The Trump administration has announced plans to roll back vehicle fuel efficiency standards established under the previous administration, with President Trump declaring the termination of what he called “ridiculously burdensome” regulations.
The Corporate Average Fuel Economy (CAFE) standards, set by the Transportation Department, establish minimum fuel efficiency requirements that automakers’ fleets must meet. Under the Biden-era standards, the US vehicle fleet was expected to reach 50.4 miles per gallon (4.7L/100km) by model year 2031.
The Trump administration now proposes reducing that target to 34.5 miles per gallon (6.8L/100km) for the same period, representing a significant scaling back of emissions reduction efforts.
“We’re officially terminating Joe Biden’s ridiculously burdensome — horrible, actually — CAFE standards that impose expensive restrictions and all sorts of problems,” Trump said at a White House event attended by Republican lawmakers and representatives from Ford, Stellantis and General Motors.
Transportation Secretary Sean Duffy said the changes would save families an average of US$1,000 (AUD$1,600) on the cost of a new vehicle. The Biden administration had previously claimed its rules would save families US$600 (AUD$960) in fuel costs over vehicle lifetimes and prevent more than 710 million metric tons of carbon dioxide emissions while saving almost 70 billion gallons (265 billion litres) of gasoline through 2050.
Industry welcomes flexibility
The automotive industry has largely welcomed the proposed changes, citing challenges with the previous administration’s ambitious targets.
“We’re reviewing the National Highway Traffic Safety Administration’s announcement, but we’re glad the agency has proposed new fuel economy standards,” said John Bozzella, president and chief executive of the Alliance for Automotive Innovation.
“The current CAFE rules finalised under the previous administration are extremely challenging for automakers to achieve given the current marketplace for EVs,” he said.
National Automobile Dealers Association Chairman Tom Castriota, who attended the White House announcement, told Trump the actions would “definitely save our customers money” and praised the president for letting “the consumer buy what they want.”
Under the new proposal, automakers would revert to model year 2022 standards and increase efficiency by 0.5% annually through model year 2026, then 0.25% per year thereafter. This compares to the Biden administration’s requirements of 8% improvements for 2024-2025, 10% for 2026, and 2% annually from 2027-2031.
Environmental groups criticise rollback
Environmental organisations and Democratic politicians have strongly criticised the decision, arguing it represents a major setback in climate action efforts.
“The biggest single step any nation has ever taken to cut global warming pollution, gas consumption and save consumers money at the pump are the CAFE standards and the EPA standards, and that’s what Trump is gutting today,” said Dan Becker, director of the Centre for Biological Diversity’s safe climate transport campaign.
California Governor Gavin Newsom described the move as “handing Big Oil donors exactly what they want: weaker protections for consumers and bigger profits for polluters.”
The standards were expected to drive significant market shifts toward electric vehicles, and their rollback could slow EV adoption in the world’s second-largest automotive market.
The proposed rule will undergo a review and finalisation process that could take several months before implementation.
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