Government Ditches EV Dreams for Crappier Gas Mileage by 2031
Published Date: 12/5/2025
Proposed Rule
Summary
The government is updating fuel economy rules for cars and light trucks from 2022 to 2031 to better match what Congress wants. These changes affect car makers by adjusting how fuel efficiency is measured, focusing on gas and diesel vehicles, and removing some credit trading. The new rules aim to make it easier and fairer for manufacturers while encouraging designs that Americans actually want, with some changes kicking in by 2028.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 0 costs, 3 mixed.
Who the Proposal Regulates
This proposal applies to companies that manufacture or sell new passenger automobiles (passenger cars) and non-passenger automobiles (light trucks) as defined in NHTSA's CAFE regulations. The rulemaking would amend standards for model years 2022–2026 and 2027–2031.
EVs and PHEV Electric Operation Excluded
NHTSA proposes that CAFE standards for MYs 2022–2031 be founded on gasoline- and diesel-powered light-duty vehicles (including non-plug-in hybrids) and that the agency will not consider battery electric vehicles (EVs) or the electric operation of plug-in hybrid electric vehicles (PHEVs) when setting those standards.
Inter-Manufacturer Credit Trading Ends in 2028
NHTSA proposes to eliminate inter-manufacturer credit trading beginning with model year 2028. Manufacturers would still be able to transfer earned credits within their own fleets and carry credits forward and backward across model years as statute permits.
Remove AC and Off-Cycle Credit Values (MY2028)
NHTSA proposes to remove consideration of air-conditioning (AC) efficiency and off-cycle fuel consumption improvement values (FCIVs) from standard-setting beginning with model year 2028. The agency says this will ensure standards are achievable without technologies not demanded by consumers.
Reclassifying Passenger vs Light-Truck Fleets
NHTSA proposes substantial reclassification of the light-duty fleet—moving many vehicles previously classified as light trucks into the passenger car fleet and updating classification criteria to be performance-based (e.g., approach angle, running clearance, payload/towing abilities). NHTSA says this will change measured fuel-economy averages for passenger and light-truck fleets.
Proposed Annual MPG Increase and 2031 Target
NHTSA proposes fuel-economy standards that increase at 0.5 percent per year from the newly proposed MY 2022 standards through MY 2026, then 0.25 percent per year through MY 2031, with a projected industry fleetwide average of roughly 34.5 miles per gallon (mpg) in model year 2031.
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