The Trump Administration on Monday finalized a drastic rollback of Biden-era fuel-economy standards, lowering the federal mandate to an average of 34.5 miles a gallon by model year 2031 from the previous 50.4 miles a gallon target. National Highway Traffic Safety Administrator Jonathan Morrison stated the "sensible standards" give automakers freedom to build vehicles consumers want amid high gas prices and average new-car costs topping $50,000. The administration claims the move will lower vehicle prices by easing engineering costs, a view supported by major automakers General Motors, Ford Motor, and Toyota Motor, as well as the Alliance for Automotive Innovation, which called it an "appropriate course correction."

Critics, including environmental groups and state attorneys general, argue savings are overblown and will be offset by higher fuel costs. Since the 1970s, Corporate Average Fuel Economy (CAFE) standards have driven cleaner cars like the Toyota Prius and the EV transition. The new rule reclassifies small SUVs and crossovers as passenger cars and eliminates the credit-trading system that benefited Tesla. Congress and the administration previously eliminated fines for violations, and this change enshrines lenient targets into law, making a return to stricter standards more difficult.