Trump says his new rule will make cars $1,300 cheaper, but there’s a catch for drivers

The US Department of Transportation finalized its plans to significantly lower vehicle fuel economy standards, marking a major shift in how the government regulates the auto industry. This move is being described as among the largest deregulatory actions under the second Trump Administration.

As reported by The Verge, it effectively replaces the previous requirements that were aimed at pushing the fleet average fuel economy to 50.4 miles per gallon by model year 2031. Under the new policy set by President Donald Trump, the target is now 34.9 miles per gallon, which is only a slight increase from the 30.1-mile-per-gallon target that was previously set for model year 2024.

You might be wondering how this affects your wallet. The Trump administration claims that this change will shave $1,289 off the average cost of a new vehicle, potentially saving consumers $138 billion over the next five years. 

Major automakers appear to be on board with the change

However, these figures have been disputed. While you might see a lower sticker price at the dealership, the Department of Transportation estimates that the rule will increase individual fuel costs by more than $1,600 over the lifetime of a vehicle. This comes at a time when drivers have been grappling with sharply higher fuel prices since the start of the U.S.-Israeli war with Iran at the end of February.

Automakers seem to be on board with the change, as Reuters reports. The Alliance for Automotive Innovation, which represents major companies like General Motors, Toyota, Volkswagen, Hyundai, and Ford, expressed support for the decision. The group stated that the government “made the right call to better align fuel economy standards with the law and current market conditions.”

They further claimed that the previous rules “effectively required a switchover to electric vehicles that was out of step with market realities and customer demand.” As part of these changes, the new rules will also end credit trading among automakers in 2028. This is a big deal because that system was previously a significant source of income for electric vehicle manufacturers like Tesla and Rivian.

On the other side of the debate, environmental and health groups are strongly opposing the rollback. The Sierra Club stated it will fight the new standards, noting, “Americans need relief from high costs, but instead Trump is giving automakers a free pass on pollution and handing families the bill — at the pump and with their health.” 

Concerns are centered on the fact that while the cost of buying a car might go down, fuel consumption and carbon dioxide emissions are expected to increase for decades. The department’s own estimates suggest that the new regulations will increase U.S. gasoline consumption by 4.6% through 2050 compared to the previous standards.

The American Lung Association also weighed in on the health implications. “For decades, fuel economy standards have ensured that new cars, SUVs and pickup trucks are more efficient, which saves lives and money,” the American Lung Association’s president and CEO, Harold Wimmer, said in an emailed statement. “There is no reason to weaken standards that are technologically feasible and have a direct benefit for the quality of the air people breathe.”