The Trump administration officially unveiled its new, significantly loosened mile-per-gallon (MPG) standards. President Donald Trump and Transportation Secretary Sean Duffy argued that the much stricter rules proposed by the former Biden administration back in 2024 were legally invalid, claiming they violated a 50-year-old law by ignoring the effect of electric vehicles on achieving those standards.
For years, Republicans have framed the stringent MPG requirements as a sneaky “EV mandate”. The higher the mandated fuel economy target, the more an automaker would be forced to produce and sell EVs to balance its fleet average. Now, the tide has turned back toward the internal combustion engine.
The big question, however, was about compensation. When asked whether the government would somehow reimburse Detroit automakers, including General Motors, Ford and Stellantis, for the billions they’ve already spent developing new EV models and retooling factories under the previous administration’s assumptions, President Trump’s response was a swift, dismissive “No, I won’t do that”.
In fact, he offered a rather blunt business lesson: “No, no. I’m not going to let them get it back, they’re going to do great. You know how they get it back? They’re going to do great from this moment on”.
The good news for the automakers is that they appear satisfied with the new reality, which generally encourages them to produce more profitable, ICE-powered vehicles that align better with current customer demand. Both Ford CEO Jim Farley and Stellantis CEO Antonio Filosa were quick to praise the new proposed standards for better reflecting what consumers actually want to buy.
President Trump also took the opportunity to tout the effectiveness of his tariffs on imported cars, claiming they are successfully forcing production back to the US and boosting Detroit’s bottom line. Commerce Secretary Howard Lutnick backed this up, noting a significant surge in domestic stock prices since January. According to the President, the only reason top executives from Ford, Stellantis, and GM were even present at the Oval Office ceremony was because the tariffs are preventing them from building their factories in Mexico and other countries.
