Washington has lowered the fuel economy requirements facing automakers, and the practical question is simple: Will consumers save money, or just spend it somewhere else? The answer depends on vehicle prices, gasoline costs and how much you drive. The change gives manufacturers more flexibility, but a lower purchase price does not automatically mean a lower total cost of ownership.
First, an important distinction: The action announced Sept. 28 came from the U.S. Department of Transportation’s National Highway Traffic Safety Administration, commonly called NHTSA, rather than the Environmental Protection Agency. It changes Corporate Average Fuel Economy standards, known as CAFE. The EPA separately repealed federal vehicle greenhouse gas standards in February. These are related policies, but they are different regulatory programs. According to the EPA, its February action did not eliminate regulations covering traditional air pollutants.
Under the previous fuel economy rules, the government projected an industry average requirement of approximately 50.4 miles per gallon for the 2031 model year. NHTSA now projects approximately 34.9 mpg. That is a substantial reduction in the requirement, but it does not mean every new vehicle must deliver 34.9 mpg. These are manufacturer fleet averages, with requirements that account for vehicle size and classification. A pickup and a small sedan do not face identical targets.
Also, those government compliance numbers are different from the mileage estimates printed on window stickers. The EPA explains that CAFE calculations and consumer fuel economy labels serve different purposes. Sticker estimates account for additional conditions, including higher speeds, air conditioning and cold temperatures. For shopping purposes, compare the city, highway and combined mileage ratings on the vehicles themselves. The federal fleet target is not a prediction of what your next SUV will get on the morning commute.
For buyers, the potential benefit is a less expensive vehicle. Meeting tougher mileage requirements can require manufacturers to install additional technology or change the vehicles they produce. Relaxing those requirements reduces that pressure. NHTSA estimates average vehicle technology costs could be approximately $1,289 lower for the 2031 model year than under the previous standards. However, its rule explicitly makes consumer savings conditional on manufacturers passing those reductions along. That figure is not a guaranteed discount waiting at your dealership.
The trade-off arrives at the gas pump. According to Reuters, the Transportation Department estimates the change will increase lifetime fuel costs by more than $1,600 per vehicle. That is a projection, not a bill every owner will receive. Your actual result depends on the vehicle you buy, miles driven, fuel prices and ownership period. Still, the government’s own estimates show why a cheaper vehicle can become more expensive to operate.
Here is a simple illustration, separate from the government’s projections: Drive 15,000 miles annually, and a vehicle averaging 25 mpg uses 600 gallons. One averaging 30 mpg uses 500 gallons. At an assumed $3.50 per gallon, the difference is $350 a year, or $1,750 over five years. Fuel economy deserves a place beside the monthly payment when comparing vehicles.
For automakers, the rollback provides more room to plan products around customer demand while reducing the technology needed to satisfy federal requirements. The Alliance for Automotive Innovation, which represents major manufacturers, welcomed the change. The group said the previous standards pushed an electric vehicle transition that did not match market conditions, while also emphasizing the need for lasting regulatory stability. That matters because manufacturers must commit money to vehicles and factories years before those products reach showrooms.
Another industry change ends CAFE credit trading between manufacturers beginning with the 2028 model year. Companies exceeding requirements have been able to sell credits to other manufacturers; that compliance option is being removed.
My Take
Let’s be honest, 50.4 miles per gallon average fuel economy was NEVER EVER going to happen by 2031. It wasn’t even going to be close. If electric cars had been a hit, it still wouldn’t have gotten there, but we know how that essentially ended: America rejected EVs for the most part.
For consumers, you’ll have more choices, at least for now. If you want more horsepower, it will be available. It will slow annoying technology like start/stop, and hopefully, bring back items consumers want, like spare tires. Those were often eliminated in an attempt to cut weight and improve fuel economy by a fraction of one mile per gallon.
For automakers, they will be better able to build vehicles to demand, to make the vehicles people want to buy, without having to force fuel-efficient vehicles just to try to meet government mandated averages.
Does this mean a DRASTIC change? Not likely for the short term. A lesson learned by automakers who lost billions of dollars on electric vehicles: A change in leadership in 2028 can change EVERYTHING. The emphasis can flip literally overnight, so all will be conscious not to go too far either direction in the future. Better fuel economy can be achieved over time, while still meeting market demand. It’s a delicate balancing act, but one automakers will get better at as time goes on. The main takeaway should always be to build what customers are wanting to buy.
Editorial credit: Matt Gush / Shutterstock.com. Los Angeles. October 18, 2025.