President Donald Trump has unveiled a sweeping proposal to roll back U.S. fuel economy standards for cars and trucks, marking one of the most consequential reversals yet of the Biden administration’s climate and transportation agenda. Announced on December 3, 2025, at a White House event with executives from Ford, General Motors and Stellantis, the plan would sharply weaken federal Corporate Average Fuel Economy (CAFE) rules and ease the path for gas-powered vehicles for at least the next decade. [1]
The Trump administration and its allies argue the move will lower vehicle prices and save families money, citing internal estimates of roughly $1,000 in reduced upfront costs per new car and a claimed $109 billion in total savings over the next five years. [2] Critics — including environmental groups, clean‑energy businesses and several Democratic governors — counter that the weaker standards will force drivers to spend billions more at the pump, increase air pollution and push the U.S. auto industry further behind competitors in Europe and China. [3]
What the new Trump fuel economy proposal actually does
Fuel economy standards are set by the National Highway Traffic Safety Administration (NHTSA) under the CAFE law, which dates back to 1975 and determines the average miles per gallon automakers’ fleets must achieve. [4]
The new Trump proposal would:
- Lower the 2031 target from about 50.4 mpg to 34.5 mpg for new passenger cars and light trucks, compared with the Biden‑era rule finalized in 2024. [5]
- Rewrite standards for model years 2022 through 2031, retroactively relaxing earlier requirements and then increasing them only about 0.25% to 0.5% per year, instead of the much steeper hikes previously planned. [6]
- Eliminate most fuel‑economy credit trading among automakers starting in 2028, a system that has allowed companies that over‑comply with standards — including EV‑focused manufacturers like Tesla and Rivian — to sell credits to automakers whose fleets fall short. [7]
NHTSA’s own preliminary analysis, as reported by multiple outlets, estimates that the weaker standards would reduce average upfront vehicle costs by around $900 but would “significantly” increase U.S. gasoline consumption over the life of the rule. [8]
How the rollback changes Biden’s fuel economy and climate trajectory
The Biden administration’s 2024 CAFE rule had been designed to push average fleet fuel economy to about 50.4 mpg by model year 2031, up from roughly 46.7 mpg projected for 2026. [9]
According to NHTSA’s modeling, summarized by the agency and environmental groups at the time, those stronger standards were expected to:
- Save about 64–70 billion gallons of gasoline through 2050
- Avoid roughly 659–710 million metric tons of climate‑warming CO₂
- Deliver more than $23 billion in fuel savings, with some analyses citing net benefits of about $35 billion once health and climate impacts are included
- Cut fuel costs by around $600 per typical car or light truck over its lifetime, with even larger savings for heavier vehicles [10]
Trump’s proposal effectively erases much of that expected progress. NHTSA now projects that the weakened rule will burn significantly more gasoline — undoing a large share of the fuel and emissions reductions embedded in the Biden‑era standards. [11]
Environmental Defense Fund and NRDC both warn that abandoning the 2024 rule will mean hundreds of millions of extra tons of climate pollution and tens of billions of additional gallons of gasoline burned over the coming decades. [12]
The rollback also clashes with U.S. climate pledges. Transportation is the largest source of greenhouse gas emissions in the country, and cars and trucks account for the bulk of that total. [13]
Supporters: Automakers, oil lobby and the White House
Surrounded by executives from Ford, GM and Stellantis in the Oval Office, Trump cast the Biden standards as a de‑facto “EV mandate” that drove up car prices and threatened U.S. manufacturing. He argued that Americans “want the gasoline car” and framed the reset as part of a broader effort to kill what he calls the “Green New scam.” [14]
Automakers that had lobbied for relief from aggressive electric‑vehicle targets quickly endorsed the move:
- Ford CEO Jim Farley thanked Trump for “aligning fuel economy standards with market realities” and called the change “a win for customers and common sense,” while still pledging to make progress on emissions and efficiency. [15]
- Stellantis CEO Antonio Filosa said the proposal would “re‑align CAFE standards with real‑world market conditions” and help the company offer vehicles “at prices [customers] can afford.” [16]
- GM reiterated that it supports “one national standard” and welcomed efforts to better match regulations with consumer demand and industry planning cycles. [17]
Industry groups in the oil and gas sector were similarly enthusiastic. The American Petroleum Institute hailed the rollback as a “win for American drivers,” praising Trump and Transportation Secretary Sean Duffy for “restoring commonsense fuel‑economy standards” that protect “affordable choices for families and businesses.” [18]
For many manufacturers, the appeal is not just the lower mpg numbers but the broader deregulatory context. Trump’s signature One Big Beautiful Bill Act, signed on July 4, 2025, reset civil penalties for failing to meet CAFE standards to $0, effectively removing the fine-based enforcement mechanism that had cost automakers more than $1.1 billion between 2011 and 2020. [19]
Without meaningful fines — and with credit trading now also on the chopping block — the new standards amount less to a hard requirement and more to a signal about how aggressively the federal government expects the industry to decarbonize.
Opponents: Environmental groups, blue states and consumer advocates
Environmental groups blasted the proposal as a “U‑turn” that will raise costs for families while locking in higher pollution.
- Environmental Defense Fund said weakening the standards would “waste gas, cost American families money, and put more pollution in the air we breathe,” calling the plan “disastrous” for the economy, national security and the environment. [20]
- NRDC argued the rollback would “stick drivers with higher costs at the pump” and deliver a “windfall” to the oil industry, estimating that drivers could pay hundreds of dollars more per year for gasoline if it is adopted. [21]
- The Center for Biological Diversity warned that Trump’s move will “feed America’s destructive use of oil” and undermine U.S. competitiveness in the “green tech race” against Chinese and European automakers. [22]
Business‑oriented climate groups, including the nonpartisan network E2, also weighed in. E2 said the rollback “halts five decades of progress” toward cars that are cheaper and cleaner to run and noted that CAFE standards have historically cut U.S. oil consumption by roughly 25% while saving households hundreds of dollars per year. [23]
State leaders are already sharpening their critiques. California Gov. Gavin Newsom called the move a “con job,” arguing that it will “force Americans to spend billions more at the pump while poisoning the air in our communities” and vowing to push back, just as the state has sued the Trump administration this year over separate efforts to repeal California’s 2035 electric‑vehicle rules. [24]
Consumer advocates question the administration’s central claim that weaker fuel economy rules are necessary to keep car prices in check. An analysis by Consumer Reports of vehicle sales from 2003 to 2021 found no statistically significant increase in inflation‑adjusted vehicle prices as fuel economy improved by about 30% — and estimated that buyers of 2021 model‑year vehicles saved roughly $7,000 in lifetime fuel costs compared with similar cars sold in 2003. [25]
What this means for drivers: cheaper cars now, more gas later
At the heart of the debate is a simple trade‑off: lower upfront prices versus higher long‑term fuel bills.
The administration says its new CAFE proposal will reduce the average purchase price of a new vehicle by around $900–$1,000, and that loosening rules will produce $109 billion in aggregate savings for American families over the next five years. [26]
But those savings come alongside substantially higher gasoline consumption:
- Under the Biden‑era rule, NHTSA projected cutting fuel use by roughly 64–70 billion gallons by mid‑century. [27]
- Weakening the standards means drivers collectively buy much of that fuel instead of avoiding it. NHTSA itself acknowledges the new rule would “significantly boost” fuel consumption, even as it lowers sticker prices. [28]
To visualize the stakes for an individual driver, consider a simple example:
- A driver traveling 12,000 miles per year in a vehicle averaging 34.5 mpg uses about 348 gallons of gas annually.
- In a vehicle averaging 50.4 mpg, the same driver would use roughly 238 gallons.
That’s a difference of about 110 gallons of gasoline every year. At $3.50 per gallon, that’s roughly $380 extra per year; at $4.00, about $440 — adding up to $3,800–$4,400 over a 10‑year ownership period, not counting interest or future gas price spikes. (These figures are illustrative; real‑world mileage and prices vary, but they align with independent estimates that drivers could face hundreds of dollars in additional yearly fuel costs under weaker standards.) [29]
In other words, some households may save modestly on the purchase price but lose much more slowly and silently at the gas pump.
Electric vehicles, automaker strategy and global competition
Trump’s fuel economy move doesn’t stand alone. It slots into a broader second‑term agenda that has:
- Eliminated federal tax credits for new and used EVs via the One Big Beautiful Bill Act
- Cut off or frozen funding streams for EV charging infrastructure
- Revoked California’s authority to ban new gas‑powered car sales by 2035, a repeal that is already the subject of a multistate lawsuit led by California and ten other states [30]
Automakers had originally leaned into electrification under Biden, announcing multibillion‑dollar investments in EV factories and pledging timelines to phase out combustion‑only models. Some of those plans are now being reconsidered. Reporting this year has documented canceled EV plants, delayed battery projects and revised corporate targets, including General Motors shifting billions of dollars of planned spending back toward gas‑powered vehicles. [31]
Environmental groups and many analysts warn that the rollback will deepen that retreat and could leave U.S. manufacturers exposed in a world where major markets — from the European Union to China — are doubling down on EVs and planning phase‑outs of fossil‑fuel cars over the next 10–15 years. [32]
At the same time, industry executives say they still see a future in which EVs play a larger role, but insist that consumer demand, charging infrastructure and raw‑material supply chains need time to catch up. The relaxed CAFE standards, they argue, give them breathing room to balance EV rollouts with continued sales of profitable trucks and SUVs. [33]
Legal battles and regulatory whiplash
Trump’s plan is still a proposal, not a final rule. NHTSA will now publish it in the Federal Register, triggering a formal comment period that typically lasts at least 60 days, followed by revisions and a final rulemaking that could come sometime in 2026. [34]
Few expect the process to be quiet. Environmental groups, which have already vowed to “vigorously oppose” the rollback, are widely expected to challenge the final rule in court, arguing that NHTSA is obligated by law to set the “maximum feasible” fuel economy standards and that the agency’s own data show that stronger rules are technologically and economically achievable. [35]
Blue states are also likely to sue. Attorneys general in California, New York, Washington and other states have a long record of litigating Trump‑era efforts to weaken fuel economy penalties and emissions rules, and in previous rounds they successfully blocked an earlier attempt to slash CAFE fines before Congress later zeroed them out through legislation. [36]
The fight unfolds against a backdrop of “regulatory whiplash.” Since 2017, fuel rules have swung from stricter to weaker and back again with each change of administration — a dynamic that auto lobbyists say makes decade‑long product planning extremely difficult. [37]
Now, with standards weakened and penalties set to zero, the stakes of the next presidential election — and the next Congress — loom even larger. A future administration could again tighten CAFE rules and reinstate fines, leaving automakers that re‑optimized around today’s rollback scrambling to comply later.
What to watch next
For drivers, businesses and climate watchers, several key questions will determine how consequential this rollback becomes in practice:
- How aggressive is the final rule?
NHTSA could soften or slightly strengthen the proposal after public comment, especially if automakers signal that parts of the rollback aren’t essential or if the agency seeks to bolster its legal position. - How do carmakers adjust their product mix?
Companies that had already sunk billions into EV platforms may still push electric models, especially for export markets, even as they lean harder into gas trucks and SUVs at home. Their real‑world sales decisions will matter more than the regulatory text alone. - Will courts uphold the rollback?
Past litigation has shown that courts pay close attention to whether agencies adequately justify changes in direction, especially when they reverse rules that rested on extensive technical records. Expect legal challenges to focus on NHTSA’s cost‑benefit analysis and interpretation of its “maximum feasible” mandate. - How do states and foreign markets respond?
California and allied states are already trying to preserve their own clean‑car rules, while the European Union, China and others move ahead with aggressive EV and efficiency policies. The gap between U.S. and global standards could shape where automakers choose to build and sell their most advanced vehicles. [38]
For now, Trump’s proposal sends a clear signal: federal policy is once again tilting toward cheaper gas‑powered vehicles and away from the rapid electrification path envisioned under Biden. Whether that shift ultimately lowers costs for American families — or locks them into higher fuel bills and climate risks — will depend on how the next phases of this fight play out in agencies, boardrooms and courts over the coming months.
References
1. www.washingtonpost.com, 2. www.eenews.net, 3. www.edf.org, 4. www.cbsnews.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.eenews.net, 10. www.reuters.com, 11. www.reuters.com, 12. www.edf.org, 13. abcnews.go.com, 14. www.washingtonpost.com, 15. www.washingtonpost.com, 16. www.washingtonpost.com, 17. www.cbsnews.com, 18. www.washingtonpost.com, 19. environmentalhealthsafetybrief.sidley.com, 20. www.edf.org, 21. www.nrdc.org, 22. www.washingtonpost.com, 23. e2.org, 24. www.gov.ca.gov, 25. abcnews.go.com, 26. www.eenews.net, 27. www.reuters.com, 28. www.reuters.com, 29. www.nrdc.org, 30. www.washingtonpost.com, 31. www.washingtonpost.com, 32. en.wikipedia.org, 33. www.reuters.com, 34. www.eenews.net, 35. www.edf.org, 36. oag.ca.gov, 37. www.washingtonpost.com, 38. www.reuters.com
