The new corporate average fuel economy (CAFE) standards proposed by President Trump could impact the auto market, with both automakers and consumers feeling the effect, according to S&P Global.
The details: A report by the insights company lays out the potential effects of the newly announced National Highway Traffic Safety Administration (NHTSA) fuel economy regulations, which the Trump administration said will help address affordability concerns.
The new rules don’t account for battery electric vehicle (BEV) adoption on fuel economy—keeping intact the automakers’ ability to use alternative-fuel vehicles to help achieve compliance.
NHTSA’s proposal would move utility vehicles (CUVs and SUVs) from light trucks to passenger vehicles, making compliance more difficult in both sectors.
The rules, if finalized, would remove the pathway to light-truck classification, which would reclassify minivans and likely most unibody three-row utility vehicles from light truck to passenger car.
NHTSA’s new proposal also assumes the current $0 fine for non-compliance, which means there’s no real motivation for automakers to comply or hit the designated goals for the CAFE standards.
Why it matters: Looser effective enforcement on CAFE targets may keep larger ICE vehicles in the mix longer—but the proposal could reshape product plans, pricing, and incentives over the next several years—especially for crossovers, SUVs, and minivans that might be reclassified.
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Between the lines: The new CAFE rules intend to roll back stiffer standards implemented under former President Joe Biden’s administration, and could impact automakers and consumers in several ways if enacted.
Any potential affordability relief isn’t likely until 2028, given that vehicles planned for 2026 and 2027 model years are pretty much already determined.
Automakers’ ability to meet the less stringent fuel economy targets, likely without BEVs, could slow electric vehicle efforts even more.
Easing fuel standards could increase the overall cost of owning a car due to higher fuel and maintenance costs associated with internal combustion engine (ICE) vehicles.
What they’re saying: “Other industry factors provide headwinds to improving vehicle affordability,” writes S&P Global’s associate director of AutoIntelligence, Stephanie Brinley, author of the report. “Among them are incremental safety features, connectivity and software technology and continued adjustment to a high automotive tariffs environment.”
Bottom line: Dealers should view the proposed CAFE changes as a long-lead shift, not an immediate pricing fix—using the next few years to tighten their mix of SUVs and crossovers, refine fuel-economy and cost-of-ownership messaging in the showroom, and stay closely aligned with OEM product and compliance strategies as regulations, tariffs, and consumer expectations continue to evolve.
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