President Donald Trump said on Saturday that he had approved new US fuel economy standards that would roll back Biden-era requirements, setting out a major shift in policy for carmakers and the vehicles they sell.
Trump said the proposal would set an industry-wide average of roughly 34.5 mpg for light-duty vehicles by 2031. The Biden-era standards, finalised in 2024, projected an average of roughly 50.4 mpg by model year 2031. Trump’s proposed target is more than 30 percent lower.
The president presented the change as an end to what he called an electric vehicle mandate. The Biden-era rules did not require consumers to buy electric vehicles. No federal guidelines or laws require Americans to buy EVs or bar the sale of gasoline-powered vehicles.
Trump argued that the earlier standards had raised costs for automakers and consumers while pushing manufacturers towards electric vehicles. He said the new policy would bring “LOWER PRICES, saving families thousands on a new, beautiful, and safe car”.
The administration estimated that its plan would save Americans $109 billion over five years. It also said the average price of a new vehicle would fall by nearly $1,000 compared with the price consumers would pay under the Biden standards.
However, Trump did not provide the terms of the standards he said he had approved. The administration had not immediately released a final rule alongside the announcement, leaving the legal mechanism and exact requirements unclear.
The National Highway Traffic Safety Administration, or NHTSA, had estimated that its earlier proposal could reduce the average upfront price of a new vehicle by about $930. The agency also projected that the proposal could increase fuel consumption by about 100 billion gallons through 2050 and add approximately $185 billion in fuel costs.
NHTSA projected a rise in carbon dioxide emissions of around 5 per cent. Those estimates point to a trade-off between lower initial vehicle prices and higher spending on fuel over time, though the effect of the final standards cannot yet be assessed because they have not been published.
The Corporate Average Fuel Economy system, known as CAFE, was established by the US Congress in 1975. It requires automakers to achieve average fuel economy targets across the cars and light trucks they sell.
The Biden-era rules aimed to lower fuel consumption and greenhouse gas emissions. They also encouraged automakers to make more fuel-efficient vehicles and electric vehicles. Under those rules, automakers increased EV production to meet the efficiency requirements.
The rollback is expected to give manufacturers more scope to build gasoline-powered pickups and sport utility vehicles. Such vehicles generally have lower fuel efficiency and higher profit margins.
Trump said the policy would encourage manufacturing investment and jobs in states including Michigan, Ohio, Indiana and South Carolina. Federal tax credits for new, used and commercial EVs acquired after September 30, 2025 had already been ended by Congress.
The administration had signalled in August that it was preparing a substantial reduction in future fuel economy requirements. It proposed the 34.5 mpg target for 2031 in December.
Transportation Secretary Sean Duffy indicated that further details could follow soon. He wrote on X that “a major victory for America's auto workers is COMING MONDAY”.
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