The Department of Transportation said Monday its rewrite of fuel economy standards would make cars $1,300 cheaper and save Americans $138 billion. The 892-page rule NHTSA released the same day, signed Sept. 25 by Administrator Jonathan Morrison, tells a narrower story: the $1,300 is an estimate for 2031 models that depends on automakers passing savings on, and the lower costs behind the $138 billion are set against a $95.8 billion reduction in benefits.
What the rule changes
The rule resets corporate average fuel economy (CAFE) standards — the fleet-wide average mileage each automaker must meet, not any single car’s rating — for passenger cars and light trucks for model years 2022 through 2031. NHTSA estimates the required fleet average reaches about 34.9 mpg by model year 2031, versus about 49.3 mpg under the 2024 standards it replaces. Part of that drop reflects a separate change: starting in model year 2030, lighter crossover SUVs move from “light truck” to “passenger car,” which lowers the required average for both groups. DOT also says the rule will “Prevent more than 300,000 serious injuries and save 1,900 lives by encouraging new car sales.”
The numbers behind the claims
- $1,300 cheaper cars. The rule’s figure is $1,289 per new vehicle for model year 2031 — and only “if those savings are passed on to consumers.” It comes from a projected $15.3 billion drop in fleet-wide technology costs for that year.
- $138 billion in savings. DOT calls this a savings “over the next five years.” The rule instead gives $137.5 billion as the estimated reduction in costs, discounted at 3%, for vehicles built through 2031 over their lifetimes — paired with an estimated $95.8 billion reduction in benefits, which in NHTSA’s accounting include drivers’ fuel savings, over the same period. Net, the rule’s own present-value figure is about $41.8 billion, not $137.5 billion.
- Gasoline use. The rule projects a 4.6% increase in gasoline consumption through 2050 versus keeping the old standards, while noting total fleet fuel use still declines over time. DOT’s release instead compares yearly oil use in 2050 with 2024, citing a reduction of about 1.3 billion barrels — a different measure and a different baseline. NHTSA says all its results carry “some degree of uncertainty.”
- Below what’s already achieved. In comments summarized in the rule, ACEEE and Our Children’s Trust told NHTSA the proposed 34.5 mpg standard was below the 35.4 mpg the fleet actually achieved in model year 2024. NRDC makes the same point about the finalized 34.9 mpg.
What it means for a car buyer
The rule estimates lower regulatory technology costs, conditional on automakers passing them through — it does not promise a lower sticker price. James Michael Sallee, an economist at UC Berkeley, told TIME: “Fuel economy standards will tend to put upward prices—but a lot of that is offset, if not all of it, by future fuel cost savings that consumers enjoy over the course of the life of a vehicle.” Mark Jacobsen, a UC San Diego economist, told TIME: “If you look at the analysis the Administration has done, they’re projecting very low gasoline prices in the future.” He added: “That needs to be true in order to save the consumer money.”
Reactions
John Bozzella, president and CEO of the automakers’ Alliance for Automotive Innovation, said: “We’re still reviewing the final rule, but NHTSA made the right call to better align fuel economy standards with the law and current market conditions,” calling it “an appropriate course correction.”
NRDC attorney Atid Kimelman criticized it: “With Americans struggling to afford gasoline that is more than $4 a gallon, the Trump administration is going to force them to pay more at the pump.” NRDC also said NHTSA’s original proposal had projected the changes would cost the average driver $1,400 more in fuel over a vehicle’s lifetime — NRDC’s description of the December proposal, not of the final rule. AAA’s national gas-price average stood at $4.48 a gallon as of Sept. 24, which AAA called “the highest the national average has ever been for this time of year.”
Transportation Secretary Sean Duffy said in DOT’s release: “Thanks to President Trump’s leadership, we have finally ended the illegal mandate that forced automakers to produce more expensive electric vehicles that American families didn’t want.”
What happens next
The rule has been submitted to the Federal Register but not yet published there; it takes effect 60 days after publication. NRDC’s statement ended: “This rollback is not only bad policy; it also violates the law. Stay tuned.”