The Trump administration this week announced plans to radically roll back fuel economy standards in the United States. The new plan being prepared by the government would require vehicles to achieve an average of 34.5 mpg by 2031, far from the 50.4 mpg target imposed under the Biden era.
The plan would also reclassify several crossovers and small SUVs as cars rather than light trucks — a change that would make attaining the new, lower targets much easier.
President Donald Trump stated during a press conference that consumers had been “indoctrinated” and forced to buy vehicles that are “too expensive” and “underperforming”.
A 45-day comment period will follow the official publication of the draft regulation, after which the NHTSA will hold a public hearing.
Another step back in the electric transition
This announcement is part of a series of decisions aimed at slowing the transition to electric vehicles (EVs). Earlier this year, Washington abolished federal tax credits for new and used EVs and withdrew California's authority to set stricter emissions standards.
Congress also ended penalties related to CAFE (Corporate Average Fuel Economy) standards, effectively eliminating the main enforcement mechanism for the rules. That change also ended the lucrative market for EV credits, which makers of greener vehicles could sell to their competitors.
Manufacturers express relief
The news of the plan was favourably received by the industry. Executives from Ford, Stellantis and General Motors were present at the White House. Ford CEO Jim Farley hailed the move as a victory for “common sense and accessibility”. Dealers were no less enthused; NADA President Mike Stanton called the announcement a “major milestone”.
The Alliance for Automotive Innovation, once relatively aligned with federal standards, now admits that current targets are “extremely difficult” to meet in the context of a slower-than-expected EV market.
Created in 1975, the CAFE framework requires the Department of Transportation to establish average fuel economy targets per fleet. The second administration quickly set its sights on rolling back if not eliminating that framework. Transportation Secretary Sean Duffy ordered a review of the standards in January.
An industry dancing to a different tune
GM has been revising its electrification plan in the last year and now says it wants to offer both EVs and gasoline models. The manufacturer’s Orion plant in Michigan will transition from assembling EVs to large combustion SUVs starting in 2027.
Stellantis, for its part, stated that it supports a realignment of the standards to better match “real market conditions”.
How times have changed. In 2017-2020, several automakers, including Ford and Honda, allied with California to resist regulatory rollbacks. This time, they stand alongside the president to support the rollback, betting that it will encourage the sale of more profitable gas-engine vehicles and saluting the reduced regulatory burden.
And it may not be over. The EPA is still considering reviewing the “endangerment finding” of 2009, which forms the basis of the federal government's authority to regulate emissions related to climate change. A decision is theoretically expected this month.