Trump Slashes US Vehicle Fuel Economy Standards to 34.5 MPG by 2031, Cutting New Car Prices by $930

The U.S. Transportation Department will finalize sharply reduced vehicle fuel economy standards on Monday, September 28, 2026, lowering the 2031 fleet average to 34.5 miles per gallon — far below the Biden administration's 50.4 mpg target. President Trump said the move will cut new car prices. The rule retroactively lowers standards for 2022 model-year vehicles and raises requirements by just 0.25% to 0.5% annually through 2031. The Transportation Department estimates the change cuts the average new vehicle price by $930. However, the agency projects the lower standards will add roughly 100 billion gallons of fuel consumption and $185 billion in fuel costs through 2050, while increasing carbon dioxide emissions by about 5%. The policy reversal comes as U.S. drivers face rising pump prices following the U.S.-Israel war with Iran that began in late February 2026.