Republicans in the Senate are considering a measure in President Trump’s big domestic policy bill that would essentially nullify the fuel efficiency rules for cars and light trucks that have been in place for nearly 50 years.
The provision would eliminate fines for any automaker that failed to comply with federal Corporate Average Fuel Economy standards, which were created by Congress in 1975. Over time, those efficiency rules have gotten stricter, pushing automakers to improve the mileage of their cars and trucks and to introduce innovations like the Toyota Prius hybrid.
Environmentalists fear that without penalties to enforce compliance, automakers could freely ignore those rules, leading to expanded gasoline use, higher fuel prices and more pollution from millions of tailpipes. The measure could also slow the growth of electric vehicles, which are already facing stiff headwinds under the Trump administration.
“If polluters are told that there’s no penalty for polluting, what do you think they’re going to do?” said Daniel Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity, an environmental group. “They’ll be perfectly happy to pollute more and make more gas guzzlers.”
Automakers including General Motors and Stellantis have welcomed Republican moves to relax fuel economy standards, relieving them from paying hundreds of millions of dollars in fines when they fall short. Yet experts say abolishing the penalties could be unfair to carmakers like Toyota that have invested in fuel-efficient technology. Toyota declined to comment.
Democrats unsuccessfully challenged the measure with the Senate parliamentarian, a nonpartisan official who enforces the chamber’s rules and has been ruling on what can be included in Mr. Trump’s domestic policy bill. Senate Republicans are trying to shield the legislation from a filibuster so that it can pass with a simple majority, but to do so under Senate rules, the bill must only include items that directly affect federal spending and don’t add to long-term deficits.
While the parliamentarian ruled against several energy-related provisions in Mr. Trump’s bill, the language to eliminate fuel efficiency penalties survived. It was included in updated legislation released Wednesday by the Senate Committee on Commerce, Science and Transportation, which is led by Senator Ted Cruz, Republican of Texas.
A summary published by the committee said the measure would bring down automobile prices “modestly” by eliminating “penalties on automakers that design cars to conform to the wishes of D.C. bureaucrats rather than consumers.”
The fuel economy rules, known as CAFE standards, were adopted amid the 1970s oil crises in order to curb America’s dependence on foreign crude. Since then, they have helped reduce the nation’s oil consumption by roughly one-quarter, or five million barrels per day, according to the Transportation Department.
Under updated rules finalized by the Biden administration last year, automakers would have had to steadily increase fuel economy so that, across their product lines, passenger cars would average 65 miles per gallon by 2031, up from around 48 miles per gallon today. Many companies were expected to sell more electric vehicles to comply.
That rule was enforced by fines: Any car company that couldn’t meet the standard would have to pay up to $16 for every tenth of a mile per gallon it fell short, multiplied by the number of cars the company sells.
Many automakers chafed under those restrictions. “The combination of high penalties with the nearly impossible CAFE standards finalized during the previous administration is a major problem,” said John Bozzella, president of the Alliance for Automotive Innovation, which represents 42 car companies that produce nearly all the new vehicles sold in the United States.
The Trump administration has sought to roll back most of the Biden administration’s car rules. In June, Transportation Secretary Sean Duffy claimed that the Biden-era fuel economy standards were improperly written and would need to be “reset.” The Environmental Protection Agency is also planning to repeal Biden-era pollution limits for passenger vehicles that were designed to reinforce the fuel economy rules.
The Senate measure would not directly modify federal rules but it would set the penalties for noncompliance at $0, rendering any fuel economy standards toothless.
That would be a setback for companies that produce only electric vehicles. Because their cars have no tailpipe emissions, Tesla, Rivian and others accumulate clean air credits under the fuel economy rules that they can sell to companies that fall short. For Tesla, those credits have sometimes accounted for all of the company’s quarterly profit.
“It would unfairly penalize automakers who have invested a lot in manufacturing more fuel-efficient vehicles,” said Albert Gore III, executive director of the Zero Emission Transportation Association, a trade group that represents the electric vehicle industry.
Other automakers could benefit. General Motors has paid more than $128 million in penalties since 2022, according to government data. Stellantis, which owns Jeep, RAM and Chrysler, has paid almost $583 million in penalties since 2018.
“This is really a windfall to G.M. and Stellantis as far as I can tell,” said Ann Carlson, a professor of environmental law at the University of California, Los Angeles, and former chief counsel of the National Highway Traffic Safety Administration.
Stellantis said in a statement that it “supports improving fuel efficiency as evidenced by the range of powertrain options in our lineup, but the current standards are out of sync with the market and the Senate proposal is necessary to preserve affordability and freedom of choice.”
G.M. said in a statement that it would continue to invest in making vehicles more fuel-efficient. The company recently announced it would abandon plans to make electric motors at a factory near Buffalo and instead put $888 million into building V-8 gasoline engines for pickup trucks and sport utility vehicles.
“This new generation of engines is expected to deliver stronger performance than today’s engines while benefiting fuel economy and reducing emissions,” G.M. said.
Higher gasoline consumption could also benefit the oil industry, which has fought stricter fuel economy standards for years.
It is unclear how much automakers might ease up on fuel efficiency gains if the Senate proposal were to pass. California still sets limits on greenhouse gas emissions from automobile pollution that run through model year 2025, although Congress recently moved to block a California plan to tighten those limits further.
Carmakers that have a history of producing efficient vehicles, like Toyota and Honda, might face pressure from rivals that no longer want to spend money on fuel-saving technologies, such as lighter-weight materials or engines that temporarily shut down when the car is at a stop light.
“If you have competitors in the marketplace that do not need to invest in pollution controls, it’s going to be harder to compete with them,” said Greg Dotson, an associate professor at the University of Oregon School of Law and former Democratic chief counsel for the Senate Committee on Environment and Public Works.
Republicans say that rolling back Biden-era vehicle rules will reduce car prices. Environmentalists counter that a return to the age of gas guzzlers could lead to increased fuel prices that would cancel out any savings, even without taking into account the costs from additional pollution.
The fuel efficiency standards “have been extremely effective in making the overall fleet more efficient and have saved Americans money when they go to the gas pump,” said Katherine García, director of the Clean Transportation for All Campaign at the Sierra Club.
Automakers will benefit in the short term, because they usually make most of their profits on large vehicles and lose money on electric vehicles. While the Biden-era fuel economy standards did not require electric vehicle sales, it was easier for carmakers to comply with the rules if some of the vehicles they sold had no tailpipe emissions.
As part of the domestic policy bill, Republicans are also rolling back financial incentives for electric vehicle buyers, while the Trump administration has been phasing out subsidies and loans for fast chargers, battery factories and facilities to process battery materials.
Those policies are very likely to undercut electric vehicle sales, which could make it more difficult for U.S. automakers to compete globally with Chinese companies that are selling electric vehicles in Latin America, Europe and other markets.
China accounted for 65 percent of electric vehicles sold globally, according to the Alliance for Automotive Innovation. The United States accounted for only 10 percent.
“It’s a cruel irony that maybe the best set of policies to set up the United States to compete with China is being unwound,” Mr. Gore said.
Brad Plumer is a Times reporter who covers technology and policy efforts to address global warming.
Jack Ewing covers the auto industry for The Times, with an emphasis on electric vehicles.
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