The Trump administration is poised to undo fuel economy standards set by the Biden administration, claiming the previous standards were illegally used to create an electric vehicle mandate.
On June 6, the National Highway Traffic Safety Administration published an interpretive rule that will reverse new fuel economy standards set in 2022 and 2024 that sharply increased miles-per-gallon requirements for passenger vehicles, known as corporate average fuel economy (CAFE). The rule will also reset standards for medium- and heavy-duty trucks.
NHTSA’s rule reinterprets the statute that gives it the authority to set fuel economy standards. The agency claims the Biden administration considered factors that are explicitly prohibited, thereby artificially and unlawfully increasing the standards.
“Under President Trump’s leadership, we are making vehicles more affordable and easier to manufacture in the United States,” Transportation Secretary Sean Duffy said in a statement. “The previous administration illegally used CAFE standards as an electric vehicle mandate – raising new car prices and reducing safety. Resetting CAFE standards as Congress intended will lower vehicle costs and ensure the American people can purchase the cars they want.”
Fuel economy standards skyrocket
NHTSA’s rule is based on the agency’s 2022 and 2024 rules that significantly increased fuel economy standards.
CAFE standards were established in the 1970s in response to the oil crisis. In 1978, cars were getting about 18 mpg, increasing to 27.5 mpg by 1985. Fuel efficiency stayed at that mark until 2010, when former President Barack Obama set a higher standard of 43.7 mpg by model year 2020 cars. The Biden administration’s standards increased fuel efficiency sharply.
The 2022 rule increased standards for model years 2024-26 passenger vehicles. Passenger vehicle fuel efficiency requirements are set at 59 mpg by 2026 compared to 44 mpg for model year 2023 cars.
In 2024, a NHTSA rule established fuel economy standards for cars model year 2027 and beyond. That sets the standard to 65 mpg for passenger vehicles by 2031. The rule also lowers the amount of fuel consumed by heavy-duty pickup trucks from 5.6 gallons per 100 miles in model year 2022 trucks to 2.85 gallons in model year 2035 trucks.
At the time the rule was finalized, the Department of Transportation claimed the new fuel economy standards would save car owners more than $600 in fuel costs over the lifetime of a vehicle. Higher standards would also save nearly 70 billion gallons of gasoline through 2050.
Unlawful calculations
NHTSA’s latest rule regarding fuel economy standards sets the stage to rewrite them on the basis that previous standards were illegally established.
The agency’s authority to set fuel economy standards comes from 49 U.S.C. 32902. Subsection (h) sets limitations NHTSA must abide by when calculating those standards:
- May not consider the fuel economy of dedicated automobiles (vehicles operating only on alternative fuel, including electricity)
- Shall consider hybrid automobiles to be operated only on gasoline or diesel fuel
- May not consider, when prescribing a fuel economy standard, the trading, transferring or availability of credits
However, under the Biden administration, NHTSA interpreted those limitations to apply only to the standard-setting year (model years being evaluated as the subject of the rulemaking).
Consequently, the latest fuel economy standards consider electric vehicles, miles-per-gallon when hybrid vehicles are operating on alternative fuels and credits accrued when exceeding standards in any given year.
“Specifically, subsection (h)(1) states that the Secretary ‘may not consider the fuel economy of dedicated automobiles,’” NHTSA’s interpretive rule states. “This does not mean that NHTSA may consider the fuel economy of dedicated automobiles in certain circumstances or during certain timeframes of the agency’s choosing or provided that certain criteria specified by the agency are met. Rather, the prohibition means that NHTSA may not consider the fuel economy of dedicated vehicles in any respect and at any point in the process of setting fuel economy standards. Yet that is precisely what the agency did in promulgating the previous standards.”
Current fuel economy standards are also based on calculations that considered zero-emission mandates implemented in California and other states. Under Trump, NHTSA said that assumes “significant numbers of EVs would continue to be produced regardless of the standards set by the agency, in turn increasing the level of standards that could be considered maximum feasible.” On May 22, Congress repealed California’s so-called electric vehicle mandates.
Commercial truck fuel economy
NHTSA’s rule also goes after the commercial medium- and heavy-duty on-highway vehicle and work truck fuel efficiency improvement program.
The program addresses fuel economy of commercial trucks. According to NHTSA, applicable statute mentions civil penalties for noncompliance. However, the statute does not explicitly give the agency the authority to enforce the penalties.
Also, the law does not explicitly allow a credit system like CAFE standards do. Regardless, a credit system has been used.
NHTSA claims that because CAFE standards went against consideration limitations and commercial truck fuel economy standards lacked certain statute authorizations, both are ripe for a new rulemaking to reset them.
“Commercial purchasers are well aware of their own fuel economy needs,” the rule states. “Their purchases of MDHD vehicles are informed business decisions that occur in a highly competitive and self-regulating market. Government intervention in excess of statutory requirements and authority interferes with the efficient functioning of this market.”
Now that NHTSA’s updated interpretation of statutes has been established, it can move forward with resetting the fuel economy standards.
Emission standards next?
The same presidential directive has been given to the Environmental Protection Agency, putting emission standards on the chopping block.
On his first day back in office, President Donald Trump signed executive orders addressing regulations and energy-related policies. The executive order “Unleashing American Energy” included provisions “to eliminate the ‘electric vehicle (EV) mandate’ and promote true consumer choice” and “removing regulatory barriers to motor vehicle access; by ensuring a level regulatory playing field for consumer choice in vehicles …”
A week later, Duffy issued a memorandum to begin the process of rolling back updated fuel economy standards, stating the 2022 and 2024 final rules are contrary to Trump’s executive orders.
Although the DOT sets fuel economy standards for light-duty vehicles, the agency has no control over the much stricter vehicle emission standards. Those fall under the Environmental Protection Agency’s jurisdiction.
Most notable for truck drivers is a 2024 EPA rule that set much higher truck emission standards at the federal level. That rule effectively requires 25% of sleeper cab tractors to be zero-emission by 2032. A separate rule finalized a week prior reduced passenger vehicle emission standards by 50% from model year 2026 to 2032. The EPA will likely have its sights set on both rules. LL
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