The newly confirmed head of the US Department of Transportation (DOT), Sean Duffy, has ordered the National Highway Traffic Safety Administration (NHTSA) to reset the Corporate Average Fuel Economy (CAFE) standards for automakers. The DOT said in a statement that the new standards will lower the price of new cars for consumers while eliminating a proposed electric vehicle mandate.
“The memorandum signed today specifically reduces the burdensome and overly restrictive fuel standards that have needlessly driven up the cost of a car in order to push a radical Green New Deal agenda,” Duffy said in a statement. “The American people should not be forced to sacrifice choice and affordability when purchasing a new car.”
In June 2024, NHTSA confirmed new CAFE standards that it first announced in 2023, which would have required an industry-wide fleet average of 50.4 miles per gallon for 2031 model-year passenger cars and light trucks. In 2018, Trump, in his first term as president, suggested maintaining the then-existing mandate of 37 mpg through 2026. It’s unclear what the new target will be, or if there will be one at all.
Duffy’s new directive for NHTSA comes from US President Donald Trump’s recent executive order, Unleashing American Energy (EO 14154). It states that energy regulations should be “grounded in clearly applicable law.” It also dictates eliminating the EV mandate proposed under former President Joe Biden, promoting choice, and canceling subsidies that “favor EVs.” According to a 2023 letter from US Senator Sheldon Whitehouse, the US Senate Committee on Budget chairman, the US annually spends $646 billion in fossil fuel subsidies.
The DOT cited data from Cox Automotive that shows the average transaction price for new cars has increased since March 2021, rising from $40,881 to $47,218 in early 2024, which the department blames on regulatory costs.
For reference, a new 2025 Toyota Prius today costs $29,485 to start and returns 57 miles per gallon combined. In 2005, the Prius got 46 mpg while starting at $21,275, which, when adjusted for inflation using the US Bureau of Labor Statistics’s inflation calculator, would equate to just over $35,000 today.
In 1995, the Mazda MX-5 Miata had a 23-mpg combined rating with a $17,895 starting price, which would be about $29,700 today. The 2025 Miata returns 29 mpg combined and starts at $29,330, with destination.
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