US finalizes lower vehicle fuel economy standard of 34.9 mpg for 2031

The US Department of Transportation and the National Highway Traffic Safety Administration finalized revised Corporate Average Fuel Economy rules on Monday, reducing fleet efficiency mandates for automakers. Under the finalized regulation, manufacturers must reach a combined fleet average of 34.9 miles per gallon for passenger cars and light trucks in model year 2031. This replaces the previous standard set by the Biden administration, which required 50.4 miles per gallon by the same model year. According to government data, new vehicles achieved an average fuel economy of 30.1 miles per gallon in model year 2024.

The Transportation Department projected that the lower regulatory target will decrease technology compliance costs for automakers by $60.6 billion through 2031, which equals about $1,289 per vehicle. General Motors is estimated to save $20.4 billion in technology expenses through 2031, down from an estimated $31.7 billion compliance cost under the 2024 rules. Transportation Secretary Sean Duffy defended the policy shift during the announcement.

Thanks to President Trump's leadership, we have finally ended the illegal mandate that forced automakers to produce more expensive electric vehicles that American families didn't want.

Classification rules and credit eliminations

The regulatory package introduces structural changes to how vehicle fuel economy is measured and enforced. Starting in model year 2028, the rule eliminates the emissions credit trading system that previously allowed car companies to purchase credits from competitors to avoid financial penalties. In addition, electric vehicles and plug-in hybrids will no longer be factored into an automaker's fleet average calculation.

The regulation also modifies vehicle classification criteria starting in model year 2030 to close the light truck regulatory category. Small sport utility vehicles and crossovers built on passenger car chassis will be classified as passenger cars rather than light trucks. The Department of Transportation expects this change to shift the overall fleet mix from roughly 70% light trucks and 30% passenger cars to approximately 70% passenger cars and 30% light trucks.

Pricing debate and consumer response

The White House stated that reduced compliance costs will lower the average purchase price of a new vehicle by approximately $1,300, providing economic relief to consumers. National Highway Traffic Safety Administrator Jonathan Morrison stated that the rule grants manufacturers flexibility.

Sensible standards allow automakers greater freedom to design and produce the vehicles consumers really want.

Automotive analysts expressed skepticism about whether manufacturers will pass those cost reductions directly to buyers. Stephanie Brinley, principal automotive analyst at Mobility Global, stated that consumers are unlikely to see a direct $1,300 price drop on new vehicles that currently average around $50,000. Jessica Caldwell, head of insights at Edmunds, pointed out that import tariffs continue to increase manufacturing costs across the industry.

Health and environmental organizations opposed the rollback, warning that lower mileage requirements will increase fuel expenses and pollution damages. Previous estimates indicated that the Biden-era rules would have saved car owners more than $600 in gasoline over the lifetime of a vehicle and $23 billion in total fuel costs. Harold Wimmer, president and CEO of the American Lung Association, criticized the decision.

There is no reason to weaken standards that are technologically feasible and have a direct benefit for the quality of the air people breathe.

Retail gasoline prices in the United States currently average near $4.50 per gallon, up more than 40% from the previous year.