The Trump government has approved new, significantly lower vehicle fuel-economy standards, reversing key Biden-era requirements and putting an end to what his administration describes as policies that pushed electric-vehicle adoption. The cost of new vehicles would be reduced under the new standards; however, this would increase fuel consumption and carbon dioxide emissions in the coming years, according to the department.
The US Transportation Department, through the National Highway Traffic Safety Administration (NHTSA), is expected to finalise the revised standards on Monday, covering vehicles through 2031. Transportation Secretary Sean Duffy said the move would be a major victory for US auto workers, Reuters reported.
ALSO READ: Iran Pushes For Diplomatic Solution As Trump Rejects Hormuz Peace Deal
Under the proposed rules, the fleet-wide average fuel-economy target would reach 34.5 miles per gallon (mpg) by 2031, compared with 50.4 mpg under the Biden-era standards. The new policy would also revise the 2022 model-year standard retroactively and increase fuel-efficiency requirements by only 0.25% to 0.5% annually through 2031, significantly slower than the previous schedule.
As per the new norm, the manufacturing cost of vehicles would be decreased in the US, which would simultaneously lower new-car prices and save families money. The Transportation Department estimates that the revised standards could reduce the average cost of a new vehicle by $930.
However, the department expects the lower standards to increase fuel use and emissions. It estimates that fuel consumption could rise by around 100 billion gallons through 2050, adding about $185 billion to fuel costs. Carbon dioxide emissions are also projected to increase by roughly 5%.
ALSO READ:Trump Rejects Iran Proposal On Hormuz As Houthis Target Riyadh
The policy shift comes as US motorists face higher petrol prices amid continuing conflicts in the Middle East. Former Transportation Secretary Pete Buttigieg criticised the rollback, arguing that weaker fuel-economy requirements could increase long-term costs for motorists and affect US competitiveness in clean-technology manufacturing.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.