The Trump administration finalized new lower vehicle fuel economy standards on Monday, dropping the target fleetwide average to 34.9 miles per gallon by 2031. Finalized by the National Highway Traffic Safety Administration, the new rule rolls back the previous 50.4 miles per gallon target set under the Biden administration to make gas-powered cars and light trucks more affordable.
Lower Fuel Economy Targets and Economic Projections
Transportation Secretary Sean Duffy stated that the new standards will save Americans $138 billion over the next five years and reduce the average cost of a new car by $1,300. Economists note that lower-technology vehicles running on gasoline are cheaper to purchase initially. However, the Department of Transportation’s own estimates acknowledge that the policy will increase fuel consumption and carbon dioxide emissions for decades.
The new target of 34.9 miles per gallon by 2031 sits below the 35.4 miles per gallon already achieved by new cars and light trucks in 2024. According to estimates from the American Council for an Energy-Efficient Economy, the eliminated Corporate Average Fuel Economy standards would have saved personal vehicle owners an average of more than $600 in fuel costs over the life of a new vehicle.
Rachel Aland, transportation director at the American Council for an Energy-Efficient Economy, criticized the rollback. “Gutting fuel economy standards means wasting fuel and spending more for every mile traveled,” Aland said.
Industry Support and Environmental Opposition
Major automakers welcomed the regulatory shift. The Alliance for Automotive Innovation—a trade group representing General Motors, Toyota, Volkswagen, Hyundai, Ford, and other manufacturers—stated that the government made the right call to align fuel economy standards with current market conditions. The group argued that previous rules effectively required a switchover to electric vehicles that was out of step with customer demand.
Conversely, environmental organizations condemned the decision. Garrett Gee, a senior attorney with the Southern Environmental Law Center, told FOX13 that the rule is a major attack on the bipartisan consensus that conserving energy benefits the public. Gee pointed to independent analyses showing significant increases in local air pollution and carbon emissions, noting that drivers will face higher costs at the gas pump over a vehicle’s lifespan despite lower upfront purchase prices.
The Sierra Club also announced plans to fight the rollback. The organization stated that while Americans need relief from high costs, the administration is giving automakers a free pass on pollution and handing families the bill through their health and at the gas pump.
Impact on Regional Manufacturing and Fuel Prices
The regulatory change arrives as U.S. drivers contend with sharply higher fuel prices following the start of the U.S.-Israeli war with Iran in late February. Environmental advocates argue that vehicles with lower fuel efficiency leave motorists more vulnerable to these price spikes.
In Tennessee, Ford previously announced in December 2025 that it was no longer planning to produce electric vehicles at its BlueOval City facility in Haywood County, followed by the layoff of 150 employees from the facility in May.
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