Trump Rolls Back CAFE Fuel Economy Standards as Gas Hits $4.47

The Trump administration finalized new fuel economy standards on Monday that cut the 2031 fleetwide target to roughly 34.9 mpg, down from the 50.4 mpg the Biden-era rules were headed toward, and the timing honestly couldn’t be worse. The AP reported that gas averaged $4.47 on Monday, up from $3.13 a year ago, with the war with Iran squeezing the global oil supply.

So everyone’s paying more at the pump, and the government’s answer is to let new cars burn more gas.

CAFE, short for Corporate Average Fuel Economy, goes back to the 1970s energy crisis and sets the average mpg an automaker’s whole lineup has to hit. The key word is average, so a company can keep selling big trucks as long as enough efficient vehicles balance them out, and automakers that fall short can buy credits from companies that beat the target, like Rivian. Tighter standards pushed legacy automakers toward hybrids and EVs, so when you loosen them, most of that pressure just disappears.

Ford, GM, and Stellantis all cheered the change, and DOT says it’ll knock about $1,300 off the average new vehicle. That’s a fair point on paper, but the average new car just crossed $50,089 in August, and $1,300 doesn’t last long at $4.47 a gallon.

This one matters to me beyond the EV angle too. Transportation already makes up 28% of U.S. greenhouse gas emissions, and environmental groups estimate the rollback could mean 22,111 more tons of carbon dioxide a year by 2035, plus an extra 90 tons of soot and 4,870 tons of smog-forming pollutants every year. That’s air all of us breathe, and it’s the part of this rule I have the hardest time with.

It also piles on top of the $7,500 EV credit going away and the fines for missing mileage standards getting repealed. EVs made up just 5.7% of new sales in August, down from 7.4% for all of 2025. Rivian already took about a $100 million hit when those fines went away, and with weaker targets now too, legacy automakers have even less reason to buy the regulatory credits Rivian sells.

Rules can flip again with the next administration, but automakers plan vehicles years out, so this one’s going to stick around longer than any single term.

Jose Castillo Founder and Editor

Jose Castillo is the founder of RivianTrackr and has owned and driven Rivians since early in the brand's consumer history. He currently drives an R1S and an R2 in Florida and uses Universal Hands-Free every day. As a credentialed Rivian journalist, he has covered the R2 First Drive in Park City and SXSW firsthand and has spoken directly with Rivian's software and autonomy leadership.

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