Trump proposes easing U.S. fuel economy rules, reversing Biden-era targets and reshaping the auto sector with major impacts on emissions and consumer costs.
Trump Moves to Roll Back U.S. Fuel Economy Standards
White House Signals Major Policy Shift
In Washington on Wednesday, U.S. President Donald Trump unveiled a sweeping proposal to roll back federal fuel economy standards, marking a direct reversal of regulations finalized under former president Joe Biden. The announcement positions the administration to substantially reshape the future of gasoline and electric vehicle sales across the country.
Details of the Proposed Standard Changes
The National Highway Traffic Safety Administration (NHTSA) outlined the plan, which lowers the previously set 2031 target from 50.4 miles per gallon to 34.5 miles per gallon. The agency also aims to ease requirements retroactively for model years dating back to 2022, followed by minimal annual increases — between 0.25% and 0.5% — through 2031.
Under the Biden administration, efficiency targets rose as high as 10% per year for certain models, with goals intended to accelerate adoption of electric vehicles without immediately phasing out gasoline-powered cars.
Motivations Behind the Rollback
President Trump argued that the changes reflect consumer preferences, stating that “people want the gasoline car.” The administration maintains that easing standards will reduce vehicle sticker prices, with NHTSA estimating average up-front savings of roughly US$930 per vehicle.
Industry leaders, including the CEOs of Ford and Stellantis who joined Trump at the announcement, praised the proposal as better aligned with market conditions. Ford CEO Jim Farley said the shift supports affordability and choice for drivers.
Financial and Industry Implications
According to NHTSA projections, automakers could save US$35 billion through 2031, including US$8.7 billion for General Motors and more than US$5 billion for Ford and Stellantis.
The proposal also eliminates credit trading among manufacturers beginning in 2028 — a major change that would directly impact companies like Tesla and Rivian, which have relied on selling compliance credits to competitors producing gasoline vehicles.
Environmental and Consumer Impact Concerns
Environmental advocates and state officials reacted sharply. California Governor Gavin Newsom accused the administration of pushing policies that would increase pollution and raise household fuel expenses.
NHTSA estimates the revised rules would increase U.S. fuel consumption by roughly 100 billion gallons through 2050 compared with the Biden-era framework, resulting in up to US$185 billion in additional fuel costs for Americans. The agency also projects a 5% rise in carbon emissions, equivalent to the annual pollution from 7.7 million vehicles by 2035.
Broader Climate Policy Repercussions
Transportation remains the largest contributor to U.S. greenhouse gas emissions, making fuel economy standards a central climate tool. Biden’s rules had been expected to eliminate hundreds of millions of metric tons of emissions and cut long-term fuel use significantly.
Kathy Harris of the Natural Resources Defense Council warned that the proposed rollback shifts financial burdens onto drivers while benefiting oil companies. Meanwhile, automakers say they had been struggling to meet aggressive zero-emission targets, with GM CEO Mary Barra noting that earlier state-level regulations could have forced factory shutdowns.
Next Steps and Ongoing Review
NHTSA is reviewing public and industry feedback before finalizing the rule. The agency also confirmed that automakers will avoid penalties previously imposed for failing to comply with fuel economy standards dating back to 2022, following legislation signed by Trump earlier this year.
The proposal forms part of a broader strategy by the administration to strengthen the market for gasoline-powered vehicles and slow the industry’s transition toward electric mobility — a direction that continues to draw debate across environmental, economic, and political lines.
