On December 4, 2025, President Trump announced on Wednesday that he would abolish the strict Corporate Average Fuel Economy (CAFE) standards set by former President Biden. The White House stated that this move would save billions of dollars for American families.
According to the report from “The Hill,” Trump declared in the Oval Office, “We are officially terminating Joe Biden’s, ridiculous, burdensome, and actually very frightening CAFE standards, which impose costly restrictions and lead to various problems.”
Executives from Ford, General Motors, and Stellantis, the three major automakers, gathered at the White House, standing alongside the president to witness this significant policy shift.
The CAFE standards, short for Corporate Average Fuel Economy, are regulations established by the Department of Transportation to manage the fuel efficiency of passenger cars and light-duty trucks in the United States. It sets the minimum miles per gallon that automakers’ fleets must achieve.
Introduced in 1975, the standard has been tightening over the years to improve vehicle efficiency. However, the higher the standard, the higher the costs of research and producing cars.
Under Biden’s standards, by the 2031 model year, all vehicles in the U.S. would be required to achieve 50.4 miles per gallon. Automakers would need to improve fleet efficiency by 8% for the 2024 and 2025 model years, 10% for 2026, and 2% per year from 2027 to 2031.
The Trump administration proposed reverting to the 2022 standard, requiring automakers to increase efficiency by only 0.5% annually until the 2026 model year, after which it would rise by 0.25% each year. This means that by 2031, the fleet’s average fuel efficiency is expected to be only 34.5 miles per gallon.
Transportation Secretary Sean Duffy stated in a written statement that this change would result in an average savings of $1,000 for families when purchasing new vehicles. The White House emphasized that the regulations from the Biden era would increase the average cost of new cars by nearly $1,000.
Ford’s CEO, Jim Farley, stated, “We applaud President Trump for aligning fuel economy standards with market realities. We can make real progress in carbon emissions and energy efficiency while still providing customers with a variety of choices and affordability.”
Stellantis CEO Antonio Filosa also noted that the company “appreciates the Trump administration taking action to readjust CAFE standards based on real-world market conditions.”
John Bozzella, President and CEO of the Alliance for Automotive Innovation, criticized the previous standards, saying, “Given the current electric vehicle market, the previous government’s finalized CAFE rules were overly challenging for automakers.”
However, environmentalists and Democrats opposed the White House decision.
According to “The Hill,” Dan Becker, Director of Safe Climate Transport at the Center for Biological Diversity, criticized the move, stating, “The single biggest step any country can take to reduce global warming pollution, gasoline consumption, and save money for consumers at the pump is to adopt CAFE and EPA standards, and yet Trump is weakening it today.”
California Governor Gavin Newsom also stated, “California will continue to defend standards for fuel economy that can protect family budgets, our children’s lungs, and our future.”
It’s worth noting that the “Big and Beautiful Act,” signed by Trump in July of this year, reduced civil penalties for violating CAFE standards to zero dollars, protecting the automotive industry from massive fines.