On April 1st, the U.S Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) announced the new fuel economy standard for 2026, which undid the standards enacted under the Trump administration. This new standard will make vehicles more fuel-efficient, decrease oil consumption, decrease the impact fluctuating oil markets have on consumer wallets, and reduce transportation emissions.
The current standard under the Trump administration required the fleet of new vehicles to get over 24 miles per gallon (mpg). Last week the Biden administration announced the new Corporate Average Fuel Economy (CAFE) standard, requiring an industry-wide fleet to average 49 mpg. That’s a yearly increase of 8% for new models produced in 2024 and 2025 and a 10% increase in models produced in 2026. This increased fuel efficiency will save consumers money at the pumps. Americans purchasing new cars in 2026, will save 33% more miles per gallon as compared to 2021 vehicles. The current CAFE standard in 2021 was 40 mpg and by 2026 the fleetwide average will be 55 mpg.
The CAFE rules can be confusing because this doesn’t mean each vehicle must average 49 mpg in 2026. There are different formulas for cars and trucks that involve a vehicle’s wheelbase and track dimensions that separate requirements for each vehicle. The reason for these rules is to ensure companies that rely heavily on the production of trucks aren’t held to the same standard as companies that produce smaller vehicles.
This new vehicle standard should save American families hundreds of dollars per year and make our country less vulnerable to global shifts in the price of oil. This will protect our communities by reducing approximately 2.5 billion metric tons of carbon emissions by reducing the consumption of new vehicles by more than 220 billion gallons over their lifetime.
With fuel prices at an all-time high due to post-pandemic product shortages and a ban on Russian imports of crude due to the invasion of Ukraine. Oil prices will be very unpredictable for the proceed able future, and an increase in miles per gallon will lessen the impact on consumers. Will the increase in vehicle cost offset the discount in mpg on the newer vehicles? Only time will tell.