Traffic on Interstate 80 in San Pablo, California, United States, Wednesday, November 26, 2025.
David Paul Morris | Bloomberg | Getty Images
President Donald Trump on Wednesday proposed significant reductions to the strict fuel economy standards for passenger cars enacted under the Biden administration.
“We are officially ending Joe Biden’s ridiculously burdensome, even horrific, CAFE standards that imposed costly restrictions,” Trump said from the Oval Office, flanked by CEOs of Ford engine And Stellantis.
Corporate Average Fuel Economy, or CAFE, standards date back to 1975 and have been strengthened over the years to make vehicles more efficient.
Former President Joe Biden had asked automakers to increase the fuel economy of passenger cars and light trucks to about 50 miles per gallon by 2031. The tougher standards were expected to boost the production and sale of electric vehicles in the United States.
The Trump administration’s proposed standards would require cars to get about 34 miles per gallon by 2031, according to the National Highway Traffic Safety Administration.
Since taking office, Trump has sought to dismantle pollution regulations and federal support for electric vehicles as well as renewable energy.
The oil industry group, the American Petroleum Institute, has been pressuring the Trump administration to repeal Biden’s fuel economy standards, saying they aim to phase out liquid fuel vehicles.
The announcement was attended by Ford CEO Jim Farley, Stellantis CEO Antonio Filosa, and the plant manager of General engines from Michigan.
Ford CEO Jim Farley and Stellantis CEO Antonio Filosa listen to U.S. President Donald Trump’s announcement of new fuel economy standards, in the Oval Office of the White House in Washington, DC, United States, December 3, 2025.
Brian Snyder | Reuters
Many officials present, including U.S. dealers, said the new standards are more in line with the vehicles customers want to buy rather than the more expensive ones automakers have been pushed to produce by regulations.
Trump and other officials have also touted the new regulations as helping make vehicles affordable, which is an ongoing concern for the auto industry since the average new vehicle purchased hovers around $50,000.
The Alliance for Automotive Innovation, a trade group that represents the majority of automakers operating in the United States, also welcomed the reductions.
“We are reviewing NHTSA’s announcement, but we are pleased that the agency has proposed new fuel economy standards,” John Bozzella, the organization’s CEO, said in a statement. “We have been clear and consistent: the current CAFE rules, finalized under the previous administration, are extremely difficult for automakers to implement, given the current electric vehicle market.”
US electric vehicle leader Tesla did not respond to comments about the reduced standards.
—CNBC Phil LeBeau And Lora Kolodny contributed to this report.