The Transportation Department released its final fuel economy rule on Monday. The rule sets the fleetwide target at about 34.9 miles per gallon for model year 2031. The Biden-era rules had aimed for about 50 mpg. Under the new rule, automakers need to improve efficiency by up to 1% a year. The Biden rules required about 2%. The biggest changes hit cars from model year 2028 on. Starting with model year 2030, many small crossovers will count as cars instead of light trucks. Starting with model year 2028, automakers also can't trade newly earned credits with each other. The administration first proposed the rollback last December. The rule takes effect 60 days after the government publishes it in the Federal Register. Congress already cut the penalty for missing the standards to zero in July 2025.

1. Cars Will Get Cheaper Without an EV Mandate

The administration and automakers say the old rules forced electric cars on buyers and pushed prices up.

The old rules pushed automakers to build electric cars. Transportation Secretary Sean Duffy said Monday, "we have finally ended the illegal mandate that forced automakers to produce more expensive electric vehicles." Automakers agree. Their trade group, the Alliance for Automotive Innovation, said the Biden rules "effectively required a switchover to electric vehicles that was out of step with market realities and customer demand." Alliance CEO John Bozzella called the rule "an appropriate course correction."

New cars will cost about $1,300 less. That's the department's estimate. It also says the rule will save Americans $138 billion over five years. The average new vehicle cost $49,855 in July.

Fewer people will die on the roads. "Newer cars are safer cars," said Jonathan Morrison, who runs the National Highway Traffic Safety Administration. His agency projects 1,900 fewer traffic deaths through 2050. The agency says most of that drop comes from people driving less as gas gets pricier.

2. But Drivers Will Pay More at the Pump

Consumer and economic groups say any savings on the sticker price will disappear at the gas station.

The government's own numbers show drivers paying more for gas. The Environmental Defense Fund points to the agency's analysis, which projects that drivers will spend about $1,600 more on gas over a car's life. The agency assumed gas would cost $3.30 a gallon. Regular gas averaged $4.48 on Monday. The rule "will mean wasted gas, more pollution, and higher costs for Americans who are already struggling with high fuel prices," said Andy Su, a senior attorney at the group.

Buyers may never see the sticker savings. The agency's net estimate has buyers coming out only $270 to $315 ahead. And that's only if automakers pass their savings on. Straight Arrow News reported that no auto trade group confirmed plans to cut prices.

Buyers care about mileage. Consumer Reports found that 68% of likely car buyers call fuel economy very or extremely important. "Fuel economy standards are a proven way to drive down the cost of driving for consumers," said Chris Harto, an advocacy manager at Consumer Reports.

The old rules would have saved drivers billions. Jason Schwartz, regulatory policy director at NYU's Institute for Policy Integrity, said the 2024 rules were projected to save consumers $80 billion in fuel.

3. And the Rule Will Dirty the Air and Break the Law

Health and environmental groups say the rule will make people sick, and they plan to fight it.

Cars will burn more gas and put out more pollution. The agency itself expects Americans to burn 4.6% more gasoline through 2050 than under the Biden-era standards. Transportation produces 28% of U.S. greenhouse gas emissions. "Today's rule to weaken fuel economy standards will create more air pollution, harm health and accelerate climate change," said Harold Wimmer, president of the American Lung Association.

Environmental lawyers say the rule breaks the law. "This rollback is not only bad policy; it also violates the law," said Atid Kimelman, an attorney at the Natural Resources Defense Council. Katherine García, who directs the Sierra Club's clean transportation program, said the group "will fight this senseless rollback every step of the way."

The old rules did what they promised. Former EPA Administrator Gina McCarthy said fuel economy standards "have saved Americans money and cut pollution at the same time" for 50 years.

Where This Lands

The administration and automakers say the rule ends a backdoor electric-car mandate and makes new cars about $1,300 cheaper. Consumer groups say the government's own numbers show drivers losing that money back at the pump. Gas is already near $4.50. Health and environmental groups say the rule means dirtier air, and they plan to fight it.

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