On Wednesday, President Donald Trump announced he was rolling back Corporate Average Fuel Economy (CAFE) standards set by former President Joe Biden’s administration.
Biden’s standards would have compelled widespread shifts to electric vehicles (EVS) and raised the average cost of a new car by nearly $1,000, according to the Trump administration. The administration said Trump’s actions will save Americans $109 billion in total travel over the next five years.
“We’re officially terminating Joe Biden’s ridiculously burdensome, horrible, actually, CAFE standards that imposed expensive restrictions and all sorts of problems—gave all sorts of problems to automakers. … It put tremendous upward pressure on car prices,” Trump said Wednesday, according to a C-SPAN video.
The Biden administration enacted changes to the National Highway Traffic Safety Administration’s (NHTSA’s) CAFE standard in June 2024. They mandated a 2% increase per year in fuel efficiency for passenger cars made from 2027 through 2031, and a 2% increase per year for light trucks for model years 2029 through 2031.
The increases were meant to bring the average light-duty vehicle fuel economy up to about 50.4 miles per gallon by model year 2031, the NHTSA said in a June 2024 release. It said the mandate would save Americans more than $23 billion in fuel costs while reducing pollution.
Trump’s proposed plan announced Wednesday would lower that standard, requiring automakers to reach an average of 34.5 miles per gallon for cars and light trucks in model year 2031.
A 45-day public comment period will begin while the proposed rule is published in the Federal Register, and a public hearing will be held at a date to be announced, the U.S. Department of Transportation said in a Wednesday news release.
Other Trump rollbacks affecting EVs
The Trump administration on Wednesday also highlighted the other actions it has taken to “prevent the Biden EV-related policies from raising costs for Americans.”
In June, Trump signed a joint resolution to end the California EV mandates, which would’ve banned new gas cars sold in the state by 2035. And in July, Trump signed the Working Families Tax Cuts Act into law, which set the civil penalty for violating CAFEs standards to $0.
The administration in August also revised rules for the National Electric Vehicle Infrastructure Formula (NEVI) Program, which the Trump administration paused earlier this year for review.
What was left unsaid on Wednesday, according to The New York Times, was that analysts expect Trump’s tariffs on cars and car parts to increase the price of cars built abroad. The average price of a new car in the United States now exceeds $50,000 for the first time, according to Kelley Blue book. It attributed this to tariffs, low loan rates and new EV sales, the New York Times reported.
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