Payam Javan: The Trump administration has finalized new fuel economy standards for cars and light trucks, significantly reducing the requirements established during the Biden administration. The National Highway Traffic Safety Administration (NHTSA) said the revised Corporate Average Fuel Economy (CAFE) rules will generally require automakers to improve fleet fuel efficiency by up to 1% annually, resulting in an estimated industrywide average of 34.9 miles per gallon by model year 2031.

The new target is substantially below the approximately 50.4 mpg average projected under the standards finalized by NHTSA in 2024. Those rules required fuel economy to increase by 2% annually for passenger cars from model years 2027 through 2031 and for light trucks from 2029 through 2031. The Trump administration said the revised standards are intended to reduce vehicle costs and give consumers greater choice.

The Transportation Department estimates that the revised requirements will reduce automakers’ compliance and technology costs and lower the average price of a new vehicle by roughly $1,300. The department also estimates significant savings for consumers overall. However, independent reporting and the administration’s own regulatory analysis indicate that lower fuel efficiency could increase gasoline consumption and lifetime fuel expenses for vehicle owners.

The rule has received support from major automakers, while environmental organizations have criticized the rollback and argued that less fuel-efficient vehicles could increase gasoline use and emissions. The change follows several other Trump administration policies affecting the auto industry, including the end of the federal electric-vehicle tax credit for vehicles acquired after Sept. 30, 2025, and actions limiting California’s ability to enforce vehicle-emissions programs that were stricter than federal requirements.

The new standards come as U.S. gasoline prices remain elevated. AAA reported that the national average for regular gasoline was about $4.48 per gallon on Sept. 28, compared with roughly $3.13 a year earlier. The administration says the revised CAFE rules will make vehicles more affordable and support conventional gasoline-powered models, while critics have raised concerns about the potential long-term effects on fuel consumption, household fuel costs and emissions.