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Traffic on Interstate 80 in San Pablo, California, US, on Wednesday, Nov. 26, 2025.
David Paul Morris | Bloomberg | Getty Images
President Donald Trump on Wednesday proposed big cuts to strict fuel economy standards for passenger cars enacted under the Biden administration.
"We are officially terminating Joe Biden's ridiculously burdensome, horrible actually, CAFE standards that imposed expensive restrictions," Trump said at the Oval Office, flanked by the CEOs of Ford Motor and Stellantis.
The Corporate Average Fuel Economy, or CAFE, standards date back to 1975 and have been tightened over the years to make vehicles more efficient.
Former President Joe Biden had required automakers to increase the fuel efficiency of passenger cars and light trucks to about 50 miles per gallon by 2031. These stricter standards were expected to stimulate the production and sale of electric vehicles in the U.S.
The standards proposed by the Trump administration would require cars to get about 34 miles to the gallon by 2031, according to the Highway Traffic Safety Administration.
Trump has sought to dismantle pollution regulations and federal support for electric vehicles as well as renewable energy since taking office.
The oil industry group the American Petroleum Institute has lobbied the Trump administration to repeal the Biden fuel economy standards, contending that they aim to phase out liquid fuel vehicles.
The announcement was attended by Ford CEO Jim Farley and Stellantis CEO Antonio Filosa, as well as a plant manager for General Motors from Michigan.
Many of the officials in attendance, including U.S. dealers, said the new standards are more in line with the vehicles customers want to buy rather than the more costly ones automakers have been pushed to produce due to regulations.
Trump and other officials also touted the new regulations as assisting in vehicle affordability, which has been an ongoing concern for the automotive industry, as the average new vehicle purchased hovers around $50,000.
The Alliance for Automotive Innovation, a trade group that represents the majority of automakers operating in the U.S., also praised the cuts.
"We're reviewing NHTSA's announcement, but we're glad the agency has proposed new fuel economy standards," John Bozzella, CEO of the organization, said in a statement. "We've been clear and consistent: The current CAFE rules finalized under the previous administration are extremely challenging for automakers to achieve given the current marketplace for EVs."
U.S. EV leader Tesla did not respond for comment regarding the reduced standards.
— CNBC's Phil LeBeau and Lora Kolodny contributed to this report.
