The Trump administration has officially proposed a major overhaul of federal auto regulations. This new plan drastically rolls back Trump fuel economy standards, dismantling rules finalized by the previous leadership. The move aims to reduce regulatory pressure on automakers that produce gasoline-powered vehicles.
On Wednesday, the National Highway Traffic Safety Administration (NHTSA) released the details. The proposal significantly lowers efficiency requirements for vehicle models from 2022 through 2031. Under this new framework, the fleet-wide average drops to 34.5 miles per gallon by 2031. This represents a sharp decrease from the previously mandated 50.4 miles per gallon.
Drastic Cuts to Efficiency Goals
The regulatory shift involves retroactively lowering standards for 2022. Furthermore, the plan proposes minimal annual efficiency increases of just 0.25% to 0.5% through the decade.
This approach contrasts sharply with the previous roadmap. That plan enforced aggressive annual hikes of 8% to 10%. Officials estimate this relaxation will lower the upfront cost of new vehicles by roughly $900.
However, the agency admits there is a trade-off. Cheaper sticker prices will likely lead to significantly higher fuel consumption nationwide. By lowering past benchmarks, the administration also makes it easier for car companies to achieve compliance.
Ending the EV Credit System
The proposal also seeks to reshape the auto industry’s financial landscape. Specifically, it aims to eliminate the credit trading system among automakers by 2028. Additionally, it plans to phase out credits awarded for certain fuel-saving technologies.
For years, exclusive electric vehicle (EV) manufacturers generated revenue by selling these regulatory credits. Traditional automakers purchased them when they missed efficiency targets. Regulators have now labeled this practice a “windfall” for EV makers. This signals the end of a system that effectively subsidized electric car companies at the expense of their gas-reliant rivals.
Automakers Cheer as Critics Warn of Costs
Legacy automakers have embraced the new Trump fuel economy standards. President Donald Trump is set to promote the plan alongside CEOs from major manufacturers, including Ford and Stellantis.
Industry executives argue the pivot aligns standards with “market realities.”
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Ford: Leaders stated the changes allow for emissions progress while preserving consumer choice.
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General Motors: Leadership warned that prior mandates created unrealistic EV sales targets.
Conversely, environmental advocates argue the policy shifts costs to consumers. Critics contend that while car prices may drop slightly, drivers will pay hundreds more annually at the pump. They believe this shift benefits the oil industry while harming the public. Previously, standards were projected to cut gasoline use by over 200 billion gallons through 2050.
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