Economy|Automotive Industry‘Highly speculative’ that Trump’s new fuel rules will help drivers: ExpertsProposed changes weaken climate rules and waste years of investments by car makers in EVs.

San Francisco, United States – Earlier this month, United States President Donald Trump announced plans to lower fuel efficiency standards for vehicles. The proposed standards will allow cars to operate at 34.5 miles per gallon (14.7 km per litre), compared to the previous 50.4 miles per gallon (19 km per litre) established under the prior administration.

The initiative, referred to as the “Freedom Means Affordable Cars” proposal, suggests that reducing the fuel efficiency requirements could make new vehicles up to $1,000 cheaper and bolster U.S. manufacturing. However, this has raised concerns among industry experts who argue that U.S. automakers have already invested significantly in meeting the former standards. The potential savings for consumers are considered speculative.

The revised fuel efficiency measures have prompted major automakers, such as Ford Motors and General Motors, to announce significant financial impacts related to their electric vehicle (EV) production plans. Ford has reported a $19.5 billion impact, while General Motors has declared a $1.6 billion impact and announced 3,400 layoffs at EV sites.

Federal cutbacks on EV initiatives may further slow the U.S. transition to electric vehicles, currently accounting for less than 10% of the market. This is in contrast to global EV sales, which constitute 25% of all vehicles sold this year. The Trump administration has also reduced funding for EV charging infrastructure, a critical component for supporting electric vehicle adoption.

In November, Tesla, the largest EV manufacturer in the U.S., experienced a 23% drop in domestic sales compared to the previous year, following the end of a $7,500 tax credit. The reduced charging network and the expiration of tax credits could push consumers towards less fuel-efficient, petrol-powered vehicles, potentially increasing household fuel costs.

The proposed standards are part of broader measures aimed at deregulating fuel efficiency requirements. In July, penalties for non-compliance with fuel efficiency standards were eliminated, tailpipe emissions rules were relaxed, and tax credits for EVs were discontinued. The Environmental Protection Agency (EPA) is also considering repealing the Endangerment Finding, which is a science-based determination that greenhouse gases pose risks to human health and welfare.

Vehicular emissions are significant contributors to air pollution, which can cause respiratory and cardiovascular illnesses. The transportation sector is a leading source of air pollution in the U.S., according to the American Lung Association. The proposed rollback of fuel standards could exacerbate air pollution, with particularly severe effects on vulnerable populations such as children.

Market Dynamics and Global Implications

The Trump administration's proposal claims that the revised standards will result in reduced costs and higher profit margins for automakers and lower prices for consumers. However, the National Highway Traffic Safety Administration (NHTSA) projects that fuel costs for drivers could increase significantly, with U.S. consumers potentially paying up to $185 billion more through 2050.

While the proposed standards might make SUVs and other petrol-powered vehicles more appealing in the U.S., they could create challenges for American automakers in global markets, which are increasingly focusing on higher fuel efficiency and electric vehicles. Compliance with differing international regulations may become necessary.

China, now the largest car manufacturer and exporter, is particularly known for its electric vehicles. There is concern that U.S. automakers could be disadvantaged if they do not align with global trends towards electrification.

Based on reporting by Al Jazeera.