Attention car buyers: For once, Washington has some good news for you.
The federal government has finalized a major change to fuel-economy rules that could make vehicles less expensive for automakers to build. The new standards are projected to produce a fleet-wide average of about 34.9 mpg by model year 2031, down from the 50.4 mpg trajectory under the previous rules.
If manufacturers now face tens of billions of dollars less in projected technology costs, I want to know what happens to those savings.
The Transportation Department estimates the change will reduce manufacturers' average cost by about $1,300 per vehicle and save Americans roughly $138 billion over five years.
Room to maneuver
But the number that jumped out at me is $60.6 billion.
That's how much the National Highway Traffic Safety Administration projects automakers' technology costs will decline through 2031 compared with the previous standards. General Motors alone accounts for an estimated $20.4 billion, followed by Stellantis at $6.6 billion, Ford at $5.8 billion, Toyota at $4.5 billion, and Honda at $4.1 billion.
Those aren't small numbers. Change the economics of building a car that much, and eventually I want to see the difference on the showroom floor.
For years, increasingly aggressive fuel-economy requirements pushed automakers toward additional fuel-saving technology and complicated compliance strategies. Electric vehicles were one way of improving fleet averages, and product planning increasingly had to account for what Washington demanded as well as what customers wanted.
Meanwhile, buying a new vehicle has become painfully expensive. The average new-vehicle transaction price hit $50,089 in August, according to Kelley Blue Book.
Now automakers have more room to maneuver. NHTSA says its new rules give manufacturers more flexibility to build vehicles based on customer demand. The agency is also changing vehicle-classification rules beginning with the 2030 model year. Under the current system, NHTSA says manufacturers have incentives to modify vehicles so they qualify as light trucks, while hatchbacks, wagons, and other smaller vehicles are discouraged.
That's the sort of regulatory change car buyers may actually notice.
Automakers don't build vehicles simply because somebody in Washington thinks they should exist. They build them when the economics work.
California split
California has been pushing in the opposite direction. Its Advanced Clean Cars II program required manufacturers to meet increasingly stringent zero-emission-vehicle targets on the way to 100% by 2035. And California's influence doesn't stop at the state line. The Clean Air Act allows other states to adopt California's vehicle-emission standards, and several have done so.
Congress moved against those rules last year. On June 12, 2025, President Trump signed H.J. Res. 88 into law, disapproving the EPA waiver that allowed California to enforce Advanced Clean Cars II.
California immediately sued, arguing that Congress had improperly used the Congressional Review Act to overturn a Clean Air Act waiver. That legal fight has continued, so the underlying dispute over California's authority isn't finished.
For car buyers, though, the direction of federal policy has plainly changed. Manufacturers have substantially more freedom under the new federal fuel-economy rules to decide which powertrains they want to sell.
My position on that hasn't changed. If you want an EV, buy one. If a hybrid works better for you, buy that. If you need a gasoline-powered SUV or pickup, you should be able to buy that too.
Let the cars compete.
RELATED: Welcome to the new traffic stop, where it's your word against AI's
No free pass
But I'm not giving automakers a free pass. If manufacturers now face tens of billions of dollars less in projected technology costs, I want to know what happens to those savings. I'm not expecting $1,300 to disappear overnight from every window sticker. Automakers still have factories, employees, suppliers, research and development, and shareholders.
But don't tell us deregulation makes cars cheaper to build and then expect consumers not to look for the evidence.
Give us better prices. Give us more equipment. Bring back vehicles that didn't make financial sense under the old rules. Build the smaller cars, hatchbacks, wagons, pickups, and SUVs people will actually buy.
And let competition sort out the rest.
There is a cost on the other side of the ledger. NHTSA projects that the less stringent standards will increase fuel costs by more than $1,600 over the life of a vehicle compared with the rules they replace. The agency also projects 4.6% more gasoline consumption through 2050.
That's worth considering, especially if you drive a lot of miles or own a large truck or SUV.
Gas prices are high right now too. But today's pump price isn't necessarily tomorrow's. Oil production changes. Markets change. Wars end and new ones begin. We're going to dig into where gasoline prices are headed in a future article because that deserves its own investigation.
Right now, I'm interested in something easier to measure. Will cheaper compliance actually mean cheaper cars?
Automakers now face tens of billions less in projected technology costs. If that really gives them more freedom to build what customers want, eventually the person walking into the dealership ought to see it.
The rules changed. Now show us the cars — and the savings.
Continue reading...
[H/T Blaze Media]
