Trump administration lowers fuel economy requirements

What the new rule changes

The Trump administration on Monday unveiled lower federal fuel economy standards for cars and trucks. The National Highway Traffic Safety Administration estimates the standards will result in a fleetwide average of 34.9 miles per gallon by model year 2031, down from the 50.4 mpg projected under the Biden administration’s rules.

Corporate Average Fuel Economy standards, created by Congress in 1975, set mileage requirements for light-duty vehicles and for medium- and heavy-duty trucks. The requirements have led automakers to gradually increase average vehicle efficiency over time.

The Department of Transportation said the new rule will reduce the average upfront price of a new vehicle by and save Americans billion over five years. It also said automakers will have more flexibility over the types of vehicles they produce.

Cost claims draw differing views

The rule arrives as drivers face higher fuel prices. The national average gasoline price was per gallon Monday, compared with less than earlier in the year, as the war with Iran disrupted global fuel flows.

Auto industry representatives offered different assessments of the rule’s effects. Alliance for Automotive Innovation CEO John Bozzella supported the change, saying the previous standards did not match consumer demand or market conditions.

Patrick Anderson, CEO of Anderson Economic Group, said the change could lower automakers’ costs by better aligning production with demand. He called the administration’s estimate of in upfront savings achievable.

Other industry experts questioned whether those savings would reach buyers. CarEdge co-founder Ray Shefska said automakers would have little reason to lower prices while sales and profit margins remain strong. Kelley Blue Book managing editor Sean Tucker said vehicle development moves too slowly for manufacturers to make major design changes in response to a rule that could later be reversed.

As of August, Kelley Blue Book put the average new-car price at and the average electric-vehicle price at.