The Trump administration has rolled back fuel economy standards to 34.9 miles per gallon by model year 2031, the lowest target in over a decade and a significant reversal of previous regulations. The new rule, announced by the Department of Transportation under Transportation Secretary Sean Duffy, effectively undoes progress made under the Biden administration and surpasses the cuts imposed during Trump's first term in 2020, when standards were set at 40 mpg. The decision is expected to discourage manufacturers from developing electric vehicles and plug-in hybrids, as these vehicles will no longer be counted towards fleet averages to earn credits, and emissions credits themselves will be eliminated from 2028 onwards.

The rollback occurs despite rising fuel prices and represents a significant departure from the original purpose of CAFE standards, established in the 1970s to protect consumers from fuel cost shocks. Context reveals the stark regression: the Obama administration had targeted 54 mpg by 2025, which was never achieved due to Trump's first-term cuts. The new rule does include one modest improvement—a tightening of the light truck loophole starting in 2030, which could shift the fleet mix from 70 per cent light trucks to 70 per cent passenger cars—though this offers minimal compensation for the overall weakening of efficiency standards. Additionally, the Transportation Department has announced it will not enforce existing CAFE violations dating back to 2022.