President Trump has put forth a plan to cut down on fuel efficiency standards that were established by former President Biden last year. This move is aimed at facilitating the sale of gasoline-fueled vehicles by automakers. Trump’s objective is to reverse one of Biden’s key initiatives in combating climate change, which focused on promoting the adoption of electric vehicles. Trump stated, “People prefer gasoline cars.”
The National Highway Traffic Safety Administration (NHTSA) has proposed a significant reduction in fuel economy requirements for model years 2022 to 2031. The new proposal mandates an average fuel efficiency of 34.5 miles per gallon by 2031, a decrease from the previous standard of 50.4 miles per gallon.
Under Biden, NHTSA had increased fuel efficiency standards by 8% annually for model years 2024-2025 and by 10% for 2026. Biden’s regulations were designed to encourage automakers to produce more electric vehicles without an immediate ban on gasoline-powered cars.
NHTSA estimates that the proposed rule change would result in an upfront reduction in vehicle costs by $930 US, but it would also lead to an increase in fuel consumption by around 100 billion gallons by 2050. This increase in fuel consumption could cost Americans up to an additional $185 billion US and raise carbon dioxide emissions by approximately 5%.
The proposed rule would make it easier for automakers to comply with regulations and save them a significant amount of money. Furthermore, the proposal aims to eliminate credit trading among automakers by 2028 and terminate some credits for fuel-saving technologies.
California Governor Gavin Newsom criticized Trump’s proposal, stating that it would force Americans to spend more on fuel and harm air quality. The transportation sector is responsible for the largest percentage of greenhouse gas emissions in the United States.
In a recent move, Trump signed legislation that removed fuel economy penalties for automakers, and NHTSA confirmed that there have been no fines imposed on automakers dating back to the 2022 model year. Ending credit trading could have negative implications for electric vehicle manufacturers like Tesla and Rivian.
Ford CEO Jim Farley expressed support for the proposal, emphasizing the importance of affordability and consumer choice. However, data shows that new vehicle prices have increased, contradicting Trump’s claim that vehicle prices are declining.
The agency projected that the proposed rule changes would significantly impact gasoline consumption and emissions. Environmental groups have criticized the Trump administration’s actions, claiming that they will lead to higher costs for consumers and benefit the oil industry. Trump has taken several measures to promote gasoline vehicles and discourage electric vehicle production, including revoking EV tax credits and preventing California from banning traditional gasoline vehicles after 2035.
