Former US President Donald Trump has delivered a massive cut to corporate fuel economy targets. Following the earlier repeal of emission penalties, this is the latest policy shift designed to ease the pressure on manufacturers to sell more electric vehicles.
The goalpost for Corporate Average Fuel Economy (CAFE) standards, which had been set by the previous administration at a demanding 50.4 mpg average by 2031, has been dramatically moved back to 34.5 mpg, a significant 45% reduction in compliance effort.
Though the proposal still requires final approval, it is widely expected to pass without modification, effectively allowing automakers to produce what they desire without the regulatory stick.
The reaction from industry leaders was immediate and celebratory. Speaking on Fox and Friends, Ford CEO Jim Farley welcomed the changes, arguing that the former CAFE standards were “totally out of touch with the market reality”. Farley was remarkably candid, admitting the previous rules “forced” his company and others to prioritize EVs over customer demand. “This is a win for affordability and common sense”, Farley claimed, promising the change would allow Ford to offer “more affordable pricing on our most popular models” and release new, cost-effective, American-built vehicles.
Ford itself became the third-largest hybrid brand in the US last year, partly by offering the hybrid version of its flagship F-150 pickup as a free option. Furthermore, the company has heavily invested in EVs, with a new platform set to debut in 2027. Farley insisted that the industry is not reverting to the days of extreme gas guzzlers, but rather opening up customer choice.
The immediate impact of the rollback is expected to increase profits for manufacturers previously penalized for selling higher volumes of thirstier, dirtier vehicles. Automakers have yet to specify exactly how much they will reduce vehicle prices now that the CAFE standards and emission penalties have been slashed. The V8 fans and those wary of the EV transition have just received the strongest possible regulatory endorsement.
