Trump Administration Rolls Back Biden-Era CAFE Fuel Economy Standards

On Wednesday, December 3, 2025, President Donald Trump formally announced the termination of the Corporate Average Fuel Economy (CAFE) standards that had been established by the Biden administration. This decisive action is being framed as a necessary measure to alleviate regulatory burdens and ultimately lower the cost of vehicles for American consumers. President Trump asserted that the preceding fuel efficiency mandates imposed excessively restrictive limitations on automakers, which he contends contributed to rising vehicle prices, a situation exacerbated by the push for electric vehicles.

The announcement took place during a ceremony in the Oval Office, attended by key industry leaders, including executives from Ford and Stellantis, as well as Secretary of Transportation Sean P. Duffy. The National Highway Traffic Safety Administration (NHTSA) subsequently introduced revised, less stringent requirements. Should these new rules receive final approval, the industry-wide average target will be set at approximately 34.5 miles per gallon (mpg) for the 2031 model year. This figure directly overturns the Biden administration’s goal, which aimed for the industry to achieve roughly 50 mpg by the same year.

Secretary of Transportation Sean Duffy emphasized that the former regulations were deemed “completely unattainable” and artificially inflated the prices of new automobiles. The Trump administration projects that this proposed rollback will translate into an average savings of $1,000 per new vehicle for American households, amounting to a collective $109 billion in savings over a five-year period. This move follows a broader strategic shift; back in September 2025, the Trump administration had already rescinded tax incentives related to electric vehicles as part of a comprehensive review of its predecessor’s environmental policies.

Conversely, critics argue that this policy reversal will intensify the climate crisis, given that the transportation sector stands as the leading source of greenhouse gas emissions across the United States. Opponents also suggest that this decision jeopardizes the global momentum toward adopting green technologies. It is worth noting that the foundational CAFE standards, originally enacted by Congress in 1975, historically maintained a bifurcated structure, featuring separate benchmarks for passenger cars and light trucks.

Executives from both Ford and Stellantis voiced their support for the administration’s action. Antonio Filios, CEO of Stellantis, commented that the Trump administration’s move aligns the CAFE metrics with “real-world market conditions,” thereby enabling the offering of competitively priced vehicles to consumers. Stellantis, in fact, had previously incurred over $590 million in fines since 2016 for failing to meet the prior efficiency standards. Furthermore, the repeal of the Environmental Protection Agency’s (EPA) emission standards for tailpipe pollutants is also integrated into this policy shift. While the NHTSA previously estimated that the Biden-era standards would save consumers $23 billion in fuel costs, the current policy prioritizes ensuring “freedom of choice” for vehicle buyers.