The fuel economy standards finalized by former President Joe Biden last year are facing a proposal for significant cuts by current U.S. President Donald Trump. This move is aimed at easing the sale of gasoline-powered vehicles by automakers. Trump expressed that there is a demand for gasoline cars, contrary to Biden’s push for more electric vehicle purchases.
The National Highway Traffic Safety Administration (NHTSA) is suggesting a notable decrease in fuel economy requirements from model years 2022 to 2031. The proposal includes reducing the average fuel efficiency to 34.5 miles per gallon by 2031, down from the previously set 50.4 miles per gallon.
Under Biden, NHTSA had increased fuel efficiency annually by 8% for model years 2024-2025 and 10% for 2026. The intention was to encourage automakers to produce more electric vehicles without an immediate ban on gasoline-powered cars.
NHTSA estimates that the proposed rule could lead to a $930 reduction in upfront vehicle costs for consumers but would result in an increase of around 100 billion gallons in fuel consumption by 2050. This could potentially cost Americans an additional $185 billion for fuel and raise carbon dioxide emissions by approximately 5%.
The proposal includes adjustments to the program such as the elimination of credit trading among automakers by 2028 and the discontinuation of some credits for fuel-saving features. NHTSA criticized credit trading as favoring EV-exclusive manufacturers at the expense of non-EV manufacturers.
California Governor Gavin Newsom criticized Trump’s proposal, stating that it would force Americans to spend more on fuel while worsening air quality in communities. The transportation sector is a significant contributor to greenhouse gas emissions in the U.S.
The changes proposed by Trump could have significant impacts on the automotive industry, affecting automakers like Tesla and Rivian, who have benefited from credit trading. Ford CEO Jim Farley supported the proposal, emphasizing the importance of affordability and consumer choice in vehicle purchasing decisions.
Despite Trump’s claims of declining vehicle prices, recent data shows a 0.8% year-over-year increase in new vehicle prices. General Motors CEO Mary Barra highlighted the challenges faced by the auto sector in meeting state requirements for EV sales.
The agency projects that the proposed rule could result in an increase in vehicle emissions equivalent to the annual emissions of 7.7 million vehicles compared to the Biden proposal. The Trump administration’s actions have been critiqued for favoring the oil industry and imposing higher costs on consumers at the pump.
