American drivers always complain that gasoline is too affordable, right? Not quite. The Trump Administration believes it has an answer for affordability, as this week it announced a reset of Corporate Average Fuel Economy (CAFE) standards from the Biden era. President Trump says these new standards will be easier for automakers to meet on their gasoline and diesel vehicles.
"The Biden Administration standards imposed unrealistic fuel economy targets that effectively resulted in an electric vehicle (EV) mandate. The Biden standards broke the law by going far beyond the requirements that were mandated by Congress when it created the CAFE program. If President Trump had done nothing, the Biden standards would have raised the average cost of a new car by nearly $1,000, relative to the cost under the standards announced today."
– The White House
"The Biden standards would have compelled widespread shifts to EVs that American consumers did not ask for, accompanied by significant cost-of-living increases. Since EVs are so expensive to build, automakers must sell them at a loss and make up the difference by significantly raising the sticker price of gas cars," the White House continued.
President Trump was joined by several cabinet members, members of congress, and automotive industry executives, including Ford CEO Jim Farley and Stellantis CEO Antonio Filosa. Today's announcements have wide-reaching implications for the automotive industry, potentially for decades to come. Trump also made some other bold, unexpected claims that were unrelated to fuel economy.
No More "EV Mandate"
Trump spent much of the announcement talking about how ending emission standards would bring down the price of vehicles. "We're canceling the EPA's observed tailpipe emission standards. I've never had a group of people come to me more powerfully and really just devastated that they had to do it; it was killing them," Trump said. "And the automobile manufacturers, I can tell you, your people at Ford were coming to and saying, 'please, it doesn't do anything, and it's killing us and driving costs through the roof.' So we revoked Biden's emissions waiver from California, so California communists could not regulate the automobile industry."
He then brought up US Secretary of Transportation Sean Duffy, who falsely claimed that President Biden and former Transportation Secretary Pete Buttigieg wanted to set a "62 mile per hour per gallon standard." Per the NHSTA, the Biden-era CAFE standards would have been approximately 50.4 mpg by 2031. "[Automakers] had to trade for carbon, costing billions of dollars, driving up the price of the car," Duffy said.
The Trump Administration claims the Biden-era regulations would have driven up the cost of new cars by "nearly $1,000." That might sound like a high number, but considering the average new car increases by around 3.5% each year and the average transaction price was over $50,000 in 2025, that's about a $1,750 increase year-to-year anyway. Biden's proposed gains in fuel economy could have more than offset a $1,000 price increase for consumers. A Toyota Prius, for example, can save you over $3,000 in five years compared to the average new car.
Did Trump Legalize Kei Cars?
Among the more baffling statements to emerge from this meeting came seemingly out of nowhere from Trump when he potentially legalized Kei cars, a small class of vehicle that is popular in Japan.
"If you go to Japan, they have a very small car, sort of like the Beetle used to be with the Volkswagen. They're very small. They're really cute. And they said, 'how would that do in this country?' Everyone seems to be good, but you're not allowed to build them. I've authorized the Secretary to immediately approve the production of those cars, so you'll be able to buy them."
– US President Donald Trump
It's highly unlikely that Trump could simply legalize an entire class of vehicle by executive order, as it would require an entire overhaul of our federal crash tests, not just fuel economy regulations. American automakers like Ford, General Motors, and Stellantis typically do not build small vehicles like these, at least not ones that are designed for the American market, though GM does have some affordable models that are built and sold in China. To sell them here, automakers would need to localize production to avoid tariffs.
"We were number two last year in EV sales. We were number three in hybrid, and we're the leading brand for combustion. We believe that people should be able to make a choice, as you said, Mister President, and we will invest more in affordable vehicles," said Ford CEO Jim Farley during the White House meeting. "This allows us to invest in affordable vehicles made in the US." It's unclear why Ford, the company famous for discontinuing all of its passenger cars besides SUVs and trucks, couldn't have focused on affordable vehicles prior to this announcement.
Source: White House, AAA
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This article originally appeared on CarBuzz and is republished here with permission.
