U.S President cuts fuel economy standards back to 2014 levels | In 2020, U.S President cut CAFE to 40 mpg. Now he’s cut it again to just 35 mpg.

Gasoline cars will now require fewer technological advancements to meet fleet averages, potentially slowing the adoption of more efficient powertrains.

The U.S. Department of Transportation has finalized new Corporate Average Fuel Economy (CAFE) standards, rolling them back to levels not seen since 2014. The new rule sets a target of 34.9 mpg by model year 2031, significantly lower than the standards previously set by the Biden administration. A key change is the elimination of emissions credits for automakers starting in model year 2028, and electric and plug-in hybrid vehicles will no longer count towards fleet average fuel economy. Additionally, the rule aims to reclassify vehicle types, potentially shifting the market mix from light trucks back towards passenger cars by model year 2030. This action follows previous reductions by the Trump administration and a period where enforcement of existing rules was lax.

This rollback signals a significant shift away from incentivizing electric and plug-in hybrid vehicle adoption, with automakers potentially reconsidering investments in these technologies. The removal of emissions credits and exclusion of EVs from fleet averages directly undermine previous efforts to encourage cleaner vehicle sales. Consequently, consumers may see fewer EV and PHEV options or face higher prices as manufacturers prioritize compliance with lower fuel economy targets for gasoline vehicles.

The reclassification of vehicle types, aiming to curb the dominance of light trucks, could reshape automotive design and marketing strategies. If successful, it may lead to a resurgence of smaller, more fuel-efficient passenger cars. However, the overall impact on the global auto market remains to be seen, with potential risks of American industry falling behind in the race for advanced, sustainable transportation technologies.