Gas Standards Cut by US Department of Transportation

Highlights

• Policy Shift: The Department of Transportation is reversing climate policies from the Biden administration.
• Fuel Standards: Proposed changes will lower car fuel efficiency standards to 34.5 miles per gallon for model year 2031.
• Market Impact: International manufacturers are advancing electric vehicle technology, while U.S. tariffs limit new models.
• Cost Claims: Trump’s administration claims the changes will lower car costs by $1,000, despite rising gas prices.

The Department of Transportation under President Donald Trump is moving to reverse more of the climate policies that had been enacted by President Joe Biden. Under a proposed rulemaking by the National Highway Traffic Safety Administration, fuel efficiency standards for cars and light trucks in model year 2031 will be reduced to an average of 34.5 miles per gallon, down from the standard of 50.4 miles per gallon that was part of Biden’s plans to encourage more adoption of electric vehicles among US drivers.

The move was expected since Trump re-took office. Transportation Secretary Sean Duffy ordered the NHTSA to review fuel efficiency standards in January a day after he assumed the title. The current administration also ended a tax credit for buying electric vehicles over the summer. In the meantime, international manufacturers are racing ahead in their progress on building better EVs, offering other markets more exciting models that won’t arrive in the US thanks to tariffs.

While Trump’s announcement today claimed that the change would reduce the average cost of a new car by $1,000 and offer a savings of $109 billion over five years, gas prices are on track to increase if the Environmental Protection Agency does successfully repeal the finding that climate change causes human harm. Plus there’s the incalculable financial and human cost of a growing number of catastrophic weather events that have been predicted if the planet continues to get warmer.