Biden Administration Adopts New Vehicle Fuel Economy Standards

On April 1, 2022, DOT updated its Corporate Average Fuel Economy (CAFE) standards, which sets fuel mileage standards for passenger cars and light trucks. These standards, implemented by DOT’s National Highway Traffic Safety Administration, further administer President Biden’s executive order to drive American leadership forward on clean cars.

The new CAFE standards apply to model years 2024 and 2026, requiring an industry-wide fuel economy average of approximately 49 miles per gallon (mpg) for passenger cars and light trucks for model year 2026. The new standards will increase fuel efficiency 8 percent annually for model years 2024 to 2025 and 10 percent for model year 2026. They will also increase the fleet average by nearly 10 mpg for model year 2026 compared to model year 2021.

CAFE standards are a product of the 1975 Energy Policy and Conservation Act enacted in the wake of the oil embargo of 1973 and 1974 with an aim to reduce US dependence on imported oil. In 2020, the Trump Administration sought to lower CAFE standards issued by the Obama Administration to require, for example, a fleet average of 40 mpg by 2026 instead of 55 mpg by 2025. The new standards are ratcheted back up near Obama Administration levels, with a new fleet average of 49 mpg by 2026.

As previously discussed in our blog, DOT’s actions come along side three other recent Biden Administration actions to strengthen vehicle emissions standards, including the US Environmental Protection Agency’s restoration of California’s Clean Air Act waivers, the administration’s recent finalization of a greenhouse gas emissions rule for cars and light trucks, and a proposal to strengthen emission standards for heavy-duty vehicles and engines starting in 2027.