U.S. finalizes fuel economy goals to 50 MPG by 2031

The U.S. Department of Transportation (USDOT) finalized new vehicle fuel economy standards, also known as the Corporate Average Fuel Economy (CAFE) rules for model year 2027–2031 vehicles. 

Why it matters: CAFE standards are a crucial piece of Biden’s climate change policy and his administration’s goals of curbing U.S. greenhouse gas emissions. 

In the final rule, the average fuel economy of passenger cars will increase by 2% per year for model years 2027–2031. Light trucks will increase 2% per year for model years 2029–2031.

• All said and done, automakers must achieve an average light-duty vehicle fuel economy of up to approximately 50.4 miles per gallon by model year 2031.

• USDOT claims this will save passenger car and light truck owners “more than $600 in fuel over the lifetime of their vehicles.”

• Heavy-duty pickup trucks and van fleets will have to achieve 35 miles per gallon by model year 2035.

The intrigue: These standards are estimated by USDOT to save 70 billion gallons of gasoline through 2050 and reduce 710 million metric tons of CO2 emissions.

Key quote: “When Congress established the Corporate Average Fuel Economy program in the 1970s, the average vehicle got about 13 miles to the gallon. Under these new standards, the average light-duty vehicle will achieve nearly four times that at 50 miles per gallon,” NHTSA Deputy Administrator Sophie Shulman said.

Big picture: In what some are calling a political compromise, President Biden rolled back these standards from what he initially proposed in 2022. Back then, he was aiming for 55 miles per gallon by 2026, a far cry from what we see today. 

Yet, these standards will have a big impact on automaker lineups in the coming years. GM CEO Mary Barra said recently that compliance with the new standards is a big reason why the OEM is committed to an all-electric future someday.

Zoom in: Many argue that is the exact problem with the new CAFE standards. Critics say these rules are another way for the Biden Administration to push electric vehicles on consumers, whether they want them or not. Others say Biden bowed to automaker pressure by relaxing the rules and missed an opportunity to crack down harder on emissions. 

Become an automotive insider in just 5 minutes.

Get the weekly email that delivers transparent insights into the car market.

Join 64,000 others now, it's free:

Connecting world-class talent with top-notch companies in Automotive.

Great career opportunities are hard to find. We make it easier. Search through open roles or submit your resume confidentially on the CDG Jobs Board. Best part? It’s 100% free.

Here are some standouts for anyone looking for their next move.

• Looking for a cutting-edge SaaS company? Impel is seeking a Specialty Sales Manager and a Customer Success Manager.

• Have a background in sales? OPENLANE is looking for Market Sales Managers across the country.

• Prefer to be at the dealership? Nissan of Everett is looking for a full-time Automotive Technician near Everett, WA.