On the Dash:
- The new rules put the projected 2031 fleetwide fuel economy average at about 34.5 mpg, down from roughly 50.4 mpg projected under the 2024 standards.
- Lower requirements could give automakers more flexibility across gasoline-powered cars, SUVs and pickups as they plan future product mix.
- The change comes as dealers and consumers continue to navigate vehicle affordability, fuel costs and shifting demand across gasoline, hybrid and electric models.
The National Highway Traffic Safety Administration (NHTSA) finalized a new Corporate Average Fuel Economy (CAFE) framework Monday, replacing the more stringent trajectory the agency set in 2024.
Under the final rule, NHTSA projects a fleetwide average fuel economy of about 34.5 miles per gallon (mpg) for model year 2031. However, the 2024 rule required passenger car standards to rise 2% annually through model year 2031 and light-truck standards to rise 2% annually for model years 2029 through 2031, which NHTSA projected would push the fleetwide average to about 50.4 mpg by 2031.
The lower CAFE requirements reduce the fuel economy performance that manufacturers must achieve across their fleets. That change may give gasoline-powered vehicles, including SUVs and pickups, more flexibility. Automakers, however, still must manage overall fleet fuel economy and comply with other applicable vehicle regulations.
Notably, the Trump administration has argued that less stringent standards could reduce vehicle production costs. While NHTSA also built the new standards around gasoline and diesel vehicles only, consistent with its June 2025 interpretive rule, it doesn’t include EVs in setting them. But actual retail pricing will continue to depend on manufacturing costs, incentives, financing, vehicle mix, and consumer demand.
Fuel costs add another variable for dealers
The regulatory change comes at a time when gasoline and diesel prices remain crucial factors for consumers. With more gasoline-powered vehicles available, shoppers may have more options, but fuel costs still play a significant role in ownership.
Dealers will need to balance product availability with local demand across internal combustion engine (ICE), hybrid and EV segments. The lower CAFE trajectory eases pressure on automakers to increase fleet efficiency. Even so, consumer demand, technology costs, state regulations and other federal requirements will continue to influence the future mix of vehicles.
For dealers, the practical impact will become evident through the availability of future models, pricing and powertrain options.
