Trump Administration Slashes 2031 CAFE Target to 34.9 MPG

The Trump administration has finalized a new Corporate Average Fuel Economy (CAFE) rule that lowers the projected fleetwide fuel economy requirement for passenger cars and light trucks in model year 2031 to roughly 34.9 mpg.

The previous standard was projected to reach 50.4 mpg, meaning the new rule substantially reduces the fuel economy target automakers will have to meet.

New CAFE Rule Reduces Fuel Economy Requirements

CAFE standards regulate the average fuel economy of an automaker’s passenger-car and light-truck fleet. Because the requirement applies across a manufacturer’s lineup, automakers can balance less-efficient vehicles with more efficient models when meeting the fleetwide target.

NHTSA says the new rule is projected to produce an industry fleetwide average requirement of roughly 34.9 mpg for model year 2031. The agency also says the rule eliminates the inter-manufacturer credit trading system beginning with model year 2028, according to RivianTrackr.

That represents a significant reduction from the 50.4 mpg industry fleetwide average that NHTSA projected under the 2024 CAFE standards for 2031. Those earlier standards called for fuel economy increases of 2% annually for passenger cars through 2031 and for light trucks beginning in 2029.

The Trump administration has argued that resetting the standards will reduce vehicle costs and make vehicles easier to manufacture. NHTSA’s current rulemaking projects a roughly $1,300 reduction in the average new-vehicle price.

Higher Fuel Costs Add Another Dimension

The change comes as U.S. gasoline prices have risen sharply. The average price reached $4.47 per gallon on September 28, according to AP reporting, compared with $3.13 a year earlier.

The average transaction price for a new vehicle also reached $50,089 in August, according to Kelley Blue Book data.

The CAFE change could also affect the competitive environment for EV manufacturers. EVs accounted for 5.7% of U.S. new-vehicle sales in August, according to Kelley Blue Book, while the federal $7,500 EV tax credit expired in September 2025.

For Rivian, the revised rules have an additional implication because the company has generated revenue by selling regulatory credits to other automakers. The supplied source says Rivian previously estimated that changes to fuel-economy enforcement had reduced its revenue by about $100 million, although that figure was not independently verified for this article.

The new standards are scheduled to govern model years through 2031, giving automakers several years to adjust their product plans. NHTSA says the final rule resets the CAFE program for model years 2022 through 2031.

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