NHTSA finalizes fuel economy rollback, projecting 34.9 mpg fleet average by 2031

The National Highway Traffic Safety Administration has finalized a sweeping rollback of federal fuel economy rules. The Department of Transportation announced the final rule on Sept. 28, and it was published in the Federal Register on Sept. 30 as the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule III. It takes effect Nov. 30, 2026, and rewrites Corporate Average Fuel Economy standards for passenger cars and light trucks for the 2022 through 2031 model years.

NHTSA estimates the new standards correspond to an industrywide fleet average of roughly 34.9 mpg in the 2031 model year. The Biden administration's standards would have required 50.4 mpg by 2031, according to Roll Call. NHTSA stresses that 34.9 mpg is a projection: the actual standards are footprint-based curves, so each automaker's target depends on the mix of vehicles it sells.

What changes

• Slower increases: Passenger-car standards rise 0.90% a year from the reset 2022 level through 2029, then 1% a year through 2031. Light-truck standards rise 0.51% a year through 2029, then 1% a year.
• No more credit trading: NHTSA is ending inter-manufacturer credit trading starting with credits earned in the 2028 model year. Credits earned through 2027 can still be bought and used for up to five model years.
• Fewer add-on credits: NHTSA removed air-conditioning efficiency and off-cycle technology improvements from its standard-setting analysis starting in 2028.
• New vehicle classes: Starting with the 2030 model year, many vehicles now counted as light trucks, such as all-wheel-drive crossovers and three-row people movers, move into the passenger-car fleet. NHTSA says 68% of today's light-duty fleet meets the current light-truck definition.

NHTSA says it set the standards without counting the fuel economy of electric vehicles, describing the reset as removing regulatory distortions that pushed automakers into design decisions out of step with market demand. Automakers also face little financial risk for missing the targets: Congress zeroed out civil penalties for CAFE noncompliance in the July 2025 budget reconciliation law.

Cheaper cars or bigger fuel bills

NHTSA estimates the rule will cut the average up-front cost of a new vehicle attributable to fuel economy rules by about $1,290 compared with keeping the previous standards. DOT rounded that to $1,300 per vehicle and claims $138 billion in consumer savings over five years.

"Newer cars are safer cars. By reducing vehicle prices, more American families will be able to afford newer vehicles." — Jonathan Morrison, NHTSA administrator

Critics point to the other side of the ledger. The Environmental Defense Fund said Americans would spend an average of $1,600 more on gasoline under the rule, a figure it said comes from NHTSA's own regulatory impact analysis, and more at today's high fuel prices. The Alliance for Automotive Innovation, which represents most major automakers, called the rule "an appropriate course correction."

What it means for buyers

Don't expect sticker prices to drop overnight. Most 2026 and 2027 models are already engineered and built, and Roll Call notes the rule's practical effect falls mainly on the 2028 model year and later. Edmunds head of insights Jessica Caldwell warned that "changes to fuel economy requirements don't necessarily translate into lower prices on dealer lots." Over time, looser targets and the end of credit trading ease the regulatory pressure on automakers to sell EVs and make it easier to keep big gas engines, such as the V-8 pickups now in strong demand, in production. Legal challenges are expected, and the reclassification of crossovers won't arrive until the 2030 model year.