"Save" gasoline vehicles? Trump announces plan to significantly relax fuel economy standards

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Trump plans to significantly relax automobile fuel efficiency standards, potentially reshaping the landscape of the U.S. auto market.

On Wednesday, U.S. President Trump announced in the Oval Office that he would officially end the Biden administration's “ridiculous, burdensome, and actually terrible” Corporate Average Fuel Economy (CAFE) standards, considering these regulations to impose costly restrictions.

According to data from the National Highway Traffic Safety Administration (NHTSA), the standards proposed by the Trump administration require passenger cars to achieve about 34 miles per gallon of fuel efficiency by 2031. Previously, the Biden administration set a goal of about 50 miles per gallon during the same period, aimed at stimulating the production and sale 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 the change, believing the move better aligns with current market demand and vehicle affordability.

However, analysts believe this shift also marks a significant setback in the U.S. government's strategy to promote clean energy and electric vehicles, and its long-term impact is being closely watched by the market.

Fuel Efficiency Targets Significantly Lowered

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

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

Under former President Biden’s requirements, automakers were mandated to increase average fuel efficiency of passenger cars and light trucks to about 50 miles per gallon by 2031.

However, the new rule proposed by the Trump administration dramatically lowers the target to 34 miles per gallon. This move is the latest in a series of steps Trump has taken since taking office to repeal pollution regulations.

The Alliance for Automotive Innovation, representing most U.S. automakers, expressed appreciation for the changes. CEO John Bozzella said the organization is reviewing NHTSA's announcement and is pleased the agency is proposing new fuel economy standards. He noted:

We have consistently and clearly stated: Given the current market status of electric vehicles, the CAFE rule finalized by the previous administration is extremely challenging for automakers.

According to reports, the American Petroleum Institute, a petroleum industry group, also lobbied the Trump administration to eliminate the Biden-era fuel efficiency standards, arguing that they were intended to phase out gasoline vehicles.

Catering to Market Demand and Lowering Car Costs

In addition, supporters of the plan believe that easing the fuel efficiency standards is based on practical business considerations and helps address the industry's ongoing concerns over vehicle affordability.

Reports say many attendees, including U.S. dealers, stated that the new standards better match the models consumers truly want to buy, rather than the more expensive vehicles automakers are forced to produce under regulatory pressure.

Vehicle affordability has become a major concern in the auto industry, with the average purchase price of new cars in the U.S. currently hovering around $50,000. Trump and other officials also claim the new rules will help boost vehicle affordability.

According to reports, while traditional automakers welcomed the shift in policy, Tesla, as the leader of the electric vehicle market in the U.S., has not responded to requests for comment on the lowering of fuel efficiency standards.

Analysts believe the Trump administration's move will undoubtedly create a new market environment for companies focused on electric vehicle development, such as Tesla.

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