Trump administration rolls back fuel economy standards

""We're officially terminating Joe Biden's ridiculously burdensome, horrible, actually, CAFE standards that impose expensive restrictions," Trump said, referring to the federal Corporate Average Fuel Economy rules, often called CAFE standards. "And all sorts of problems, all sorts of problems for automakers." Previous research from Consumer Reports has challenged the argument that regulations make cars more expensive. Stringent fuel economy standards also carry an economic benefit in the form of lower fuel costs over time."

"CAFE standards require that the entire fleet of vehicles sold by a given automaker, on average, get more fuel-efficient over time. Automakers who fall short have previously needed to either pay hefty fines, or buy credits from a company that over-performs on efficiency, like Tesla and other all-electric automakers. The Trump administration has already defanged the existing CAFE standards by eliminating the fines associated with them, as part of the One Big Beautiful Bill Act."

"Under Former President Joe Biden, the rules called for vehicles to get 2% more efficient every year; the Trump administration is now proposing to revert to the 2022 baseline and increase by .5% annually. The proposed change now enters a period of public comment; the Department of Transportation will collect input from companies and citizens before finalizing the rule. The administration has already been working to roll back tailpipe standards set by the Environmental Protection Agency, which are designed to cut pollution from vehicles."

The administration is initiating a major rollback of federal fuel economy requirements for new vehicles, shifting policy away from cleaner cars and arguing for lower consumer costs through cheaper vehicles. The proposal reduces annual fleet efficiency targets from 2% under the previous administration to a 0.5% increase and reverts to a 2022 baseline. Research indicates stronger standards can lower long-term fuel costs and do not necessarily raise vehicle prices. The administration has removed fines tied to CAFE compliance via the One Big Beautiful Bill Act and is pursuing parallel rollbacks of EPA tailpipe pollution standards. The rule is open for public comment.

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