President Donald Trump is giving Detroit and the U.S. auto industry center stage on Wednesday as he announces relaxed fuel economy standards for the more than 15 million new cars and trucks sold in the United States every year.
The president will be joined in the Oval Office by Ford Motor Co. CEO Jim Farley, Stellantis NV CEO Antonio Filosa and a General Motors Co. plant manager for the company's Orion Assembly site. Michigan U.S. Rep. Lisa McClain, R-Bruce Township, will also attend the planned 2:30 p.m. event.
Details of the corporate average fuel economy regulations have not yet been disclosed, but the White House said new standards would amount to "a historic reset of the CAFE standards that were created by the Biden Administration," which would have "compelled widespread shifts to electric vehicles that American consumers did not ask for, accompanied by significant cost-of-living increases."
Consumers have shown signs of growing unhappiness and concern over U.S. economic conditions, and the Trump administration is casting the lenient standards as a move to improve vehicle affordability at a time of stubbornly high prices, especially in the automotive sector. The average price of a new vehicle pushed past $50,000 for the first time in September, according to Cox Automotive Inc.
Despite that affordability aim, however, it is unclear how strong an impact the new rules will have on the nation's largest retail sector after the Trump administration already worked to roll back other vehicle emission regulations throughout the year.
The auto industry is also facing cost pressures from the president's tariff policies, which will likely raise prices in the short term even if they succeed at reshoring American manufacturing in the long term.
Automakers nevertheless cheered the Wednesday announcement as one that brings forward-looking regulations in line with the "market realities" of a slower-than-hoped-for transition to EVs, continued cost and supply chain issues with electrified powertrains, and Americans' longstanding love for large, gas-powered trucks.
"As America’s largest auto producer, we appreciate President Trump’s leadership in aligning fuel economy standards with market realities.
We can make real progress on carbon emissions and energy efficiency while still giving customers choice and affordability. This is a win for customers and common sense,” Ford's Farley said in a statement.
"Stellantis appreciates the Trump Administration’s actions to re-align the Corporate Average Fuel Economy (CAFE) standards with real world market conditions as part of its wider vision for a growing US automotive industry," Filosa said.
He added: "We look forward to working further with NHTSA (the National Highway Traffic Safety Administration) on environmentally responsible policies that also allow us to offer our customers the freedom to choose the vehicles they want at prices they can afford."
GM said it "supports the goals of NHTSA’s proposed CAFE rule and its intention to better align fuel economy standards with market realities. We have long advocated for one national standard that upholds customer choice and provides the auto industry long-term stability. As we review the proposal, we remain committed to offering the best and broadest portfolio of electric and gas-powered vehicles on the market.”
General Motors Co. faced the prospect of needing to cut production of gasoline-fueled vehicles if electric-vehicle sales failed to grow as needed under ambitious fuel economy requirements enacted by President Joe Biden, company Chief Executive Officer lying Mary Barra said.
Fuel efficiency standards now being rolled back under President Donald Trump would have required a fleet average of about 50 miles per gallon by 2031. That effectively meant that most carmakers would have to get more than half of their sales from EVs by that time.
If those EV sales didn’t materialize and the rules weren’t reduced by Biden in response, GM would have had to limit sales of gasoline-powered vehicles and possibly shut down some of its production, Barra said at the New York Times Dealbook conference in New York on Wednesday.
“We were going to have to start shutting down plants,” Barra said.
The White House on Wednesday is proposing weaker fuel economy standards to replace those enacted under Biden in the Trump administration’s latest move to dismantle what the president has called Biden’s “EV mandate.”
Automakers including GM have already cut output of EVs due to softening demand. GM also plans to convert the Orion Assembly plant earmarked for plug-in vehicles to make large SUVs and pickup trucks.
DELIVERING A WIN FOR AMERICAN FAMILIES AND AUTOMAKERS:
Today, President Donald J. Trump is delivering major relief to American families by resetting the Biden Administration’s costly and unlawful Corporate Average Fuel Economy (CAFE) standards.
• President Trump is returning CAFE standards to levels that can actually be met with conventional gasoline and diesel vehicles. The Biden Administration standards imposed unrealistic fuel economy targets that effectively resulted in an electric vehicle (EV) mandate.
• The Trump Administration’s reset of the CAFE standards ensures the program’s fidelity to the legal restrictions set forth by Congress.
• The Biden standards broke the law by going far beyond the requirements that were mandated by Congress when it created the CAFE program.
SAVING AMERICAN FAMILIES MONEY:
Today’s action represents an enormous win in response to the cost-of-living increases imposed on the economy by the Biden Administration.
• The Biden Administration created extraordinarily stringent fuel economy standards for passenger cars and trucks, set at such aggressive levels that they were impossible to meet with available technologies for gas cars.
• The Biden standards would have compelled widespread shifts to EVs that American consumers did not ask for, accompanied by significant cost-of-living increases. Since EVs are so expensive to build, automakers must sell them at a loss and make up the difference by significantly raising the sticker price of gas cars.
• If President Trump had done nothing, the Biden standards would have raised the average cost of a new car by nearly $1,000, relative to the cost under the standards announced today.
• President Trump’s actions will save American families $109 billion in total over the next five years.
• By helping more Americans buy newer, safer vehicles, this reset is projected to save more than 1,500 lives and prevent nearly a quarter-million serious injuries through 2050.
MARKING A CRITICAL BATTLE IN THE FIGHT AGAINST BIDEN’S HIDDEN COST-OF-LIVING INCREASES:
The CAFE reset represents the latest action by President Trump to prevent the Biden EV-related policies from raising costs for Americans.
• In June, President Trump signed a joint resolution to end the California EV mandates, which would have effectively been a 100% ban on new gas cars sold in the state by 2035 (with similar effects in 17 states that adopted California’s standards).
• In July, President Trump signed into law the Working Families Tax Cuts Act, which set the civil penalty for violating CAFE standards to $0, protecting the U.S. auto manufacturing industry from significant fines.
• Under President Trump, the Environmental Protection Agency (EPA) has also released its proposal to rescind the 2009 Endangerment Finding, which ignores Congress’ clear intent under the Clean Air Act and has been used to justify over $1 trillion in costs for the American consumers and economy.
• Today’s action helps ensure that even if far-left Democrats return to power, the CAFE standards are sensible, so U.S. automakers are not held to infeasible standards.
• Combined with auto loan interest deductibility for new made-in-the-USA vehicles,
President Trump continues to deliver real relief that makes owning a safe, reliable car more affordable for every American family.
The plan will relax fuel economy standards by setting the industry average for car & light-duty vehicles at roughly 34.5 miles per gallon through the 2031 model year, lower than the 50 miles per gallon outlined by a Biden-era rule.
