WASHINGTON (TNND) — The Trump administration is rolling back fuel-efficiency standards for new cars and light trucks in a move it says will save Americans money when buying a new vehicle and furthers its efforts to roll back Biden-era incentives for car companies to expand their electric offerings.
The move will make it easier for U.S. automakers to meet standards on how far new vehicles need to travel on a gallon of gasoline, rules that have steadily increased miles-per-gallon across vehicle classes. The new standards are expected to result in an average fuel efficiency of 34.9 miles per gallon across their fleets, down from 50.4 miles per gallon projected under the Biden administration.
President Donald Trump announced on social media on Saturday that he had approved new fuel economy standards to reverse what he has described as the Biden administration’s “EV mandate.” He has taken several steps since returning to office to roll back his predecessor’s push to get more Americans driving electric vehicles.
Congress has also already eliminated fines for automakers that don’t hit the standard, while the Environmental Protection Agency ended all federal limits on pollution from cars.
“The Dumocrats cost our Great Auto Manufacturers $Billions, forced Americans into cars they never wanted, and wasted Billions on Chargers that were never built,” Trump wrote on Truth Social.
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The final policy was unveiled on Monday, significantly weakening federal mileage standards that have forced automakers to increase fuel efficiency in their gasoline-powered vehicles and sell more electric models.
Trump said easier mileage requirements would reduce the cost of a new vehicle and help boost auto production in the U.S. The average cost for a new vehicle in the U.S. was over $50,000 as of August, according to Kelley Blue Book, which comes as consumers are facing higher interest rates, grocery bills and slower wage gains.
“This rule restores integrity to the national fuel economy program, balancing vehicle affordability and energy conservation goals while improving safety on our roadways,” said National Highway Traffic Safety Administration administrator Jonathan Morrison. “Newer cars are safer cars. By reducing vehicle prices, more American families will be able to afford newer vehicles, and sensible standards allow automakers more freedom to design and produce vehicles consumers actually want.”
The rollback comes as drivers are faced with increasingly higher prices for gasoline and diesel since the war with Iran started in February. As of Monday, the national average for a gallon of gasoline was $4.47, while diesel cost $6.45. Proponents of stiffer mileage standards argue they ultimately save consumers more money in the long run by reducing how often they have to fuel up.
While electric vehicle uptake is growing rapidly around the world amid spiking fuel prices, the switch away from traditional combustion-powered engines has happened much slower in the U.S. EVs have only accounted for 5.8% of new car sales in the second quarter of this year and accounted for 7.4% last year as generous tax credits meant to make them more affordable were cut by the Trump administration.
“That would have been a major change in car production as well as car buying habits, and of course, it would have required a huge infrastructure rollout as well, so there is an element of realism here,” said Tim Johnson, professor of the practice in energy and the environment at Duke University.
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Automakers and industry groups cheered the lower mileage standards, saying the Biden-era standards were too burdensome and would have required them to make significant investments in expensive technology for EVs consumers were unwilling to buy.
“The standards finalized under the previous administration effectively required a switchover to electric vehicles that was out of step with market realities and customer demand. Today’s final rule is an appropriate course correction,” John Bozzella, president and CEO of Alliance for Automotive Innovation, said in a statement.
Easing pressure on automakers to sell more EVs raises a potential tradeoff for the industry. While they are getting temporary relief from what would be an expensive transition domestically, it could also make it harder for American automakers to compete in a global market dominated by Chinese vehicles and batteries.
China’s automotive industry has a stranglehold over the global EV market, offering smaller and more affordable vehicles than their American and European counterparts. It also dominates global supply chains for EV parts, batteries and the materials that go into making them.
China accounted for more than 80% of battery cell production in 2025 and even higher shares for the production of active materials used in EV batteries, according to the International Energy Agency. While lithium-ion battery manufacturing is growing faster in the U.S. and Europe, China is still expected to be the largest producer of batteries and their materials until at least 2035.
Breaking China’s grip over the EV market and the processing of critical minerals used in their batteries and all sorts of other products had been a priority for the U.S. during the Biden administration with domestic manufacturers bolstered with billions in subsidies, tax incentives and federal efforts to ramp up the electrification of America’s fleet.
The elimination of generous tax credits for EVs has added to U.S. automakers struggles to increase sales of their electric offerings. Many of the companies have significantly scaled back plans for electric vehicles after they lost billions when American drivers were slow to ditch their gasoline-powered vehicles for an electric one.
There are concerns that the latest move reducing mileage standards will incentivize auto companies to make more large vehicles like pickup trucks and sport utility vehicles, which have higher margins. While that would be a boost to business in the short term, it could further threaten American competitiveness with China in the global EV market.
“It depends on how short- versus long-term the U.S. auto industry is,” Johnson said. “They make a lot of money on SUVs and big vehicles, and if they can plow some of that into R&D for electric vehicles and at least keep that simmering on the back burner for a while, then fine. But if not, they're going to be hurt in the long run.”
