Automakers’ Alliance Backs Easing U.S. Fuel Standards as 26 Entities Challenge Rule
Key Facts
The Alliance for Automotive Innovation, which includes major companies such as General Motors, Toyota and Volkswagen, backed President Donald Trump’s administration in a legal challenge over reduced vehicle fuel-efficiency standards, Reuters reported on November 2, 2026. The alliance took its position in opposition to a lawsuit filed by California and others challenging the new rule. The alliance also represents companies including Hyundai, Ford and Stellantis, placing a broad swath of manufacturers on the administration’s side before the court. The case centers on the administration’s authority to lower efficiency requirements and whether the new standards meet the regulator’s statutory mandate. At the same time, government estimates set out a trade-off between lower compliance costs for companies and higher fuel consumption borne by drivers.
The revised rule projects average fleet efficiency of 34.9 miles per gallon in model year 2031, compared with 50.4 miles per gallon under a rule adopted in 2024, Reuters reported. The Transportation Department says the projected average of 34.9 miles per gallon in 2031 will be above the 30.1 miles per gallon recorded for model year 2024. The comparison highlights different baselines: the first figure compares the new rule with the previous standard, while the department’s estimate places projected efficiency alongside the fleet’s performance in 2024. The department says the revision cuts manufacturers’ average compliance costs by $1,289 per vehicle. But it estimates fuel costs will rise by more than $1,600 per vehicle over its lifetime, exceeding the estimated regulatory savings for manufacturers when lifetime fuel costs are considered.
The Transportation Department estimates the revision will increase U.S. gasoline consumption through 2050 by 4.6%, or about 121 billion gallons, compared with the previous rules. The department also presents the rule as a measure to reduce the cost of buying cars, saying it will lower the average price of a new car by $1,300 and save Americans $138 billion over the next five years. But experts cited by the Associated Press said easing fuel-efficiency requirements does not necessarily lower vehicle prices or automatically increase sales of new cars. These estimates reflect different measurement perspectives: the savings highlighted by the department concern purchase and compliance costs, while the fuel estimates include operating costs over a vehicle’s lifetime. The projected increase in gasoline consumption remains part of the rule’s economic impact calculations, alongside the stated savings on new-car costs.
The Alliance for Automotive Innovation said in its brief before the U.S. Court of Appeals for the First Circuit that automakers need stable standards and that striking down the rule could harm investment planning, product development and performance validation for hundreds of new models intended for the U.S. market. The alliance added that repealing the standards would put these activities at risk, noting that manufacturing and model-development decisions depend on clear regulatory requirements. Meanwhile, California Attorney General Rob Bonta filed a lawsuit on October 2 on behalf of a coalition of 26 states, counties and cities. The coalition says the National Highway Traffic Safety Administration violated Congress’s mandate to set standards at the “maximum feasible” level and misinterpreted its legal authority. California says the new standards for the next five years require less efficiency than the U.S. fleet actually achieved in 2021; this is the plaintiffs’ argument, not a court ruling.
The final rule takes effect on November 30, 2026, and includes revisions to fuel-efficiency standards for light vehicles for model years 2022–2026 and 2027–2031, according to the Federal Register. The National Highway Traffic Safety Administration also plans to end the trading of compliance credits among companies starting with model year 2028, then change fleet-classification rules from model year 2030. According to the Transportation Department, the classification change shifts the fleet mix from about 70% light trucks and 30% passenger vehicles to about 70% passenger cars and 30% light trucks. Department officials say this change will reshape how efficiency requirements are calculated by vehicle category. In the November 2 session, Toyota closed at $195.83 per share, while EL7 data showed Volkswagen closing at $7.7 per share; these prices alone do not indicate the lawsuit’s or rule’s impact.