NHTSA to propose reducing fuel economy requirements for 2022-2031 vehiclesFord CEO supports aligning standards with market realitiesEnvironmental group criticizes rollback for increasing costs at the pump
WASHINGTON, Dec 3 (Reuters) – President Donald Trump on Wednesday proposed slashing fuel economy standards that former President Joe Biden had finalized last year, in a push to make it easier for automakers to sell gasoline-powered cars.
Trump said the move was about reversing Biden’s efforts to force more Americans to buy electric vehicles. “People want the gasoline car,” Trump said.
Sign up here.
The National Highway Traffic Safety Administration proposed significantly reducing the fuel economy requirements from model years 2022 to 2031, requiring 34.5 miles per gallon on average by 2031, down from 50.4 miles per gallon (21.4 km per liter).
NHTSA is proposing to revise down the 2022 fuel economy standards and then proposing to hike them between 0.25% and 0.5% annually through 2031. In 2022, under Biden, NHTSA increased fuel efficiency by 8% annually for model years 2024-2025 and 10% for 2026.
Biden’s rules sought to prod automakers to build a rising number of EVs to comply, but would not have forced an immediate end to gas-powered vehicles.
NHTSA estimates the proposed rule would reduce average up-front vehicle costs by approximately $900, but would increase fuel consumption by around 100 billion gallons through 2050 — and cost Americans up to another $185 billion in fuel costs and increase carbon dioxide emissions by about 5%.
Reducing the rule for past years will make it much easier for automakers to comply for a period still being reviewed by NHTSA. Automakers would save $35 billion through 2031, including $8.7 billion for GM (GM.N), opens new tab and more than $5 billion for Ford (F.N), opens new tab and Stellantis (STLAM.MI), opens new tab.END TO CREDIT TRADING PROPOSED
The proposal will also make drastic changes to the program, including proposing to eliminate credit trading among automakers in 2028, and will end some credits for fuel-saving features. NHTSA said the credit trading was a “windfall for EV-exclusive manufacturers that sell credits to other non-EV manufacturers.”
California Governor Gavin Newsom said Trump is “proposing to gut fuel economy standards that will force Americans to spend billions more at the pump while poisoning the air in our communities.”
NHTSA said the increase in vehicle emissions from its proposal in 2035 would be the equivalent of annual emissions from 7.7 million vehicles over the Biden proposal.
Earlier this year, Trump signed legislation that ended fuel economy penalties for automakers, and NHTSA said they faced no fines dating back to the 2022 model year.Ending credit trading could hurt automakers like EV manufacturers Tesla (TSLA.O), opens new tab and Rivian (RIVN.O), opens new tab, which have sold credits to rivals making gas-powered models.Trump was joined at the White House by the CEOs of Stellantis (STLAM.MI), opens new tab and Ford to tout the proposal.
Ford CEO Jim Farley said the company would invest more in affordable vehicles. “Today is a victory for common sense and affordability… We believe that people should be able to make a choice.”
GM CEO Mary Barra noted on Tuesday at an event that before Congress blocked California’s zero-emission vehicle rules in June, the auto sector was facing requirements in some states that 35% of new vehicles sold in 2026 must be EVs.
“We were going to have to start shutting down plants because we weren’t going to be able to build and sell those vehicles,” Barra said.
RULE WOULD HAVE CUT EMISSIONS
The agency last year said the passenger car and truck rule would reduce gasoline consumption by 64 billion gallons and cut emissions by 659 million metric tons, reducing fuel costs with net benefits estimated at $35.2 billion for drivers.
The 2022 rule was estimated to reduce fuel use by more than 200 billion gallons through 2050.
Kathy Harris, director of clean vehicles at environmental nonprofit the Natural Resources Defense Council, said, “The Trump administration is sticking drivers with higher costs at the pump, all to benefit the oil industry … Drivers will be paying hundreds of dollars more at the pump every year if these rules are put in place.”
Trump has taken a series of steps to make it easier to sell gas-powered vehicles and disincentivize EV production, including rescinding EV tax credits and barring California from banning the sale of traditional gas-powered vehicles after 2035.
Reporting by David Shepardson in Washington; Additional reporting by Kalea Hall in Detroit; Editing by Franklin Paul, Matthew Lewis, Rod Nickel
Our Standards: The Thomson Reuters Trust Principles., opens new tab