New U.S. fuel economy standards lower the projected fleetwide requirement for model year 2031 to 34.9 mpg, replacing the previous 50.4 mpg projection. Federal analysis says the change could reduce vehicle purchase prices but increase fuel use, consumer fuel spending and emissions over time.
New CAFE Standards Lower the 2031 Target
The National Highway Traffic Safety Administration finalized revised Corporate Average Fuel Economy (CAFE) standards on September 28, 2026. The rules cover passenger cars and light trucks through model year 2031 and significantly change the trajectory established under the previous administration.
NHTSA estimates the updated standards will result in an industry fleet average of approximately 34.9 mpg in 2031. The earlier rules adopted in 2024 were projected to reach about 50.4 mpg for that model year.
CAFE standards regulate the average efficiency manufacturers must achieve across their fleets rather than requiring every individual vehicle to meet one fixed mpg number. The new policy gives automakers greater flexibility to continue offering gasoline-powered vehicles while meeting lower overall efficiency requirements.
The administration argues that the previous standards placed excessive costs on manufacturers and indirectly encouraged greater EV production. The former rules did not explicitly require consumers to purchase electric vehicles, but higher fleet efficiency targets gave automakers incentives to increase sales of EVs and other efficient powertrains.
Lower Vehicle Prices Come With Higher Fuel Costs
Affordability is a central argument supporting the revised standards.
The Department of Transportation estimates the rule will reduce the average upfront cost of a new vehicle by about $1,300, largely because manufacturers can avoid some technologies and investments that would otherwise be needed to meet stricter efficiency requirements. The administration projects broader economic savings from reduced regulatory costs.
However, lower purchase prices do not necessarily translate into lower lifetime transportation costs.
NHTSA’s analysis estimates that consumers could spend more than $1,600 extra on fuel over a vehicle’s lifetime because vehicles would consume more gasoline than under the previous standards. Reuters reports that total fuel consumption is projected to increase by approximately 4.6% through 2050 compared with the earlier regulatory path.
Actual costs will depend on factors including fuel prices, annual mileage and the types of vehicles manufacturers sell.
Fuel Consumption and Emissions Are Expected to Rise
The environmental trade-offs are also part of the federal government’s analysis.
Less stringent efficiency requirements are expected to increase gasoline consumption relative to the previous standards. That additional fuel use would consequently produce higher carbon dioxide and other vehicle-related emissions.
These projections compare the new standards with alternative regulatory scenarios rather than suggesting that total U.S. fuel consumption will necessarily rise every year. The Department of Transportation notes that annual oil consumption in 2050 is still projected to be approximately 1.3 billion barrels lower than the 2024 level under the final rule.
The distinction is important: fuel use can decline from today’s level while still being higher than it would have been under stricter efficiency standards.
Environmental organizations have criticized the revision because of those additional emissions and fuel costs. The administration, meanwhile, argues that the affordability and consumer-choice benefits justify the change.
Automakers Gain More Flexibility Under the Rule
The revised standards make broader structural changes beyond the 2031 mpg target.
Starting with model year 2028, NHTSA plans to eliminate inter-manufacturer trading of CAFE compliance credits. That system previously allowed manufacturers exceeding their requirements to sell credits to companies falling short.
Vehicle classification rules will also change. Beginning in model year 2030, NHTSA intends to revise how crossovers and other vehicles are categorized as passenger cars or light trucks, with the agency projecting a substantial shift toward passenger-car classification.
The Alliance for Automotive Innovation, which represents many major automakers, has supported the less stringent standards as better aligned with current consumer demand and industry conditions. Environmental organizations including the Sierra Club have opposed the change, emphasizing higher fuel consumption, emissions and household gasoline expenses.
The final result is a different balance of priorities. Automakers face lower efficiency requirements and potentially lower compliance costs, while federal analysis projects greater fuel use and emissions than under the rules being replaced.
FAQ
What is the new U.S. fuel economy target for 2031?
NHTSA estimates that the revised standards will produce a fleetwide average of approximately 34.9 mpg for model year 2031. The previous standards were projected to reach about 50.4 mpg.
Will the new CAFE rules make cars cheaper?
The Department of Transportation estimates that the revised standards will reduce the average new-vehicle purchase price by approximately $1,300. That estimate reflects lower compliance and technology costs for manufacturers.
Will drivers spend more on gasoline?
Federal analysis indicates that lower vehicle efficiency will increase fuel consumption compared with the previous standards. Reuters reports an estimated increase of more than $1,600 in lifetime fuel costs per vehicle.
Do the previous CAFE rules require automakers to sell EVs?
The previous CAFE standards did not directly require a specific number of electric vehicles to be sold. Their higher fleetwide efficiency requirements could, however, encourage manufacturers to increase EV sales and use other efficiency technologies to meet their targets.
What happens to CAFE credit trading?
NHTSA says inter-manufacturer CAFE credit trading will end beginning with model year 2028. The change removes a system that allowed manufacturers to purchase compliance credits from other automakers.
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