Trump administration overhauls vehicle fuel economy rules, lowering standards

The Trump administration has officially reversed a Biden-era policy intended to make vehicles more fuel efficient. The administration says that the new rules will lower vehicle costs, encourage new car sales, and give car-makers more flexibility (1).

• On Monday, the Dept. of Transportation issued a press release announcing the finalization of a new rule that will lower fuel efficiency standards (1, 2).
• Under the new rule, the DOT is mandating that vehicles get a fleetwide average of 34.9 miles per gallon (mpg) by model year 2031. The old rules targeted 50.4 mpg by model year 2031 (3, 4).
• The Biden-era standards called for fuel efficiency improvements of 8% annually in 2024 and 2025, 10% in 2026, and 2% annually from 2027–2031 (3).
• The new rules, in contrast, increase fuel efficiency standards for cars, model years 2022–2031, by 0.90% annually through model year 2029. In the same period, light truck standards will increase by 0.51%. After a transition in 2030, both will increase annually by 1% (4).
• The agency is also making some changes to its fuel credit policies and vehicle classifications. Starting in 2028, the new rules will eliminate credit trading between automakers, which, according to Reuters, will remove a major source of revenue for EV manufacturers like Tesla (TSLA) and Rivian (RIVN) (4, 5).
• The NHTSA says the changes will decrease regulatory costs, make vehicles more affordable, and give automakers more flexibility to produce the cars people actually want to buy. However, it also acknowledges that amending the rules will increase fuel consumption and carbon dioxide emissions (2, 4).
• The move is the latest effort of the Trump administration to promote gas-powered vehicles. Since taking office again, Trump has scrapped a $7,500 new EV tax credit and eliminated tailpipe emissions standards. He also axed fines for automakers failing to meet federal fuel economy standards (6, 7, 8).
• The new rule will go into effect 60 days after it's published in the Federal Register (4).

Sources & Further Reading

1. "Corporate Average Fuel Economy." NHTSA.
2. "President Trump & Transportation Secretary Duffy Finalize “Freedom Means Affordable Cars” Initiative to Reset Fuel Economy Standards, End Illegal EV Mandate." U.S. Department of Transportation. September 28, 2026.
3. "Corporate Average Fuel Economy Standards for Passenger Cars and Light Trucks for Model Years 2027 and Beyond." Federal Register / National Highway Traffic Safety Administration. June 24, 2024.
4. "The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule III for Model Years 2022 to 2031 Passenger Cars and Light Trucks." U.S. Department of Transportation, NHTSA. September 28, 2026.
5. "US finalizes new lower fuel economy standards." Reuters. September 28, 2026.
6. "Trump megabill axes $7,500 EV tax credit after September." NBC. July 2, 2025.
7. "President Trump and Administrator Zeldin Deliver Single Largest Deregulatory Action in U.S. History." EPA. February 12, 2026.
8. "One Big Beautiful Bill Act - House Budget Committee." U.S. Senate Committee on the Budget. July 2025.