President Donald Trump announced on Saturday that he approved new fuel economy standards, reversing the stricter policies implemented by former President Joe Biden that aimed to promote electric vehicle adoption. The Corporate Average Fuel Economy (CAFE) standards, established in 1975, have been updated periodically to enhance vehicle efficiency. Under Biden's standards, automakers were required to increase the fuel efficiency of passenger cars and light trucks to approximately 50 miles per gallon by 2031, a measure intended to encourage electric vehicle production and sales in the United States.
Trump characterized the policy change as beneficial for both automakers and consumers, although specific details of the final standards have not been released. In a post on Truth Social, he stated, "These new Standards will take the waste out of building cars in America. That means LOWER PRICES, saving families thousands on a new, beautiful, and safe car — Far better than the Environmental Monsters that we were building heretofore." He added that manufacturers, including General Motors, Ford, and Stellantis, have expressed interest in building vehicles in the U.S. under the new standards.
This regulatory change aligns with Trump's campaign promise to repeal policies that incentivized electric vehicles. The exact final fuel economy standards remain unclear, but Transportation Secretary Sean Duffy previously indicated they would be significantly lower than those established during the Biden administration. The relaxation of fuel economy standards may allow automakers to produce more pickup trucks and SUVs, which tend to be more profitable but have lower fuel efficiency. Despite the changes, some companies, such as General Motors, have stated they will continue to produce electric vehicles.