In a move intended to reduce new car prices and support domestic manufacturers, U.S. Transportation Secretary Sean Duffy announced a new rule giving the National Highway Traffic Safety Administration (NHTSA) the authority to revise fuel economy and efficiency standards, on the basis that previous regulations improperly considered various laws in earlier rulemakings.
NHTSA issued the “Resetting the Corporate Average Fuel Economy Program” rule, outlining the agency’s legal framework to formally adjust or delay enforcement of current fuel standards for the Corporate Average Fuel Economy (CAFE) and commercial medium- and heavy-duty (MDHD) vehicles (sometimes referred to as “Phase 1,” “Phase 2,” and “Phase 3” Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles). NHTSA claims that, because CAFÉ and MDHD standards lacked certain statute authorizations, both are ripe for a new rulemaking. This new interpretive rule does not itself change existing CAFE or MDHD standards but instead identifies the administration’s approach to future revisions. In the meantime, NHTSA will approach enforcement in accordance with the interpretative rule.
In 2024, NHTSA finalized new CAFE standards that aimed to increase passenger car and light truck fuel economy by 2% per year, using a mix of fuels and technologies to achieve these average emission improvements. The new interpretive rule, based on an analysis of the Energy Policy and Conservation Act of 1975, the Energy Independence and Security Act of 2007, and other applicable law, concludes that it is “it is impermissible for NHTSA to consider the fuel economy of dedicated automobiles in setting maximum feasible fuel economy standards.” Given that electric vehicles (EVs) are dedicated automobiles, the rule outlines future regulatory arguments that the prior administration’s rules improperly used CAFE requirements to advance EV adoption. The new interpretive rule also finds that previous MDHD efficiency standards did not have the explicit authority to impose civil penalties for violations nor establish any credit-trading programs as part of its compliance and enforcement protocols.
“Under President Trump’s leadership, we are making vehicles more affordable and easier to manufacture in the United States,” said Secretary Duffy in a recent statement. “The previous administration illegally used CAFE standards as an electric vehicle mandate — raising new car prices and reducing safety. Resetting CAFE standards as Congress intended will lower vehicle costs and ensure the American people can purchase the cars they want.”
Supporters welcomed the action, including the Alliance for Automotive Innovation.
“This is a positive development and important clarity from the Department of Transportation,” read a statement on the group’s website. “In multiple comments to NHTSA during the Biden administration, automakers said NHTSA’s standards were ‘improperly predicated’ on alternative fuel vehicles.”
Others, like the Sierra Club, argue the change may lead to increased greenhouse emissions and higher fuel bills.
“Making our vehicles less fuel efficient hurts families by forcing them to pay more at the pump,” said Sierra Club Clean Transportation for All Director Katherine García. “This action puts the well-being of our communities at risk in every way imaginable. It will lead to fewer clean vehicle options for consumers, squeeze our wallets, endanger our health, and increase climate pollution.”
The interpretive rule does not immediately alter existing fuel economy goals but outlines NHTSA’s legal basis to adjust them. Under Biden-era standards, light-duty vehicles were on track to average roughly 50 mpg by 2031 — up from approximately 39 mpg. Under NHSTA’s Phase 2 MDHD fuel economy rules approved in 2016 were anticipated to achieve fuel savings as high as 25%.
