain driving-behavior data had been supplied to data brokers and could affect insurance underwriting and premiums, prompting wider attention to how telematics information is shared. Other reports have examined motorists whose insurance rates increased after driving data was collected.
A separate 2023 examination of automaker privacy policies found that some companies reserved unusually broad rights over sensitive personal information, including categories related to sexual activity and other intimate data. Such privacy-policy provisions do not necessarily mean every vehicle actively gathers every listed category of information, but they have intensified scrutiny of the amount of data modern automobiles can generate.
The fuel-economy rule itself is focused on vehicle efficiency, cost and manufacturer compliance rather than connected-car privacy. Its central effect will be to lower the efficiency targets automakers must meet while eliminating credit trading and changing how some vehicles are classified.
For consumers, the administration is betting that lower regulatory compliance costs will translate into less-expensive new vehicles and a wider range of gasoline-powered choices. The competing consideration is that vehicles meeting the weaker standards are expected to burn more fuel over their operating lives, leaving the ultimate financial impact dependent in part on purchase prices, gasoline costs and how long owners keep their vehicles.
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