Legal Battles Loom for Trump Fuel Efficiency Standards Rollback

The Trump administration’s latest proposal to reverse Biden-era fuel economy regulations has legal analysts concerned that federal energy law is being misinterpreted to undermine electric vehicle use.

The proposal, announced Dec. 3, would undo the Biden administration’s Corporate Average Fuel Economy (CAFE) standards, which regulate how far vehicles have to travel on average on a gallon of fuel. The previous standards required automakers to meet an average standard of about 50 miles per gallon by the 2031 model year, while the Trump administration plans to lower that standard to 34.5 miles per gallon in the same model year.

The move is part of President Donald Trump’s effort to roll back environmental and climate-related regulations on industries, such as carmakers, that the administration sees as burdensome to its economic goals.

The White House defended the change and argued the previous standards violated the law. However, some former agency officials and environmental advocates say there are conflicts with the Energy Policy and Conservation Act (EPCA)—possible fodder for court challenges once the proposal becomes a final rule.

The new planned standards are “on very shaky legal ground and a complete assault on electric vehicles in general and EV companies in particular,” Ann Carlson, former acting administrator of the National Highway Traffic Safety Administration (NHTSA), wrote in a blog post for the Legal Planet. The blog is associated with University of California Berkeley and Los Angeles law schools.

One of the major presented changes involves restricting how electric vehicles are considered in the standards calculations. Specifically, there’s disagreement over what the EPCA says about calculating the baseline, which “models the world as it exists in the absence of CAFE standards,” Carlson wrote.

“When you’re looking at what cars can do now, it makes sense to put those cars in the baseline,” said David Pettit, senior attorney at the Center for Biological Diversity, referring to electric vehicles.

“What NHTSA doesn’t say, but what is obvious from their hypothetical, is that without the EV in the baseline, the baseline would be 30 mpg and so small percentage increases would be easier to meet—especially of ZE vehicles’ mileage is counted in future years,” he said, referring to zero-emission vehicles.

The EPCA is a law that authorizes energy conservation programs and efficiency standards for products such as appliances and vehicles, and NHTSA is in charge of establishing fuel economy standards under the law.

The agency claimed in the proposal that it’s “consistent with law” to exclude battery-powered electric vehicles and vehicles that use plug-in hybrid electric power in baseline calculations.

That echoes the agency’s June interpretive rule, which was challenged in federal appeals court by a coalition of states led by California as well as the Center for Biological Diversity and other environmental groups.

Industry advocacy group American Fuel & Petrochemical Manufacturers threw its support behind the latest proposal, saying the shift will better comply with the EPCA.

“Past administrations used CAFE standards as a back door mechanism to force electric vehicle adoption—a clear and unlawful misuse of the program,” said AFPM President and CEO Chet Thompson in a statement.

“We’re optimistic this proposal aligns with EPCA’s directive for standards to be ambitious yet feasible for internal combustion engine vehicles,” he said.

Legal Landscape

Other legal issues surrounding the new proposal revolve around timing, since the rule would affect passenger cars and other light-duty vehicles for model years 2022 to 2031.

That doesn’t work, because “the statute under which NHTSA operates requires the agency to provide 18 months lead time before the beginning of a model year for a standard to take effect,” Carlson wrote.

“Similarly, the governing statute authorizes NHTSA to set standards for at least 1 but not more than 5 model years,” she said, adding the agency shouldn’t get deference under the US Supreme Court’s Loper Bright decision.

EPCA’s ambiguous language will add to the deference issue.

“This statute says you have to do the maximum feasible mileage—so it’s not a numerical requirement, but it’s a qualitative requirement,” said Pettit.

There are other ways the new proposal allegedly contradicts federal law.

The Energy Independence and Security Act of 2007 “mandated the light-duty fleet reach 35 miles per gallon by 2020,” said Rachel Aland, transportation director at the American Council for an Energy-Efficient Economy. “Trump’s proposed requirements nearly twenty years later, at 34.5 miles per gallon by 2031, are below the efficiency of what today’s fleet currently achieves.”

Previous administrations’ changes to CAFE standards provoked litigation, making future lawsuits likely.

Environmental groups sued NHTSA in 2020 for amended carbon dioxide and fuel economy standards. A cluster of Republican-led states and business groups in 2024 similarly challenged former President Joe Biden’s more stringent final rule saying light-duty vehicles had to meet an average of 50.4 miles per gallon in 2031.

Ties to Emissions

The incentive to follow CAFE standards and reduce emissions has been slowly eroded during both Trump administrations.

The reconciliation law signed in July eliminated civil penalties for violating CAFE standards for passenger cars and other light-duty vehicles.

Before then, the penalties NHTSA set in 2024 were $17 per vehicle for each tenth of a mile per gallon that a manufacturer’s average fuel economy fell below the requirements.

“These standards represent the lowest level of required improvement since federal fuel-economy standards began in 1975, even as automakers have more proven technologies at their disposal than ever,” Aland said.

Car efficiency also impacts the quality of the environment and costs to consumers.

“This move has implications in terms of climate change,” said Pettit. “If we burn more gas to get the same distance, that’s more GHG emissions in the atmosphere, and that’s not going to be good,” he said, referring to greenhouse gasses.

“Loosening these requirements means not only that Americans will be paying more to drive, but also they weaken the global competitiveness of US automakers by reducing the need to innovate,” Aland said.