MW Trump touts rollback of fuel standards. Here's why it 'won't suddenly make cars cheaper.'

By Robert Schroeder

'The real drivers of higher vehicle prices today are tariffs on parts and metals, more expensive commodities and all the new technology consumers expect,' analyst says

President Donald Trump announced a proposal to roll back fuel-economy standards in the Oval Office on Wednesday.

The Trump administration on Wednesday proposed a major rollback of fuel-economy standards, in what the White House promoted as a cost-saving move for American families.

Appearing in the Oval Office with industry leaders, including executives from Ford $(F)$ and Stellantis $(STLA)$, President Donald Trump said the Department of Transportation would rescind the Biden-era fuel-economy standards.

"I hate to say that because they were really not economy," Trump said. "They were really, they were anti-economy."

Under the Biden-era rules, carmakers would have needed to achieve a fuel-efficiency standard of about 50 miles to a gallon of gas by 2031. Trump's proposal would lower that requirement to 34.5 miles to the gallon.

Some observers are skeptical the move will result in lower car prices.

"Rolling back fuel-efficiency rules won't suddenly make cars cheaper," said Patrick De Haan, head of petroleum analysis at GasBuddy.

"Automakers already paid for the technology years ago - you can't unbuild factories or revert to old engines. The real drivers of higher vehicle prices today are tariffs on parts and metals, more expensive commodities and all the new technology consumers expect, like larger screens and safety systems," said De Haan.

Now read: U.S. economy is still growing, ISM says, but 'tariff uncertainty' is depressing sales and hiring

Public Citizen, a left-leaning consumer group, said the administration's move would actually raise gas (RB00) prices.

"The previous fuel economy standards - which the Trump administration has now said it will not enforce - would have saved Americans $23 billion in fuel costs and reduced our national fuel consumption by 70 billion gallons," said Will Anderson, a policy advocate in Public Citizen's climate program.

Cars have become more expensive as they become loaded with safety features, infotainment devices and advanced driver-assistance systems. A new car in the U.S. costs about $50,000 on average.

U.S. buyers have gravitated to pricier SUVs and pickup trucks for years, leading carmakers to cut back or stop production of cheaper sedans and smaller cars. Only a couple of compact cars sell for less than $15,000, and a robust vehicle-financing market may tempt many buyers to overextend themselves for pricier cars, with term loans creeping above five years.

Trump was joined at the White House event by Ford CEO Jim Farley, Stellantis CEO Antonio Filosa and John Urbanic, manager of General Motors' $(GM)$ Orion, Mich., plant.

Trump said the Biden-era policies "imposed expensive restrictions and gave all sorts of problems to automakers." Had the Trump administration not acted, the White House said, Biden's policies would have raised the average cost of a new car by almost $1,000.

Claudia Assis and Myra P. Saefong contributed.

-Robert Schroeder

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

December 03, 2025 16:29 ET (21:29 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.