The Trump administration finalized new fuel efficiency requirements for American vehicles that reverse rules put in place by the Biden administration. The revised rules cover model years 2022 through 2031 and project a fleetwide average of 34.9 miles per gallon in model year 2031. The move is part of a broader effort by the Trump administration to roll back climate policies that were introduced during the Biden presidency.
Transportation Secretary Sean Duffy said the change will help reduce vehicle prices for American consumers, according to NPR. The administration estimates that these changes could save buyers around $1,300 on average when purchasing a new car.
The new rules also eliminate inter-manufacturer trading of CAFE compliance credits starting in model year 2028. The previous system allowed manufacturers with deficits to buy credits from companies with surpluses including electric vehicle makers.
The National Highway Traffic Safety Administration (NHTSA) opened a public comment period before finalizing the rule.
The Alliance for Automotive Innovation praised the reduced standards as better aligned with current market conditions. Earlier this year the trade group had also asked NHTSA not to eliminate credit trading and to reconsider proposed changes in vehicle classifications.
The Department of Transportation claims the new standards could save Americans up to $138 billion over five years. Economists warn that these changes may slow progress toward more fuel-efficient and electric vehicles in the long term. Sue Helper from Case Western Reserve University said the policy could make American automakers less competitive globally.
The CAFE standards were originally introduced in the 1970s after an oil crisis to reduce dependence on foreign oil. Over time these rules have shifted from focusing on energy independence to addressing climate change concerns. Biden-era standards called for stronger annual fuel economy improvements and were expected to encourage greater use of electric vehicles.
Congress eliminated civil penalties for automakers that fall short of CAFE requirements in July 2025 through the One Big Beautiful Bill Act. The White House had proposed scaling back these standards in December before NHTSA finalized the rule. Some experts question whether the savings will actually be passed on to consumers given the current high prices for vehicles.
The Biden-era standards were expected to reduce gas consumption by 14 billion gallons by 2050 if fully implemented. NHTSA noted that while fuel-efficient vehicles cost more upfront they save money over time through reduced gas usage. Automakers may also have reasons not to quickly change production plans because the rule could face legal challenges or be changed by a future administration.
President Trump made his views on the issue clear on Truth Social, calling the new standards a way to reduce waste in car manufacturing. Critics argue that the change undermines progress toward cleaner transportation and could hurt long-term competitiveness. The decision comes as regular gasoline averages about $4.48 a gallon nationwide which AAA says is the highest national average ever for this time of year.