Trump admin says review of Biden’s fuel economy standards will lower car prices

Newly confirmed U.S. Transportation Secretary Sean Duffy issued an order directing a review of federal fuel economy standards set during the Biden administration. Duffy said the move aims to lower new vehicle prices for consumers.

Why is the Trump administration reviewing federal fuel economy standards?

On Wednesday, Jan. 29, Duffy sent a memo to the National Highway Traffic Safety Administration (NHTSA). In the memo, he instructed the agency to reassess fuel economy rules for new cars and trucks through the end of the decade.

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“Artificially high fuel economy standards designed to meet non-statutory policy goals, such as those NHTSA has promulgated in recent years, impose large costs that render many vehicle models unaffordable for the average American family,” Duffy’s memo said.

What did the Biden administration’s fuel economy standards entail?

Under the current standards, passenger cars are required to reach an average fuel economy of 65 miles per gallon by 2031. That’s up from 48.7 miles per gallon in 2024. Under the same plan, light trucks, including SUVs and pickups, must achieve 45 miles per gallon, an increase from 35.1 miles per gallon.

According to NHTSA, these rules could reduce emissions by 710 million metric tons by 2050, about equivalent to the carbon output of 1,858 gas-fired power plants. The agency also estimates they would save consumers approximately $23 billion in fuel costs.

However, federal officials acknowledged that the regulations could also make some vehicles more expensive to purchase.

Automakers raised concerns about the cost implications. Car companies claim they could face $14 billion in non-compliance fines as a result of the rules.

What is the new administration saying about these Biden-era regulations?

The Trump administration criticized the Biden-era fuel economy policy. They argue it “diminished the strength” of the U.S. auto industry.

Trump officials cite data from Cox Automotive that show the average vehicle price rose during the previous administration. The data showed vehicles rose from $40,881 in 2021 to $47,218 in 2024 or 15.5%.

“The memorandum signed today specifically reduces the burdensome and overly restrictive fuel standards that have needlessly driven up the cost of a car in order to push a radical Green New Deal agenda,” Duffy said in a statement. “The American people should not be forced to sacrifice choice and affordability when purchasing a new car.”

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What happens next?

The White House stated that the prior administration’s fuel economy standards have “denied Americans the full range of affordable vehicles they need.” They said rolling these standards back will “ultimately lower the price of a car for American consumers.” The NHTSA is now set to conduct a review of all fuel economy standards for vehicles from the 2022 model year onward.