The Road Just Changed
The all-electric future once seemed inevitable, but the picture changed after U.S. President Donald Trump took office in January 2025. His administration reversed several EV-friendly policies, most notably by ending the federal $7,500 EV tax credit after September 30, 2025, which contributed to a sharp slowdown in the U.S. EV market. Now, Trump is doubling down after saying on Saturday that he approved new fuel economy standards that would replace Biden-era standards.
The full details have yet to be disclosed, but for reference, the Biden-era Corporate Average Fuel Economy, or CAFE, standards were projected to require an industry fleetwide average of roughly 50.4 mpg for cars and light trucks by model year 2031, a ruling that pushed automakers toward more fuel-efficient vehicles, including hybrids and EVs. Trump called the previous policy a “ridiculous EV Mandate” in a Truth Social post and claimed that the new standards would lead to lower-priced cars while helping plants return to operation and bringing back jobs.
Ford
Gas Gets More Breathing Room
Rolling back the previous standards would give automakers more room to continue offering combustion cars without relying as heavily on hybrids and EVs. Combustion models may also be more affordable than comparable hybrid alternatives because the latter add more hardware, such as an electric motor and high-voltage battery. It is a timely development, given that the average new-car transaction price in the U.S. surpassed $50,000 in December last year. On the other hand, high fuel prices could make electrified cars more appealing.
Trump also slammed EV adoption for, according to his post, having “forced Americans into cars they never wanted” while wasting “billions on chargers that were never built.”
With the EV market in the U.S. already under pressure, EV-only brands such as Tesla, Rivian, and Lucid could experience further headwinds. It will also be interesting to see how other automakers respond, though some may have already been ahead of the shift, including Volkswagen, which ended production of the ID.4 at its plant in Chattanooga, Tennessee. Ram has already canceled the all-electric 1500 REV and introduced performance-focused alternatives, including the 1500 TRX SRT and the 1500 Rumble Bee lineup.
Jared Rosenholtz/Autoblog
Billions in the Tank
Trump also claimed that more than $100 billion is being invested in the American auto industry under his administration, adding that “that’s just the beginning.” The new fuel economy standards are expected to be finalized on Monday.
Despite the broader shift back toward combustion vehicles, some states still continue to provide incentives to encourage EV adoption. One of them is California, which offers an instant rebate of up to $3,500 on qualifying new zero-emission vehicles for first-time EV buyers, with up to $1,750 available for qualifying used models.
Jeep
