The Trump White House has sought to roll back the U.S. Corporate Average Fuel Economy standards, proposing a new 2031 fleet target of 34.5 mpg for cars and light trucks that would represent a significantly lower trajectory than the 50.4 mpg envisioned under its predecessor framework.
The plan also rejiggers compliance math by treating nearly all crossovers as trucks, does away with automakers’ ability to swap electric-vehicle credits, and keeps the door open for “really small” city cars through new Department of Transportation guidance.
Top executives from Ford and Stellantis were on hand with the president as he announced the proposal, highlighting industry rifts over how aggressively to pursue efficiency gains and electrification.
The CAFE rules, which date to 1975 and specify how far U.S. vehicles must travel on a gallon of fuel, are controlled by the National Highway Traffic Safety Administration.
According to NHTSA’s tally at the time, automakers were exceeding a requirement that same year for 2024, estimating they would average 35.4 mpg compared to the 30.1 mpg target.
And it could leave questions about rolling back future requirements that companies seem to have outperformed with their current fleets.
What the New Fuel Economy Targets Aim to Accomplish
By lowering that bar across the board to 34.5 mpg for 2031, the manufacturers gain more flexibility in selling heavier, less-efficient models.
Those regular crossovers, counted as trucks in this system, are moved to a truck class that tends to have looser limits; but with a lower fleetwide target and the end of electric-vehicle credit trading, that could be muted — easing pressure when considering alluring body styles like these when it comes time to improve efficiency.
Scrapping credit trading is one way to narrow a market mechanism that rewarded early investment in EVs and high-mpg technology. At the same time, the administration is making the case that less stringent rules will help prevent vehicle prices from rising by an average of about $1,000. That claim echoes previous defenses, though customers are paying more than ever, with average transaction prices topping $50,000 in a move toward larger SUVs and premium trims.
The administration is also asking DOT to pave the way for the kinds of ultra-compact models that are prevalent in Japan and South Korea. If accomplished through updated safety pathways, that might expand consumer choice — but it wouldn’t materially change fleet emissions unless such vehicles sell at scale.
How the Policy Changes Emissions and Ownership Costs
Fuel consumption targets are a straight line to fuel use. That’d be about 268 gallons a year for an average driver logging the kind of miles scaled to getting 50.4 mpg from a vehicle in 2031 traveling some 13,500 miles annually. At 34.5 miles a gallon, that driver would consume approximately 391 gallons — an additional 123 gallons each year. That’s roughly an extra $430 a year at the pump, or over $5,000 over a 12-year ownership cycle — on top of any maintenance and financing impacts.
And the environmental repercussions are every bit as severe. The Environmental Protection Agency calculates that 1 gallon of gasoline releases approximately 8.9 kilograms of CO₂ when burned. The extra 123 gallons per vehicle adds up to roughly 1.1 metric tons of CO₂ a year. Spread across millions of new vehicles, those rollbacks would add tens of millions of tons of emissions during the program years and further complicate federal and state climate goals for a sector that already represents the largest share of U.S. greenhouse gases.
Over the last decade, independent analyses — ranging from Consumer Reports to the International Council on Clean Transportation — have all found that when technology costs are considered, stronger efficiency standards yield net consumer savings. NHTSA’s own rulemakings have frequently exhibited positive net benefits in a variety of gas price scenarios.
What the Auto Industry Thinks and Looks Abroad
Automakers are out of step with each other. Ford tempered its EV launch by halting more capacity for the F-150 Lightning and betting on internal combustion truck production. Stellantis has returned high-output V-8s to the lineup and doubled down on profitable trucks and SUVs. Meanwhile, Hyundai and Kia are pressing on with electrified models and pricing some of the EVs very aggressively to defend share.
Worldwide, the drift is toward greater efficiency and fewer emissions. The European Union’s CO₂ standards will tighten throughout the next decade, and China’s New Energy Vehicle mandate keeps lifting market share for plug-ins. Many of the vehicles sold in the U.S. are designed with these global realities in mind. Abdicating efficiency leadership cedes a market advantage elsewhere in the world, where competitors are investing to comply with more stringent rules.
Legal and Policy Outlook for CAFE Rules and Enforcement
One reason the move may have outsized impact is that penalties for failing to hit CAFE targets were recently rolled back by a new law, rendering the standards largely toothless in the absence of strict enforcement. That’s because today’s policy locks in a lower ambition level while also making the job harder for any future administration trying to reset the curve.
Anticipate litigation from states and environmental groups who will challenge these new standards under the Administrative Procedure Act, similar to court battles that were waged in response to the previous rollback. And the relationship with the EPA greenhouse gas standards — and whether California and its allies can set even tougher rules — will also influence how tough manufacturers’ real-world requirements will be.
What It Means for Car Buyers and Their Fuel Costs
Consumers aren’t uniformly choosing bigger, thirstier vehicles.
New sales data indicates that hybrids are gaining momentum, with month-over-month increases of about 6% as buyers want lower fuel bills without going fully electric. Tougher standards generally speed the delivery of these efficient options; weaker rules risk impeding that pipeline of progress, especially in hot segments like crossovers, where efficiency gains have been slow but steady.
The bottom line: A lower 2031 target lowers near-term compliance costs for some automakers but shifts fuel and climate costs onto drivers and the public. Since manufacturers already overshot CAFE standards, and international markets are marching on, the rollback might offer some regulatory relief in the short run while eroding long-term competitiveness and household savings.
