The Trump administration says its proposal to roll back vehicle fuel economy standards, announced officially in the Oval Office on Wednesday, is an attempt to shave dollars off the ballooning cost of new cars in the US.
But the intended price drops likely won’t show up on dealership lots and showroom floors for months if not years, given the length of automakers’ product planning schedule. It would also likely force Americans to pay more, long-term, at another place they tend to visit more frequently: the pump.
The proposal from the US Department of Transportation would require automakers to reach a fleet-wide average of 34.5 miles per gallon by model year 2031, down from the 50.4 miles per gallon benchmark set by the Biden administration. (The Biden-era rules called for a 49 mile per gallon average in 2026.) The department estimates the change could save US auto buyers around $1,000 per car, adding up to $109 billion over the next five years. New vehicles now cost more than $49,000 on average, according to Edmunds. The government will accept public comments on the proposal through mid-January. It could be finalized sometime next year.
The rollback is part of a larger federal about-face on not only auto policy, but the government’s attitude on climate change. The Biden administration took a carrot-and-stick approach to vehicles and their effect on the environment. Light duty cars and trucks alone are responsible for some 15 percent of US greenhouse gas emissions, according to the US Environmental Protection Agency. The previous administration tried to boost electric vehicle adoption by using tax subsidies for consumers and manufacturers interested in building fuel efficient vehicles and technologies, including batteries. It also introduced penalties for those unable or unwilling to meet stricter environmental standards. Automakers should be able to hit next decade’s goals by selling more electric vehicles, the government then reasoned.
But as consumers failed to take to EVs quite as quickly as once hoped, automakers complained the rules were too onerous. “We’ve been clear and consistent: The current [fuel economy] rules finalized under the previous administration are extremely challenging for automakers to achieve given the current marketplace for EVs,” John Bozzella, the president and CEO of top auto trade organization the Alliance for Automotive Innovation, wrote in a media statement Wednesday.
The new proposal, though intended to make new cars more affordable, won’t be a quick fix for consumers looking for price relief, analysts and environmental advocates say. “The regulatory landscape remains stop-and-start,” Jessica Caldwell, the head of insights at Edmunds, said in a media statement. The last Trump administration rolled back fuel economy standards, too. What might the next president do? Meanwhile, the administration continues to waffle on auto tariffs, which have forced US and global automakers to think about not only where its vehicles are manufactured, but where its parts and base materials are made, too. That complexity adds expenses to automaking.
Also pushing up costs for automakers: the challenge of developing new technology like automated vehicle features, and figuring out how to keep selling gas-powered vehicles to Americans while drivers in other countries take the leap to EVs. “Easing these requirements helps at the margins,” says Caldwell, “but it is unlikely to dramatically alter the broader commitments [automakers] have already made.”
The move, if finalized, could be better news for gas companies. “Weakening fuel economy standards won’t do much to make cars more affordable but is certain to make Americans buy a lot more gasoline,” says Albert Gore, the executive director of the Zero Emission Transportation Association, a group that represents companies up and down the electric vehicle supply chain.
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