The Trump administration is making a major policy reversal aimed at weakening the nation’s fuel economy standards by easing pressure on automakers to produce more efficient vehicles.
This undoes a key climate initiative of the Biden era.
The announcement was made during a White House event with top auto industry executives.
It cancels ambitious targets proposed to accelerate the transition to electric vehicles (EVs) and reduce greenhouse gas emissions.
What are the key changes?
The Biden administration has asked automakers to improve their fuel efficiency by about 2% annually, aiming for a fleet average of about 50 miles per gallon (mpg) by 2031.
The Trump administration’s latest rule suggests an annual increase of 0.5%, aiming for an average of about 34.5 mpg by 2031.
The administration is eliminating a program that allows automakers such as Ford and GM to buy regulatory credits from companies like Tesla that exceed efficiency standards. Officials called it a subsidy that “artificially propped up the electric vehicle industry.”
The new rule also aligns with a broader anti-EV shift. The move is part of a broader movement away from support for electric vehicles.
The administration has already relaxed rules on tailpipe emissions, eliminated federal tax credits for electric vehicle purchases and moved to block states like California from setting their own mandates for zero-emission vehicles.
What is fueling this movement?
The administration and automakers argue that past standards were unrealistic and costly.
President Trump claimed the rollback would save car buyers about $1,000 on the purchase price of a new vehicle by reducing technology requirements.
With that in mind, Ford CEO Jim Farley calls it a “win for common sense” aligned with customer demand for larger, less efficient trucks and SUVs.
Major automakers, especially those that rely on profitable trucks and SUVs, say the old rules were unworkable without a massive and uncertain shift to electric vehicles.
How will this impact Americans?
The effects are profoundly decisive, requiring a trade-off between initial costs and long-term expenditure and environmental impact.
Impacted potential cited by the supporter:
- The administration predicts that falling technology costs will make new cars, especially larger models, cheaper initially.
- Less regulatory pressure could mean continued wide availability of gas-powered trucks and SUVs, which remain very popular.
Potential impacts cited by critics:
- Although a new car may be cheaper, owners will pay more at the pump. According to the National Highway Traffic Safety Administration (NHTSA), American drivers could pay up to $185 billion more in fuel costs by 2050.
- This will also lead to increased pollution and health risks. Transportation is the largest source of greenhouse gas emissions in the United States. Lower standards mean more carbon dioxide and other pollutants. Environmental groups warn that it worsens air quality and threatens public health, especially that of children and the elderly.
What’s next?
The long-term impact will depend on whether the move will save Americans money as promised or, as environmentalists claim, lead to higher costs and greater environmental damage in years to come.
