President Donald Trump on Wednesday suggested significant reductions to stringent fuel economy benchmarks for passenger vehicles instituted during the Biden administration.
“We are officially scrapping Joe Biden’s absurdly onerous, actually terrible, CAFE standards that enforced costly limitations,” Trump declared at the Oval Office, surrounded by the CEOs of Ford Motor and Stellantis.
The Corporate Average Fuel Economy, or CAFE, criteria have been in place since 1975 and have been tightened over the years to enhance vehicle efficiency.
Former President Joe Biden mandated that automakers boost the fuel efficiency of passenger cars and light trucks to approximately 50 miles per gallon by 2031. These more stringent regulations were anticipated to encourage the manufacturing and sale of electric vehicles in the U.S.
The requirements put forth by the Trump administration would mandate vehicles to achieve roughly 34 miles per gallon by 2031, according to the National Highway Traffic Safety Administration.
Since taking office, Trump has aimed to eliminate pollution regulations and federal incentives for electric vehicles as well as renewable energy pursuits.
The American Petroleum Institute, representing the oil industry, has pressed the Trump administration to revoke the Biden fuel economy standards, arguing that they seek to eliminate liquid fuel vehicles.
The gathering included Ford CEO Jim Farley and Stellantis CEO Antonio Filosa, along with a plant manager for General Motors from Michigan.
Many of the officials present, including U.S. dealers, indicated that the new standards align better with the types of vehicles consumers prefer to purchase rather than the pricier models automakers have been compelled to create due to regulations.
Trump and other officials additionally promoted the new regulations as aiding vehicle affordability, which has been a persistent issue for the automotive sector, as the average price of a new vehicle approaches $50,000.
The Alliance for Automotive Innovation, a trade association representing most automakers operating in the U.S., also commended the reductions.
“We’re examining NHTSA’s announcement, but we’re pleased the agency has suggested new fuel economy standards,” John Bozzella, CEO of the organization, stated in a release. “We have consistently expressed: The existing CAFE regulations finalized under the prior administration are exceptionally difficult for automakers to meet given the present market for EVs.”
U.S. EV frontrunner Tesla did not provide a response regarding the lowered standards.
— CNBC’s Phil LeBeau and Lora Kolodny contributed to this report.
