The Trump administration plans to sharply lower vehicle fuel economy standards, scaling back a prior regulatory push to accelerate electric vehicle adoption and reduce fossil fuel use. Transportation Secretary Sean Duffy announced the impending revision, which replaces stricter targets with a fleetwide average of 34.5 miles per gallon by 2031.
Reversing Prior Fleet Standards
The upcoming federal fuel economy standard marks a sharp pivot from the regulatory framework established under former President Joe Biden. Under the prior administration, fuel efficiency requirements were pushed significantly higher to curb U.S. greenhouse gas emissions and accelerate a transition toward clean-energy manufacturing. That framework required automakers to increase fuel efficiency for cars by 8% annually for model years 2024 and 2025, 10% for 2026, and 2% annually from 2027 through 2031, culminating in a fleetwide average of 50.4 miles per gallon by 2031.
By contrast, the National Highway Traffic Safety Administration proposed a fleetwide average of 34.5 miles per gallon by 2031, down from the Biden administration’s 50.4 miles per gallon benchmark. While the Republican administration has not yet published the finalized standard, major automakers anticipate a rule closely mirroring that December proposal.
The Policy Rationale and Michigan Announcement
Transportation Secretary Sean Duffy outlined the policy shift during an appearance in Michigan, framing the upcoming rules as a response to consumer demand rather than regulatory mandates. We are about to announce a common-sense fuel economy standard because we want Detroit to build cars that Americans want to buy — not cars that Democrats want Washington to build,
Duffy said.
Federal authorities also rescinded California’s authority to outlaw gasoline-powered vehicles by 2035, a decision the state is currently challenging.
Compliance Adjustments and Past Model Years
The administrative shift also alters how automakers account for past compliance. The National Highway Traffic Safety Administration proposed retroactively revising down the 2022 fuel economy standards before raising requirements between 0.25% and 0.5% annually through 2031.
Because vehicle manufacturers earn compliance credits by exceeding prior model-year efficiency targets, the retroactive reduction for 2022 makes it significantly easier for companies to clear future regulatory hurdles. Biden’s rules had leveraged climbing fuel-efficiency targets to prod automakers into expanding their electric vehicle lineups.
Projected Costs and Environmental Tradeoffs
The policy adjustments carry clear economic and environmental tradeoffs detailed in regulatory assessments. Federal estimates indicate that cutting new vehicle costs by $930 each will come alongside a substantial increase in resource consumption. Over the long term, the relaxed standards are projected to increase fuel consumption by roughly 100 billion gallons through 2050, raise fuel spending by $185 billion, and increase carbon dioxide emissions by about 5%.
