Trump Moves to Roll Back U.S. Fuel Economy Rules, Boosting Gasoline Vehicle Sales

President Donald Trump has unveiled a sweeping proposal to slash U.S. fuel economy standards, reversing one of former President Joe Biden’s key climate policies and easing compliance for automakers still heavily reliant on gasoline-powered vehicles. Announced Wednesday, the plan would lower required fleetwide fuel efficiency to 34.5 miles per gallon by 2031-down sharply from the 50.4 mpg target finalized under Biden.

The National Highway Traffic Safety Administration (NHTSA) outlined a rollback of past standards and minimal increases of just 0.25% to 0.5% annually through 2031. This marks a stark shift from Biden-era increases of up to 10%. While the proposal is expected to reduce upfront vehicle costs by an average of $930, NHTSA also projects it will increase fuel consumption by 100 billion gallons through 2050 and raise carbon emissions by about 5%.

Automakers stand to save $35 billion in compliance costs, including major benefits for GM, Ford and Stellantis. However, critics warn the move will burden American drivers with as much as $185 billion in additional fuel costs while weakening climate progress. California Governor Gavin Newsom accused Trump of “gutting” protections that keep communities’ air clean.

The proposal also seeks to eliminate credit trading among manufacturers by 2028-a significant blow to EV-focused companies such as Tesla and Rivian, which rely on selling credits to competitors. Environmental groups argue the changes cater to the oil industry and will increase pollution equivalent to adding 7.7 million vehicles to U.S. roads by 2035 compared to Biden’s rules.

The announcement comes as Trump continues broader efforts to revive the traditional auto sector and pull back incentives for electric vehicles, including ending EV tax credits and blocking state-level zero-emission mandates.

Fuel-economy rollbacks change US auto-industry Scope 3 emissions trajectories, and they raise the disclosure and financing bar for automakers with international sales exposure to EU emissions rules. Our climate-action and ESG-strategy teams help clients evaluate what these rollbacks mean for multi-jurisdiction fleet and disclosure strategy.