Trump Official Declares Biden Fuel Economy Rules Illegal

Upon taking office in January, the Trump administration issued an executive order that pledged to eliminate the so-called “electric vehicle mandate” for America. The Department of Transportation escalated that effort last Friday by issuing a new ruling called “Resetting the Corporate Average Fuel Economy Program.” The ruling does not revise the Biden administration CAFE standards. Instead, it questions the legitimacy of those standards by declaring them “illegal.”

U.S. Transportation Secretary Sean Duffy noted in a statement that “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.”

What Are The Biden Era CAFE Standards?

Under the Biden administration, the Department of Transportation issued new guidance in June 2024. It called for fuel economy improvements of two percent per year for passenger vehicles for model years 2027 to 2031 and two percent per year for light trucks from 2029 to 2031. The administration estimated those changes would bring average light-duty fuel economy to 50.4 miles per gallon by 2031.

The new rules also included guidelines for heavy-duty trucks and vans. Manufacturers would be required to increase fuel economy by 10 percent per year for model years 2030 to 2032 and eight percent per year from 2033 to 2035. According to estimates, this change would lead to an average heavy-duty fuel economy of 35 mpg by 2035.

Biden CAFE Requirements

Interpretations of “Maximum Feasible Level” Differ

Congress created CAFE standards with the Energy Policy and Conservation Act of 1975. That law noted that standards should be set at a “maximum feasible level,” with the feasibility depending on the economic situation and technological limitations.

Basically, the Biden administration included battery-electric and hybrid vehicles in its calculations for what was feasible. Manufacturers need to sell electric vehicles or face billions in prohibitive fines. That’s what critics term the “EV mandate.”

There were no meaningful hybrid and electric vehicles on the market in 1975. So the Trump administration is arguing that the law does not provide a basis to factor them in, stating that there is a “legal prohibition on considering dedicated alternative and dual-fueled vehicles and credit trading when setting CAFE standards.”

How Automakers Will React To New CAFE Standards

The rule does not change the existing CAFE standards for now. It directs the NHTSA to establish new regulations under the guidelines, which now stipulate that the organization can’t factor in hybrid or electric vehicles. With ultra-low and zero-emission vehicles excluded, it’s safe to assume these new rules will be dramatically less stringent compared to current levels.

This ruling isn’t the only recent activity from Washington regarding vehicle emission regulations. The US Senate voted to overturn California’s “EV mandate,” and a new Republican tax bill would eliminate the federal tax credit for EVs while imposing taxes on EV and hybrid owners. Republican leaders in the Senate have also proposed eliminating CAFE fines entirely. While it’s unlikely manufacturers will abandon long-term EV plans, political winds could alter short-term activity.

Base Trim Engine

3.6L V6 Gas

Base Trim Transmission

8-Speed Automatic

Base Trim Drivetrain

Rear-Wheel Drive

Infotainment & Features

9 /10

We may already be seeing some of that in action, notably at Stellants which shelled out millions in CAFE fines and faced escalating exposure under rules established by the Biden administration. Dodge and Ram largely stepped away from the Hemi V8 in favor of small inline-six engines and electrification in hopes of meeting those standards. As early as January 2025, Ram CEO Tim Kuniskis hinted that the 5.7-liter Hemi V8 could return to the Ram 1500 lineup and that has now happened. Perhaps not coincidentally, plans for Ram’s electrified trucks have been delayed.

Sources: NHTSA, Reuters