U.S. Moves to Cut 2031 Fuel-Economy Target to 34.5 MPG in NHTSA Proposal

Overview

• NHTSA proposes raising Corporate Average Fuel Economy only 0.25% to 0.5% per year, setting a 34.5 mpg fleet target for 2031, down from the Biden-era goal of 50.4 mpg.
• The plan would reclassify many car-based SUVs and small off-roaders as passenger vehicles and end fuel-economy credit trading by 2028, which NHTSA says has been a windfall for EV-only makers.
• The White House frames the change as an affordability measure, even as Congress previously set CAFE noncompliance penalties to zero and ended the $7,500 federal EV tax credit.
• Major automakers welcomed the proposal, with Ford CEO Jim Farley calling it a victory for affordability and Stellantis chief Antonio Filosa touting room to expand V8 offerings.
• Environmental groups and California Governor Gavin Newsom condemned the move as a rollback that would raise fuel costs and pollution, and the proposal remains subject to revision after public input.