President Trump has announced plans to significantly roll back federal fuel-economy standards to levels established prior to the Biden Administration.

Using the federal rulemaking process, the U.S. Department of Transportation (DOT) proposes relaxing federal fuel-economy standards for model-year (MY) ’22-’31 light-duty vehicles to 34.5 miles per gallon (mpg), down from the 50.4 miles per gallon threshold set by the Biden Administration. Under the proposed rule, the unwinding would be complete by 2031; additionally, crossovers and small SUVs would be reclassified as passenger vehicles, rather than as light trucks.

• Click here to read the White House’s fact sheet on the Reset of Corporate Average Fuel Economy (CAFE) Standards.

SEMA supports the proposed standards, which help automakers to produce vehicles that the marketplace demands. While aftermarket businesses are not subject to CAFE standards, this proposal is expected to provide automakers with the flexibility they need to produce the types of vehicles that are embraced by automotive enthusiasts and are often modified.

This policy shift follows the adoption of the “One, Big Beautiful Bill” in July, which eliminated penalties assessed to automakers that failed to meet fuel-economy targets. This represented a significant change in federal law and reflects a broader move by President Trump and congressional Republicans to provide automakers with greater flexibility to produce and sell vehicles based on consumer demands. It is also a significant move away from previous federal policies that pushed OEMs and consumers to favor electric vehicles over those with internal combustion engines.

SEMA will review the proposed CAFE regulation and provide official comments to DOT on the proposal (the comment deadline will be in mid-January).

This story was originally published on December 4, 2025.

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