Rule will make cars more affordable, promote consumer choice, and enhance safety
WASHINGTON, D.C. – U.S. Department of Transportation Secretary Sean P. Duffy today released the rule to reset the National Highway Traffic Safety Administration (NHTSA)’s corporate average fuel economy (CAFE) standards. The Biden-Buttigieg administration previously broke the law by setting standards that went far beyond the requirements mandated by Congress – all to artificially juice supply for electric vehicles that American consumers didn’t ask for.
The final initiative – called “Freedom Means Affordable Cars” – will:
- Give automakers the flexibility to manufacturer cars the public wants to buy
- Reduce the average cost of a new vehicle by $1,300 for American families
- Save the American people $138 billion over the next five years
- Prevent more than 300,000 serious injuries and save 1,900 lives by encouraging new car sales
“Thanks to President Trump’s leadership, we have finally ended the illegal mandate that forced automakers to produce more expensive electric vehicles that American families didn’t want. While Joe Biden and Pete Buttigieg pushed a green agenda that made our roads less safe and drove up costs for hardworking Americans, this administration is delivering relief to families and reviving the beating heart of American manufacturing,” said U.S. Transportation Secretary Sean P. Duffy. “With our commonsense standards in place, we are making the American dream affordable again, putting safer cars on the road, and investing in the American autoworker.”
Secretary Duffy’s “Freedom Means Affordable Cars” initiative is among the largest deregulatory actions under the second Trump Administration.
“This rule restores integrity to the national fuel economy program, balancing vehicle affordability and energy conservation goals while improving safety on our roadways,” said NHTSA Administrator Jonathan Morrison. “Newer cars are safer cars. By reducing vehicle prices, more American families will be able to afford newer vehicles, and sensible standards allow automakers more freedom to design and produce vehicles consumers actually want. I’m proud of our fantastic team of expert engineers, economists, and lawyers for the tremendous job they’ve done finalizing this rule.”
The Safer Affordable Fuel Efficient (SAFE) Vehicles Rule III standards restore the program to normalcy and will significantly reduce the cost of vehicles. They will also revive the beating heart of American manufacturing and unshackle the nation’s automotive industry to produce safer, more affordable cars that American families want to buy.
With these new standards, yearly oil consumption in 2050 is projected to be reduced by about 1.3 billion barrels as compared to yearly oil consumption in 2024. In terms of miles per gallon, NHTSA estimates the new standards would achieve a fleet average fuel economy of 34.9 miles per gallon by model year 2031, up from 30.1 mile per gallon for model year 2024.
The unlawful Biden-Buttigieg standards-which forced automakers to make massive capital investments to develop and produce electric vehicles-were responsible for much of the recent increases in vehicle prices seen in recent years.
The rule establishes standards for passenger cars and light trucks for model years 2022 to 2031. You can read the final rule here and learn more here.
Additional Information:
Eliminating the Backdoor EV Mandate
Despite statutory prohibitions against even considering alternative fuel technologies such as EVs when setting standards, the Biden-Buttigieg standards were set so high that they created a backdoor electric vehicle mandate. Automakers and their hardworking employees lost billions complying with the last administration’s regulation – investing in uneconomic production lines and promising thousands of jobs that were never sustainable without massive government support and funneling millions in compliance credits to EV manufacturers. All the while, consumers were denied the choice of what is best for their needs, and families were forced to pay more for vehicles.
Resetting Vehicle Classification
Prior to this rulemaking, automakers made design changes and added equipment to classify small crossover vehicles as light trucks and face less stringent fuel economy requirements, despite not being intended to haul cargo or operate off-road. This final rule will change classification criteria starting in model year 2030 to reflect each vehicle’s intended use accurately, flipping the current fleet mix of approximately 70% light trucks and 30% passenger vehicles to around 70% passenger cars and 30% light trucks.
This reclassification will eliminate the incentive to add equipment and alter designs for classification purposes, which will result in greater availability of lower-cost vehicle options for consumers. Instead, automakers will develop vehicles that meet consumer wants and needs. This could improve the US automotive export market where the current vehicle classification regulations are not compatible with foreign market needs. With the current vehicle classification, manufactures are disincentivized from making hatchbacks, wagons, and smaller footprint vehicles in general.
Eliminating Credit Trading
NHTSA is also eliminating the CAFE credit trading program starting in model year 2028, which artificially propped up the EV industry at the expense of traditional automakers. Eliminating the credit trading program restores fairness, puts all automakers on an even playing field, and ensures that manufacturers are spreading fuel-saving technologies throughout their fleets.