As the rest of the world speeds ahead toward an electrified future, the U.S. is doubling down on gas-powered cars.
President Trump announced a proposal this week to slash stricter fuel economy standards put in place during the Biden administration. By reversing the standards, the White House further aligns itself with the oil and gas industry, with some automakers happily going along for the ride.
“We’re officially terminating Joe Biden’s ridiculously burdensome, horrible actually, CAFE standards that impose expensive restrictions,” Trump said, referencing the Corporate Average Fuel Economy rules. “And all sorts of problems – all sorts of problems for automakers.”
The president was joined by Ford CEO Jim Farley, Stellantis CEO Antonio Filosa and a representative from General Motors for the announcement, which took place at the White House on Wednesday. “Today is a victory for common sense and affordability,” Farley said at the event. “We believe that people should be able to make a choice, as you said, Mr. President, and we will invest more in affordable vehicles.”
Regulations put in place during the Biden administration would require new cars sold in the U.S. to average more than 50 miles per gallon by 2031. That rule, designed to push automakers to reorient their business around EVs, will drop to 34.5 miles per gallon under Trump’s proposal. The president also reiterated his plans to end a set of EPA rules that limit tailpipe pollution, a change that the oil and gas industry pushed for.
Fuel rules tend to shift between presidential administrations, with Democrats pushing for environmentally-minded standards and Republicans stripping away regulations. The White House characterized the changes, designed to slow the U.S. shift toward electric vehicles, as a cost-saving measure for consumers.
“The Biden standards would have compelled widespread shifts to EVs that American consumers did not ask for, accompanied by significant cost-of-living increases,” the administration wrote in a fact sheet on the changes.
In 2025, high car prices are one part of a puzzle for Americans trying to make ends meet. High interest rates, persistent inflation and Trump’s own tariffs on imported cars and car parts have created a perfect storm of unaffordability for car buyers.
The high cost of driving
Cars are really expensive right now. The average price for a new vehicle inched above $50,000 for the first time in September, according to a report from Kelley Blue Book. That average rose by almost $2,000 compared to 2024. The average price of EVs, which cost more up front and save drivers cash in the long run, was $8,000 higher during the same time frame.
“The $20,000-vehicle is now mostly extinct, and many price-conscious buyers are sidelined or cruising in the used-vehicle market,” Cox Automotive Executive Analyst Erin Keating said in the report, which also noted the impact of cost pressure from tariffs. “Today’s auto market is being driven by wealthier households who have access to capital, good loan rates and are propping up the higher end of the market.”
While auto makers secured some relief from the president’s flurry of tariffs, car makers didn’t make it through the year unscathed. In a mid-year earnings call, Ford estimated its tariff costs to total up to $2 billion for the year.
The fuel economy changes are just the Trump administration’s latest effort to unravel signature climate-friendly policies from the Biden years. Trump’s Big Beautiful Bill, passed earlier this year, stripped away Biden era tax credits that lowered the price tag of eligible EVs by as much as $7,500. The death of those tax credits prompted a major short term boost in EV sales this summer, as buyers rushed to make their purchases in time to secure more affordable electric cars before the end of September.