President Donald Trump says he has approved new federal fuel economy standards that would sharply ease Biden era requirements. The final rule is due Monday, so the exact numbers remain unconfirmed, but the administration’s December proposal points to a much lower 2031 target.

President Donald Trump said Saturday that he had approved new Corporate Average Fuel Economy standards, setting up a formal Transportation Department announcement expected Monday. Trump framed the move as an end to what he calls an electric vehicle mandate and said looser rules would cut vehicle prices and give automakers more freedom over what they build.

The regulatory text had not been released as of Sunday. That matters because the administration’s December 2025 proposal was extensive. It would lower the projected fleetwide average for model year 2031 light duty vehicles to about 34.5 mpg, compared with roughly 50.4 mpg under the rule finalized during the Biden administration.

What Trump has approved

Trump’s Truth Social post supplied the political message but not the technical rule. He said the standards would lower prices, encourage U.S. production and reverse policies that, in his view, pushed consumers toward vehicles they did not want. Transportation Secretary Sean Duffy said a major announcement for auto workers was coming Monday.

The rulemaking itself has been moving for months. NHTSA unveiled the proposed reset in December 2025, and the Office of Information and Regulatory Affairs completed its review of the final rule in August 2026. The regulatory review record identifies the action as a final rule and says the review concluded “consistent with change.”

That makes Monday’s release the point at which the public should see whether the final standards closely track the proposal or contain significant revisions. Until the agency publishes the operative text, the 34.5 mpg figure and other December provisions remain a guide to the likely policy rather than confirmed terms of the final rule.

The proposed change is large

Under the Biden era rule finalized in June 2024, NHTSA projected average light duty fuel economy of about 50.4 mpg by model year 2031. The standards increased 2% per year for passenger cars in model years 2027 through 2031 and 2% per year for light trucks in model years 2029 through 2031.

NHTSA’s December 2025 proposal took a substantially different approach. It proposed much smaller annual increases from revised earlier year standards, producing a projected industrywide average of about 34.5 mpg in 2031. It also proposed eliminating credit trading between manufacturers and changing how some vehicles are classified between passenger car and light truck fleets beginning in model year 2028.

Those changes affect how manufacturers plan entire product portfolios. CAFE standards are fleetwide averages, not a requirement that every individual vehicle achieve one universal mpg figure. Manufacturers have historically balanced vehicles with different efficiency levels across their regulated fleets while using available technologies and compliance mechanisms.

An EV mandate is shorthand

Trump consistently describes the Biden policy as an “EV mandate.” The Biden era CAFE rule did not require individual Americans to purchase electric vehicles or ban gasoline powered vehicles. NHTSA said manufacturers could use advanced internal combustion engines, hybrids, EVs and other available technologies to comply with the standards.

A separate EPA policy also encouraged greater electrification. The agency’s 2024 light and medium duty emissions standards were performance based and technology neutral, with compliance pathways involving cleaner gasoline vehicles, hybrids, plug in hybrids and battery EVs. EPA projected battery EVs could account for roughly 30% to 56% of new light duty sales during model years 2030 through 2032, depending on manufacturers’ choices.

The Trump EPA rescinded federal motor vehicle greenhouse gas standards in February 2026 after also rescinding the 2009 Endangerment Finding on which those regulations rested. The administration’s broader policy reset also includes the expiration of federal clean vehicle purchase credits after Sept. 30, 2025. The new vehicle credit had been worth up to $7,500 for qualifying purchases.

Trump also said billions had been spent on chargers that were “never built.” Federal charger deployment has in fact produced operating sites. Pennsylvania’s Transportation Department said Sept. 17 that it had opened its 50th federally funded NEVI station. The federal Joint Office of Energy and Transportation also maintains data on NEVI funded charging infrastructure nationwide.

Prices come with a tradeoff

The administration’s central economic argument is that less stringent standards reduce the amount of costly fuel saving technology manufacturers must install to comply. NHTSA’s December proposal modeled average regulatory cost for the 2031 light duty fleet at about $1,179 per vehicle under its preferred alternative, compared with $2,104 under its no action baseline, a difference of roughly $925.

That does not mean every new vehicle would become $925 cheaper. Manufacturer pricing depends on far more than regulatory compliance costs, including vehicle mix, labor, materials, financing conditions, competitive pressure and how much of any cost change a manufacturer passes to buyers. NHTSA’s modeling nevertheless treats reduced compliance expense as a potential source of lower upfront costs.

Affordability remains a major market issue. Kelley Blue Book said the average U.S. new vehicle transaction price reached $50,089 in August 2026, the first month this year above $50,000. It attributed pricing partly to a market mix weighted toward SUVs, pickups and premium vehicles.

Lower efficiency requirements create the opposite effect at the gas pump. NHTSA’s December analysis projected higher gasoline and diesel consumption under its preferred alternative than under the existing standards. For calendar year 2050, the model showed about 77.8 billion gallons consumed under the preferred alternative, compared with 72.1 billion gallons under the no action baseline.

Reuters, citing Transportation Department estimates, reported that the proposal could increase cumulative fuel consumption by about 100 billion gallons through 2050, add as much as $185 billion in fuel spending and increase carbon dioxide emissions by about 5% compared with the existing rule baseline.

That tradeoff is unusually visible now because gasoline prices are elevated. AAA said the national average for regular gasoline was $4.48 a gallon on Sept. 24, the highest average it had recorded for that time of year. For buyers comparing a less efficient gasoline vehicle with a hybrid, lifetime fuel costs can therefore matter alongside the purchase price.

Hybrids may keep gaining ground

Looser CAFE rules give automakers more room to sell conventional gasoline vehicles without needing as much fleetwide efficiency to offset them. But the market is not dividing neatly into gasoline vehicles on one side and full EVs on the other.

Hybrids have been one of the stronger parts of the U.S. market in 2026. The Alliance for Automotive Innovation reported that hybrid market share reached 22.2% in the second quarter, up 4.9 percentage points from a year earlier. Conventional internal combustion vehicles still dominated at 69.9%, although that share was down from 73.2% a year earlier.

Hybrids improve fuel economy without requiring drivers to rely on public charging, while also reducing gasoline use compared with otherwise similar conventional vehicles. Automakers could therefore have commercial reasons to keep expanding hybrid offerings even if federal efficiency standards become less stringent, particularly while fuel prices remain high.

EV sales have already reset

The U.S. EV market entered this rule change in a weaker position than a year earlier. The Alliance for Automotive Innovation said automakers sold 556,477 EVs during the first half of 2026, down 26.8% from the same period in 2025. EVs represented 7.1% of new U.S. light duty sales during those six months.

Second quarter results showed some sequential improvement but remained lower than a year earlier. The alliance reported EV market share of 7.9% in the quarter, down from 9.5% a year earlier, while EV sales volume fell 15%. The expiration of federal purchase incentives changed the market backdrop, although prices, model availability and consumer preferences also influence sales.

State policy increasingly creates a different set of incentives. California’s MyFirstEV program offers qualifying first time zero emission vehicle buyers up to $3,500 off an eligible new vehicle and up to $1,750 off a qualifying used one. The program illustrates how state support can continue even as federal policy becomes less favorable to EV adoption.

Automakers wanted some changes

Major automakers broadly supported reducing the stringency of the Biden era CAFE requirements when they commented on the Trump administration proposal earlier this year. They did not, however, endorse every part of the plan.

The Alliance for Automotive Innovation, whose members include General Motors, Ford, Toyota, Volkswagen and Hyundai, asked NHTSA to retain credit trading between manufacturers and reconsider parts of the proposed vehicle reclassification system. The group argued that slower EV growth and reduced government support had made the previous standards difficult to achieve.

Credit trading lets manufacturers with excess compliance credits transfer them to companies facing shortfalls. Eliminating the system would remove one compliance option even while the underlying efficiency standards become less stringent. Monday’s rule should show whether NHTSA retained, modified or dropped that element of the proposal.

The legal tradeoff remains

The Biden administration justified tighter CAFE standards partly through lower petroleum consumption and emissions. NHTSA estimated its 2024 rule would save almost 70 billion gallons of gasoline and prevent more than 710 million metric tons of carbon dioxide emissions through 2050, while saving light duty vehicle owners more than $600 in fuel over a vehicle’s lifetime.

Federal law does not tell NHTSA simply to maximize mpg. It requires the agency to determine the “maximum feasible” average fuel economy level while considering technological feasibility, economic practicability, the effects of other government vehicle standards on fuel economy and the nation’s need to conserve energy.

In its rollback proposal, NHTSA concluded that technological feasibility and economic practicability supported significantly lower standards. Its own analysis also showed that the preferred alternative would consume more fuel than the existing rule baseline. The policy dispute therefore turns partly on how those competing statutory and economic considerations should be weighed.

Monday will settle the details

The biggest unanswered question is whether the final rule still lands near the proposed 34.5 mpg fleetwide average for 2031. The same uncertainty applies to credit trading, vehicle classification and the exact yearly requirements. Those details will determine how much additional flexibility automakers receive for product portfolios that rely heavily on gasoline powered vehicles.

The direction of federal policy is already clear from completed actions. Federal clean vehicle purchase credits have expired, EPA has repealed highway vehicle greenhouse gas standards, and NHTSA has advanced a final rule designed to make CAFE standards substantially less stringent than the Biden era requirements.

Those policies do not determine what Americans will buy. Gasoline prices, financing costs, model availability, charging access, state incentives and automakers’ product strategies will continue to influence the mix. Monday’s rule will change the federal regulatory boundaries, but competition among gasoline vehicles, hybrids and EVs will still be shaped by both policy and consumer demand.