Trump Plans Rollback of Fuel Economy Standards to Address Rising Car Prices
President-elect Donald Trump intends to rescind Biden administration fuel economy standards, citing their contribution to elevated new vehicle costs. The proposed reversal targets corporate average fuel economy rules set to reach 50.4 miles per gallon by 2031. Automakers have warned that compliance adds approximately $1,000 to the price of each vehicle produced.
The standards, finalized in March 2024, aimed to cut carbon dioxide emissions by nearly 6 billion metric tons over the next three decades. They required annual improvements of 2.6% from 2027 through 2031, building on prior rules that reached 48.1 mpg by 2030. Environmental Protection Agency projections estimated annual fuel savings of $1,300 per driver by 2050.
Trump’s transition team views the regulations as burdensome amid average new car prices exceeding $48,000. Repeal would align with his campaign pledge to boost domestic manufacturing and reduce regulatory hurdles. Industry groups like the Alliance for Automotive Innovation support easing mandates to prioritize affordability.
However, tariffs imposed during Trump’s first term increased steel and aluminum costs by $2.4 billion annually for U.S. automakers. These duties, retained post-2018, offset potential savings from deregulation. Analysts note that supply chain disruptions and semiconductor shortages have driven prices higher than fuel rules alone.
Electric vehicle adoption, incentivized under Biden, faces uncertainty with the $7,500 tax credit’s expiration for many models. Ford reported a 20% drop in EV sales in November after losing eligibility for its ‘F-150 Lightning’. General Motors and Stellantis similarly project compliance costs of $5 billion yearly without adjustments.
The rollback process requires EPA rulemaking, potentially delaying implementation until mid-2026. Public comment periods and legal challenges from states like California could extend timelines. California, with its own 2035 zero-emission mandate, plans to enforce stricter standards independently.
Automakers may shift production toward larger trucks and SUVs, which qualify for lower efficiency targets. Light trucks averaged 22 mpg in 2024, compared to 32 mpg for passenger cars. This pivot risks higher greenhouse gas emissions, with the EPA estimating an additional 3.4 billion tons of CO2 by 2055 under relaxed rules.
Consumers could see modest price reductions of $500 to $800 per vehicle in the short term. Yet experts caution that without addressing tariffs, overall affordability remains challenged. The auto sector employs 1 million workers, with 60% in manufacturing states pivotal to Trump’s base.
International trade dynamics complicate the equation. China’s export of 1.2 million gasoline vehicles in 2025 floods markets, pressuring U.S. pricing. European Union proposals for 70% local content in cars aim to counter such competition, potentially influencing U.S. policy.
The decision underscores tensions between environmental goals and economic pressures. Fuel efficiency has doubled since 1975, saving drivers $7 trillion at the pump. Future standards will balance innovation in hybrids and EVs against immediate cost concerns.
