President Donald Trump this week announced a rollback of fuel economy standards for cars, undoing one of President Joe Biden’s signature climate policies.
The proposal would weaken emissions regulations for cars and light trucks that would otherwise encourage carmakers to produce more electric vehicles.
As President Trump sees it, environmental regulations that attempt to improve efficiency and address climate change only make products more expensive and make them perform worse. The White House said the Biden-era regulations would raise the cost of a new car by $1,000, and the repeal would save car owners $109 billion over the next five years.
This is just the latest example of Trump’s long-running hostility to environmental rules. He has blamed efficiency regulations for his frustrations with things like toilets and showerheads. He began his second term in office to “unleash prosperity through deregulation.”
But there’s at least one big way that American companies and households may end up paying more, not less, for the president’s anti-environment policy moves.
If you’re in the market for a vehicle, you’ve probably noticed: cars are getting more expensive. Kelley Blue Book reported that the average sticker price for a new car topped $50,000 for the first time in September.
And they aren’t just getting more expensive to buy; cars are getting more expensive to own. For most Americans, gasoline is their single-largest energy expenditure, around $2,930 per household each year on average.
While a more efficient dishwasher, light bulb, or faucet may have a higher sticker price up front — especially as manufacturers adjust to new rules — cars, appliances, solar panels, and electronics can more than pay for themselves with lower operating costs over their lifetimes. And Trump’s agenda of suddenly rolling back efficiency rules has simultaneously made it harder for many industries to do business while raising costs for ordinary Americans.
No one knows this better than the US auto industry, which has whiplashed between competing environmental regulations for over a decade.
In July, the Environmental Protection Agency began undoing a foundational legal basis that lets the agency limit climate pollution from cars. Without it, the EPA has far less power to require automakers to manufacture cleaner vehicles, which hampers efforts to reduce one of the single biggest sources of carbon emissions.
Trump’s deregulation push could cost drivers more. By weakening fuel efficiency and pollution rules, the administration is setting up consumers to spend more on gasoline and vehicle maintenance — the opposite of what Trump says he’s aiming for.
Automakers hate the whiplash. Constantly shifting climate rules — from Obama to Trump to Biden and back — have made it nearly impossible for car companies to plan, adding costs that get passed on to buyers.
Rolling back standards means locking in pricier, dirtier cars for longer. Energy analysts estimate households could spend an extra $310 billion on fuel by 2050 as efficiency progress stalls.
The US is falling behind. While Europe and China double down on electric vehicles, Trump’s policies discourage EV investment.
The big picture: Policies meant to “save money” are instead locking Americans into higher energy bills, costlier cars, and a slower transition to cleaner, cheaper technology.
Trump’s Transportation secretary, Sean P. Duffy, said in a statement over the summer that these moves “will lower vehicle costs and ensure the American people can purchase the cars they want.”
But in reality, the shift may have the opposite effect.That’s because when the rules change every few years, automakers struggle to meet existing benchmarks and can’t plan ahead. The Alliance for Automotive Innovation, a trade group representing companies like Ford, Toyota, and Volkswagen, sent a letter to the EPA in September saying that the administration’s moves and the repeal of incentives for electric cars mean that the current car pollution rules established under Biden and stretching out to 2027 “are simply not achievable.” The Trump administration responded by zeroing out any penalties for violations — but the industry is already planning for a post-Trump world where rules could drastically change yet again.
Because it takes years and billions of dollars to develop new cars that comply with stricter rules, carmakers would prefer if regulations stayed put one way or the other. Every rule change adds time and expense to the development lifecycle, which ultimately gets baked into a car’s price tag.
Changing rules are also vexing for electric car makers, whose models are gaining traction both in the US and around the world, even as the Trump administration has ended tax incentives for EVs. Trump is making things even more difficult by pulling support for domestic battery production that would help US car companies build electric cars.
It all adds up to a huge headache for the industry. “Particularly in the last six months, I think ‘chaos’ is a good word because they’re getting hit from every angle,” said David Cooke, senior associate director at the Center for Automotive Research at Ohio State University.
And all that uncertainty is making cars more expensive to buy and run, with even more expensive long-term consequences for people’s health and the environment.
How Trump’s policies are costing drivers more
As the government relaxes efficiency targets, progress will stall and car buyers will get stuck with cars that cost more to operate.
Energy Innovation, a think tank, found that repealing tailpipe standards could cost households an extra $310 billion by 2050, mainly through more spending on gasoline. Undoing the standards would also increase air pollution and shrink the job market for US electric vehicle manufacturing due to lower demand.
Even the Trump administration’s own analysis of the effects of undoing the EPA’s greenhouse gas emissions regulations found that his moves would drive up gasoline prices due to more fuel consumption from less efficient vehicles.
“Repealing these standards in particular would set America back decades,” said Sara Baldwin, senior director for electrification at Energy Innovation.
While the Trump administration shifts gears, other countries are racing ahead. Automakers can design electric cars faster than conventional internal combustion-powered vehicles, since EVs generally have fewer components, and manufacturers don’t have to worry about designing pollution controls to meet tightening restrictions. Since EVs are mechanically simpler, they also need less maintenance. Conventional cars, by contrast, typically take around five years to go from the drawing board to dealer lots, so the gasoline-powered cars being designed now won’t come out until 2030 — when someone else will be in the White House.
The US auto industry also serves other countries. Markets like Europe are holding fast to their environmental regulations and are looking to ban the sales of internal combustion vehicles altogether. Meanwhile, China is making some of the cheapest and most popular EVs in the world.
That’s why some American carmakers are setting their sights beyond US shores and are continuing to bet on more EVs. Earlier this year, Ford announced that it was developing a $30,000 electric pickup truck for the US and for export, a sign the company sees huge potential in cheap electric cars despite the Trump administration’s efforts to pump the brakes on electrics.
Though car companies often grumble about the expenses and effort they have to expend when environmental regulations become stricter, regulatory uncertainty continues to be a much bigger nuisance. “These changes in regulations are really disruptive to the industry and are hurting our global economic competitiveness,” said Gregory Keoleian, co-director of the Center for Sustainable Systems at the University of Michigan. “It’s not only hurting in terms of setting us back with regard to decarbonization of the transportation sector, but the cost to consumers in the United States.”
Update, December 4, 10:15 am ET: This story has been updated to include President Donald Trump’s repeal of federal fuel efficiency requirements for tens of millions of new cars and light trucks.
