The Trump administration has begun formally rolling back federal fuel economy requirements for new vehicles, part of a broader shift away from policies that promote cleaner cars. At a White House event attended by executives from several major automakers, President Trump said the change will lower vehicle prices for consumers and criticized the previous rules as “ridiculously burdensome.”
The standards in question are the Corporate Average Fuel Economy (CAFE) rules, which require an automaker’s fleet to meet increasingly stringent average fuel-efficiency targets. Automakers that fall short previously faced fines or had to buy credits from firms that over-performed on efficiency, such as electric-vehicle makers.
Consumer Reports and other analyses have challenged the claim that stricter rules necessarily raise vehicle prices, noting longer-term savings from reduced fuel use. Nonetheless, the administration has already weakened CAFE enforcement by removing associated fines through the One Big Beautiful Bill Act. Under the Biden administration, CAFE targets were set to improve fleet efficiency by about 2% per year. The new proposal would roll targets back to a 2022 baseline and raise them by only 0.5% annually.
The proposed rule now enters a public-comment period at the Department of Transportation before it can be finalized.
This move comes alongside other actions narrowing vehicle pollution and EV-support policies. The administration has been rolling back EPA tailpipe greenhouse-gas rules that also pushed automakers toward cleaner vehicles. Congress has eliminated the federal consumer tax credit for EV purchases, ended a tax credit for installing home EV chargers (scheduled to stop in June 2026), cut other clean-energy credits earlier than planned, and voted to revoke federal waivers that allowed California to require zero-emission vehicles. The administration also temporarily delayed a federal program to build a nationwide high-speed EV-charger network.
Trump campaigned against what he called an “electric vehicle mandate” and pledged to rescind policies that encouraged EV adoption; the current actions follow through on that promise.
The rollback is partly intended to benefit automakers. Allowing a higher share of large trucks and SUVs without penalty can boost automakers’ profitability because those vehicles are popular and bring higher margins. Executives have said the regulatory rollback will help earnings and offset costs such as tariffs. Some automakers argued that Biden-era rules were difficult or “unworkable” for planning and operations.
Still, automakers face a global market where many countries retain strong climate policies, and competition from increasingly capable and affordable Chinese EV makers is intensifying. Ford CEO Jim Farley praised the administration’s move for aligning rules with market realities but emphasized that his company still plans to develop affordable electric models. He said he expects EV adoption to rise over time and that the market—and perhaps regulations—will continue to evolve.
Industry planning is complicated by shifting rules across administrations. Fuel-economy and emissions policies have swung from Obama’s ambitious targets to Trump’s earlier rollback, then to Biden’s reinstatement and strengthening, and now to the current administration’s reset, requiring automakers to plan amid ongoing regulatory uncertainty.