President Trump is rolling back fuel economy standards as the administration doubles down on efforts to eliminate measures aimed at driving the wider adoption of EVs.
The details: Surrounded by key executives in the auto industry, Trump announced in the Oval Office Wednesday that he would lower Corporate Average Fuel Economy (CAFE) rules established under former President Biden’s administration to make cars more affordable as the average price for a vehicle nears $50,000.
Biden’s 2024 CAFE rule aimed to raise fuel economy standards for passenger cars by about 2% per year from model years 2027–2031 (with similar increases for light trucks starting in 2029), leading to an expected fleetwide average of about 50.4 miles per gallon in 2031.
If finalized (which it likely will be), Trump’s plan would roll back Biden’s standards to a level close to the older 2022 baseline and then increase requirements by only about 0.25–0.5% per year, resulting in an average fuel economy of roughly 34.5 miles per gallon in 2031.
What they’re saying: "We're officially terminating Joe Biden's ridiculously burdensome, horrible, actually, CAFE standards that impose expensive restrictions. And all sorts of problems, all sorts of problems…for automakers,” said Trump during the conference.
Why it matters: The rollback would ease regulatory pressure on automakers in the near term, but could potentially slow investment in fuel-efficient and electric vehicles, reshape product planning, and potentially set up future clashes with states that favor stricter standards.
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But between the lines: “Today’s announcement was presented as a way to ease pricing pressures for consumers, but meaningful financial relief is unlikely to happen overnight. Product plans can take years to shift, and with the possibility of future policy reversals from new administrations, the regulatory landscape remains stop-and-start…”Jessica Caldwell, Edmunds’ head of insights emailed in a statement to CDG News.
“Although relief might not be immediate for consumers, automakers could see some short-term financial breathing room. Manufacturers have been absorbing tariff-related costs on the back of investing heavily in electrification and autonomous technologies. Easing these requirements helps at the margins, but it is unlikely to dramatically alter the broader commitments they have already made…”
Yes, and statements of support from the Detroit Three automakers, was swift—with Ford $F ( ▲ 0.53% ) CEO Jim Farley and Stellantis $STLA ( ▲ 0.09% ) CEO Antonio Filosa on hand for the announcement while GM $GM ( ▲ 0.16% ) issued a press release statement praising the rollback on fuel standards.
Bottom line: For dealers, looser CAFE rules could mean a longer runway for selling larger, less fuel-efficient vehicles and a slower, more uneven shift toward EVs—making it critical to watch how OEM product plans, state-level regulations, and consumer demand for efficiency evolve from here.
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