"Saving" gasoline vehicles? Trump announces plans to significantly relax fuel consumption standards

Trump plans to significantly relax automotive fuel efficiency standards, which may reshape the U.S. auto market landscape.

On Wednesday, U.S. President Trump announced in the White House office that he would officially end the Biden administration's "ridiculous, burdensome, and actually terrible" Corporate Average Fuel Economy (CAFE) standards, arguing that these standards impose costly restrictions.

According to data from the National Highway Traffic Safety Administration (NHTSA), the standards proposed by the Trump administration require that by 2031, the fuel efficiency of passenger cars be approximately 34 miles per gallon. In contrast, the target set by the Biden administration for the same period was about 50 miles per gallon, aimed at stimulating the production and sales of electric vehicles in the U.S.

When Trump announced the proposal, Ford CEO Jim Farley and Stellantis CEO Antonio Filosa were both present at the meeting. Traditional automakers and the oil industry generally welcomed this change, believing it aligns better with current market demands and vehicle affordability.

However, analysts believe that this shift also marks a significant setback for the U.S. government's efforts to promote clean energy and electric vehicle strategies, and its long-term impact is being closely monitored by the market.

Significant Reduction in Fuel Efficiency Targets

The core of this policy adjustment lies in the substantial reduction of future Corporate Average Fuel Economy (CAFE) standards.

This standard has been in place since 1975 and has been tightened over the years to encourage automakers to produce more fuel-efficient vehicles.

Under the requirements of the previous Biden administration, automakers were required to increase the average fuel efficiency of passenger cars and light trucks to about 50 miles per gallon by 2031.

The new regulations proposed by the Trump administration significantly lower this target to 34 miles per gallon. This action is the latest step in Trump's series of efforts to repeal pollution regulations since taking office.

The Automotive Innovation Alliance, which represents most U.S. automakers, expressed appreciation for this move. The organization's CEO, John Bozzella, stated that they are reviewing the NHTSA's announcement and are pleased that the agency has proposed new fuel economy standards. He pointed out:

We have consistently and clearly stated that given the current market conditions for electric vehicles, the existing CAFE rules finalized by the previous administration are extremely challenging for automakers.

Reports indicate that the American Petroleum Institute, a lobbying group for the oil industry, also lobbied the Trump administration to repeal the fuel economy standards from the Biden era, claiming they aimed to phase out fuel-powered vehicles.

Catering to Market Demand and Reducing Vehicle Costs

Additionally, supporters of the plan argue that relaxing fuel efficiency standards is based on realistic business considerations and helps address the ongoing industry concern regarding vehicle affordability.

Reportedly, many officials attending the meeting, including U.S. dealers, stated that the new standards better align with the types of vehicles consumers actually want to purchase, rather than the more expensive vehicles that automakers are forced to produce under regulatory pressure. Vehicle affordability has become a major concern in the automotive industry, with the average purchase price of new cars in the United States hovering around $50,000. Trump and other officials have also claimed that the new regulations will help improve vehicle affordability.

According to reports, while traditional automakers welcomed the policy shift, Tesla, as the leader in the U.S. electric vehicle market, did not respond to requests for comments regarding the reduction of fuel efficiency standards.

Analysts believe that the Trump administration's actions will undoubtedly create a new market environment for companies focused on electric vehicle development, represented by Tesla.

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