The US Department of Transportation has formally finalized new fuel economy standards that significantly relax requirements for automakers, marking the latest step in President Donald Trump's push to boost gasoline car sales and unwind policies from the Joe Biden administration that favored electric vehicles.
Under the new rules, the average fleet fuel economy for US automakers will drop to 34.9 miles per gallon (about 14.7 km per liter) by 2031, down from the 50.4 mpg (about 21.4 km per liter) target set under Biden. The move comes as US consumers face sharply higher fuel prices following escalating tensions between the US, Israel, and Iran since late February, according to the report from Gasgoo, a Chinese automotive news outlet.
The Transportation Department said the new standard will reduce compliance costs for automakers by an average of $1,289 per vehicle, though it will increase fuel costs by more than $1,600 over a vehicle's lifetime. Compared with the Biden-era rules, the new standard is expected to raise US gasoline consumption by 4.6% by 2050 while also boosting new vehicle sales.
A reversal of Biden-era rules
In 2024, the Biden administration had finalized rules requiring automakers to improve fuel economy and boost EV production. Those standards mandated annual increases of 8% for model years 2024 and 2025, 10% for 2026, and 2% annually from 2027 to 2031. The new rules also terminate the trading of fuel economy carbon credits among automakers starting in 2028, a practice that had been a significant revenue source for EV makers such as Tesla and Rivian.
The American Automotive Alliance, whose members include General Motors, Toyota, Volkswagen, Hyundai, and Ford, praised the adjustment, saying it "made the right decision" by aligning fuel economy standards with the law and current market conditions. The group argued that the Biden-era rules effectively forced the industry toward electric vehicles, which did not match market reality or consumer demand.
Environmental group Sierra Club opposed the rollback, saying that while US consumers need relief from high costs, the policy change actually reduces pollution constraints on automakers and could increase household fuel and health burdens. The Trump administration has already taken other steps to ease restrictions on gasoline car sales, including eliminating the $7,500 federal EV tax credit last year and, in February, revoking a scientific finding that greenhouse gas emissions endanger public health, along with federal tailpipe emissions standards for cars and trucks.
