Recent developments in vehicle fuel economy standards have stirred considerable debate among policymakers and stakeholders.
Transportation Secretary Sean Duffy, a former reality TV contestant, announced a significant reevaluation of the Corporate Average Fuel Economy (CAFE) standards that dictate fuel efficiency for vehicles in the United States. Duffy claimed that the existing standards, which mandate a 2 percent annual increase in fuel economy for passenger cars from model years 2027 to 2031 and light-duty trucks from 2029 to 2031, improperly incorporated electric vehicles and termed them “illegally” invalid. He indicated that the Trump administration would not only work to overturn these standards but also cease enforcement of the current regulations.
Duffy emphasized the goal of the revised rules is to make vehicles more affordable and easier to manufacture within the United States. However, experts have raised concerns that rolling back the CAFE standards could lead to declines in fuel efficiency, ultimately resulting in higher fuel costs for consumers over time.
“While it works on reversing those standards, Duffy said the Trump administration would simply stop enforcing the current ones.”
Katherine García, director of the Sierra Club’s Clean Transportation for All program, stated that “making our vehicles less fuel efficient hurts families by forcing them to pay more at the pump.” She added that this move would jeopardize community well-being, limit clean vehicle options, strain financial resources, threaten public health, and heighten climate pollution.
The CAFE standards were initially enacted following the 1973 energy crisis, establishing guidelines for the maximum achievable average fuel economy that car and truck manufacturers can reach in any given model year.
If the Biden administration’s guidelines had been followed, new cars and passenger trucks would need to attain an average fuel economy of 50.4 miles per gallon by 2031. This could have led to average savings of $600 in fuel expenses for vehicle owners over their cars’ lifetimes while avoiding the consumption of over 70 billion gallons of gasoline by 2050, thus eliminating more than 710 million metric tons of emissions — an impact equivalent to removing over 230 million vehicles from the road.
At the same time, Senate Republicans are advancing a budget reconciliation bill that would eliminate fines for automakers that do not comply with existing CAFE standards, effectively rendering those regulations ineffective. Historically, noncompliance penalties have contributed significant funds to federal revenue, with Stellantis incurring over $400 million in civil fines from 2016-2019, and General Motors paying $128.2 million during the 2016-2017 period, according to reports.
“This action puts the well-being of our communities at risk in every way imaginable.”
Automakers have expressed enthusiasm over the prospect of facing no penalties for exceeding fuel economy requirements. Stellantis remarked that current standards do not align with market dynamics, urging that immediate relief is essential to maintain affordability and consumer choice. The Alliance for Automotive Innovation, representing key Detroit manufacturers, has endorsed both the proposed bill and Duffy’s interpretation of the revised standards, despite having praised the Biden administration’s CAFE regulations previously.
Interestingly, these companies, which once voiced commitment to combat climate change and aimed for “zero emissions,” are now aligning themselves favorably with regulations that would permit the production of more polluting vehicles. Notably, Carlos Tavares, former CEO of Stellantis, expressed last October his support for stricter emissions and fuel economy standards in both Europe and the U.S., citing personal experiences that underscore the urgency of addressing climate issues.
Faced with proposals that would exacerbate climate challenges, these automakers are enthusiastically backing more lenient regulations.
This trend is not surprising, given the historical context. Automakers previously supported the Trump administration’s efforts to dilute fuel economy standards and continue to advocate against California’s plans for a ban on gas-powered vehicles by 2035. Their actions suggest a focus on profit maximization over proactive measures to address the environmental crises of wildfires and floods linked to climate change.
