In a significant policy reversal, the administration of President Donald Trump has announced it will revoke stricter fuel-economy regulations established under former President Joe Biden. The White House frames this decision as a move to make new vehicles more affordable for American consumers.
Big Three Automakers Back Policy Shift
The official announcement was made on Wednesday, with President Trump hosting leaders from Detroit's major car companies in the Oval Office. The CEOs of Ford and Stellantis, along with a top official from General Motors, were present, signaling substantial industry support for the regulatory rollback.
In a statement on the social media platform X, the Trump administration argued that the Biden-era rules would have increased the price of a new car by approximately $1,000. They claim that Trump's reset of the standards will save Americans a total of $109 billion.
What Are CAFE Standards?
The policy in question revolves around the Corporate Average Fuel Economy (CAFE) standards. These regulations, first introduced in 1975 following the Arab oil embargo, mandate how many miles a vehicle must travel per gallon of fuel. The Biden administration had sought aggressive annual increases, aiming for an average of over 50 miles per gallon by 2031.
However, the Trump administration has consistently opposed these targets. In a proposed rule from June, officials contended that the previous standards were unfairly calculated by including electric and hybrid vehicles, making them unattainable for traditional gasoline-powered cars and forcing a market shift.
Industry Praise and Environmental Criticism
Ford CEO Jim Farley welcomed the change, stating it aligns rules with "market realities." He emphasized that progress on emissions and efficiency could still be made while preserving customer choice and affordability, calling the decision a "win for customers and common sense."
The move is part of a broader push by Trump and congressional Republicans against what they label an electric vehicle "mandate." This includes repealing clean-energy tax credits and challenging states like California that set their own emission limits.
Conversely, the decision has drawn sharp criticism from environmental advocates. Gina McCarthy, a former senior official under Presidents Biden and Obama, accused the administration of ignoring public health and the environment. She warned that the rollback would slow the auto industry's transition to cleaner vehicles, leave the US behind in global innovation, and lead to higher gas costs and increased tailpipe pollution.
The full details and long-term impact of the regulatory reset are still emerging, setting the stage for continued debate over economic priorities and environmental responsibility.
