On March 31, 2020, the Trump administration released its final rule on new fuel emissions standards that will promote more affordable, cleaner, and safer cars for American drivers.

In 2012, the National Highway Traffic Safety Administration (NHTSA) established strict passenger car and light truck Corporate Average Fuel Economy (CAFE) and CO2 emissions standards for vehicles in model years (MYs) 2017-2021. Under the 2012 rule, emission standards would increase by 5 percent each year for all new vehicles.  This decision hampered the ability of the auto industry to produce new vehicles that were less expensive, better for the environment, and safer for passengers. This forced consumers to turn away from buying updated models. The average age of a car on the road in the U.S. is 11.8 years old.

On April 2, 2018, the Environmental Protection Agency (EPA) issued an evaluation that the 2012 emissions standards were outdated and should be revised.  Working alongside other federal agencies in its evaluation, more than 750,000 public comments were analyzed and three public meetings were held.  Based on this review, it was determined that the 2012 rule did not reflect the realities of the automobile market. 

NHTSA and the EPA’s new decision, the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule, provides a much needed modernization of the 2012 rule.  Instead of an annual increase of 5 percent for the stringency of CAFE and CO2 standards, the SAFE Vehicles Rule lowers the increase to 1.5 percent each MY from 2021-2026.

As a result, regulatory costs for the auto industry will be reduced by as much as $100 billion by MY 2029.  The rule also is projected to drop the average required fuel economy to 40.4 miles per gallon (mpg), compared to 46.7 mpg under the old rule.  The SAFE Vehicle Rule is the largest slashing of red tape during the Trump Administration.

On the cost side, NHTSA and the EPA project that the SAFE Vehicle Rule will save the average family $3,500 on vehicle purchases.  Such a dramatic price decrease could boost car sales by up to 2.7 million by MY 2029. Regarding safety, newer cars with updated technology will reduce fatal crashes by 3,300, injuries by 397,000, and vehicles damaged in accidents by more than 1.8 million.  

While decreasing costs and increasing safety, the rule keeps intact pollution standards under the Clean Air Act to protect the environment.  Making new car purchases more accessible also means consumers can retire older cars that do not have the environmentally sound capabilities of newer models.

Secretary of Transportation Elaine Chao lauded the SAFE Vehicle Rule as a massive win for consumers:  “This rule reflects the Department's #1 priority-safety-by making newer, safer, cleaner vehicles more accessible for Americans.”  EPA Administrator Andrew Wheeler also praised the rule as a “sensible national program that strikes the right regulatory balance that protects our environment, and sets reasonable targets for the auto industry.”

The Trump administration has made historic regulatory cuts that have boosted competitiveness, removed bureaucratic burdens from small business, and lowered costs for consumers.  The SAFE Vehicle Rule is certainly another step in the right direction for taxpayers, especially in a time of great fiscal uncertainty.