US Rolls Back Fuel Economy Rules as 26 States Sue to Block Them

The Trump administration has finalized a significant rollback of America’s national fuel economy targets for passenger cars and light trucks. Under the revised framework, the National Highway Traffic Safety Administration has cut the fleet-wide average it expects automakers to hit by 2031 from 50.4 miles per gallon down to 34.9 mpg — a reduction of roughly fifteen miles per gallon that reshapes efficiency planning for the entire US auto industry.

The Department of Transportation, led by Secretary Sean Duffy, frames the change as a consumer relief measure. Regulators estimate that building each vehicle could cost manufacturers about $1,289 less, savings the agency argues could translate into lower sticker prices on dealer lots. Critics of the old standard have long contended that aggressive efficiency requirements push up upfront costs and steer buyers away from affordable models.

That short-term relief, however, comes with a longer-term bill. The agency’s own projections suggest the average driver will spend over $1,600 more on fuel across the life of a vehicle under the loosened rules. Collectively, American motorists are expected to forgo close to $220 billion in fuel savings — money that, by the government’s own math, would flow to oil producers instead of staying in household budgets.

The rollback extends beyond the pump. The CAFE credit trading program, which has allowed battery-electric automakers to sell surplus efficiency credits and bankroll EV development, is slated to disappear in 2028 with no replacement mechanism. That removes a revenue stream several EV-focused manufacturers have leaned on. Meanwhile, federal estimates point to a 4.6 percent rise in US gasoline consumption by 2050 — roughly 458 billion additional litres — with corresponding increases in greenhouse gas emissions and air pollution. The agency’s analysis did not factor in the future costs of climate-related damage.

California Attorney General Rob Bonta is leading a coalition of 26 states, counties and major cities, joined by environmental groups, in a lawsuit filed with a US Court of Appeals. The plaintiffs argue the transportation authority sidestepped its legal duty under the Energy Policy Act to set standards at the technically and economically “maximum feasible level.” Among their claims: regulators excluded millions of EVs already on US roads from their calculations and brushed over weaknesses in their safety and affordability analysis. The court will now decide whether the rule survives or must be rewritten.