The Trump administration on Wednesdayproposed 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 industryleaders, 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 werereally not economy," Trump said. "They were really, they were
anti-economy."
Under the Biden-era rules, carmakers wouldhave 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 willresult in lower car prices.
"Rolling back fuel-efficiency ruleswon't suddenly make cars cheaper," said Patrick De Haan, head of petroleum analysis at GasBuddy.
"Automakers already paid for thetechnology 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.
Public Citizen, a left-leaning consumergroup, 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 theybecome 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 SUVsand 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 eventby 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. Saefongcontributed.