New CAFE Standards: Biden Saves Billions, Softened Rules Explained


The Department of Transportation has finalized new Corporate Average Fuel Economy (CAFE) standards that will increase fuel economy for vehicles, saving Americans $23 billion in fuel costs. The standards aim for a 2% annual increase in fuel economy, reaching an average of 50.4 miles per gallon by 2031. Heavy-duty vehicles will see larger increases, with a target of 35 mpg by 2035. These rules are softer than initially proposed, but still expected to save car owners $600-700 over the vehicle’s lifetime, reduce carbon emissions by 710 million tons, and save 70 billion gallons of gas by 2050.

Why does it matter?

While the new CAFE standards fall short of the original proposal of 55.7 mpg, they are aligned with the EPA’s emissions rules to collectively cut fuel and health costs. The rules provide automakers flexibility in meeting higher standards, encouraging the production of more electric vehicles (EVs). The reduced “extra credit” for EVs will push automakers towards offering a higher share of EVs. The rules are designed to combat pollution and reduce fuel costs, despite being softer than initially suggested to accommodate automaker lobbying.

How is it going to shape the future?

The complementary EPA and CAFE rules set the stage for a transition towards cleaner transport by incentivizing automakers to increase their share of EVs. Environmental and health groups have shown support, albeit with criticism that the rules don’t go far enough. Automakers, through the Alliance for Automotive Innovation, have welcomed the changes, emphasizing the need for harmonized government regulations. The administration’s broader EV initiatives include incentives for EV purchases, charger installations, and domestic manufacturing, alongside infrastructure plans for electrifying freight routes by 2040.

In conclusion, while these CAFE standards mark progress towards a more sustainable future, there is still a need for stronger regulations to accelerate the transition to electric vehicles and mitigate the impacts of climate change. The push towards cleaner transport is necessary to meet environmental needs and consumer demands, emphasizing the urgency for quicker electrification of the transportation sector. The debate around achieving more ambitious standards continues, highlighting the importance of ongoing efforts to safeguard the planet and public health.