President Donald Trump on Wednesday unveiled a major proposal to roll back fuel economy standards established under the Biden administration, signaling a significant shift in U.S. automotive policy. The move is aimed at making it easier for automakers to continue producing gasoline-powered vehicles while slowing the push toward electric vehicles (EVs).

“People want the gasoline car,” Trump said during the announcement, emphasizing consumer choice as a central goal of the proposed rule.

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Key Changes in Fuel Economy Standards

The National Highway Traffic Safety Administration (NHTSA) outlined the proposal to reduce fuel economy requirements for vehicles from model years 2022 through 2031. Under the new plan, automakers would only need to achieve an average of 34.5 miles per gallon (mpg) by 2031, down from the 50.4 mpg target set under Biden’s rules.

The proposal also includes:

• Revising downward the 2022 standards.
• Gradually increasing fuel economy between 0.25% and 0.5% annually through 2031.
• Eliminating credit trading among automakers by 2028, which had allowed EV makers to sell credits to rivals producing gas-powered vehicles.
• Ending certain credits for fuel-saving technologies, reducing regulatory incentives for electric vehicles.

NHTSA argues these changes reflect market realities, potentially saving automakers billions while lowering upfront vehicle costs for consumers by an average of $930 per car.

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Economic Implications for Automakers and Consumers

The proposal is expected to have significant financial implications:

• Automakers could save roughly $35 billion through 2031, with GM projected to save $8.7 billion and Ford over $5 billion.
• Consumers may face higher fuel costs, as NHTSA estimates an increase in fuel consumption of 100 billion gallons through 2050, costing Americans up to $185 billion.

Ford CEO Jim Farley praised the proposal as a victory for affordability and consumer choice, stating, “People should be able to make a choice.” General Motors CEO Mary Barra also noted that prior EV mandates in some states would have required 35% of new vehicle sales to be electric by 2026, potentially forcing plant closures.

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Environmental Concerns and Criticism

Environmental groups have criticized the rollback, warning that it will increase greenhouse gas emissions and raise costs for drivers. Kathy Harris, director of clean vehicles at the Natural Resources Defense Council, said, “Drivers will be paying hundreds of dollars more at the pump every year if these rules are put in place.”

Transportation is the largest contributor to U.S. greenhouse gas emissions, and NHTSA estimates the proposed rule would increase vehicle emissions equivalent to the annual emissions from 7.7 million vehicles compared to Biden-era standards.

California Governor Gavin Newsom condemned the proposal, stating it would force Americans to spend more on fuel while worsening air quality.

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Impact on the Electric Vehicle Market

The rollback also affects the EV market, particularly companies that benefit from credit trading. Tesla and Rivian, for example, have historically sold credits to competitors manufacturing gas-powered cars. Ending these credits could reduce revenue streams for EV manufacturers.

The Trump administration has taken multiple steps to support gasoline vehicles and limit the growth of electric vehicles, including:

• Rescinding EV tax credits.
• Blocking California from banning the sale of gasoline cars after 2035.

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Market and Consumer Takeaways

While critics warn of environmental and financial downsides, proponents argue the policy reflects consumer demand for gasoline vehicles and provides relief from regulatory costs. This regulatory shift could influence:

• Future vehicle design trends.
• The balance between gas-powered and electric vehicles in the U.S. market.
• Consumer affordability and choice for new cars.

As the debate continues, the proposed rollback highlights the ongoing tension between environmental policy, automotive innovation, and market preferences.