On January 29, 2025, U.S. Transportation Secretary Sean Duffy signed an order directing the National Highway Traffic Safety Administration (NHTSA) to repeal the Biden administration’s vehicle fuel economy standards. These standards aimed to increase Corporate Average Fuel Economy (CAFE) requirements to 50.4 miles per gallon by 2031, up from the current 39.1 mpg for light-duty vehicles. Duffy argues that such stringent standards impose costs that make vehicles unaffordable for average Americans and pressure automakers to phase out popular internal combustion engine models.
This economy standards move aligns with ongoing efforts by the Trump administration to roll back initiatives promoting electric vehicles. The Environmental Protection Agency also plans to reconsider vehicle emissions rules and California’s waiver to ban sales of gas-only vehicles by 2035.
Duffy, a former Wisconsin Representative and Fox Business News host, was nominated by President Donald Trump in November 2024 and confirmed as Transportation Secretary. He oversees a $110 billion budget, including significant funding from the 2021 infrastructure law and electric vehicle charging stations. His priorities include reversing stringent vehicle emissions regulations and addressing various transportation issues, such as high traffic fatalities and the regulation of self-driving cars.
The Biden administration’s CAFE standards were projected to reduce gasoline consumption by 64 billion gallons and cut emissions by 659 million metric tons.
How does it impact on trucking industry?
This could have several significant impacts on the trucking industry, including costs, fuel efficiency requirements, and long-term industry trends.
Lower Compliance Costs for Trucking Companies
If the NHTSA revises or weakens fuel economy standards, trucking companies may benefit from lower compliance costs. Stricter fuel efficiency regulations often require manufacturers to invest in costly new technologies, which are then passed on to fleet operators. A rollback could reduce pressure on trucking companies to purchase expensive fuel-efficient vehicles.
Reduced Incentive for Electrification
Under previous regulations, truck manufacturers were moving towards more fuel-efficient and electric or hybrid trucks. If these standards are relaxed, the adoption of electric trucks may slow down, as there would be less regulatory pressure pushing for their implementation. This could also impact investments in charging infrastructure for electric commercial vehicles.
Impact on Fuel Prices and Consumption
Less stringent fuel economy standards may increase fuel consumption, as there would be fewer incentives for automakers to improve efficiency. Higher fuel demand could raise diesel prices, which directly affects trucking costs. However, if fuel prices remain stable, operators of diesel trucks may find it cheaper to maintain existing fleets rather than invest in newer, fuel-efficient models.
Uncertainty in Long-Term Investment Plans
Frequent changes in fuel economy rules create uncertainty for trucking companies when making long-term investments in vehicle fleets. If the rules keep shifting with different administrations, it becomes harder for businesses to decide whether to upgrade fleets, invest in alternative fuels, or stick with traditional diesel trucks.
Potential Pushback from States and Shippers
Some states, particularly California and New York, have their own fuel economy and emissions regulations that could counteract federal rollbacks. Additionally, large shippers like Amazon, Walmart, and FedEx, which have made commitments to carbon neutrality, may continue demanding more fuel-efficient or electric trucks from their transportation partners.
The trucking industry stands to benefit from lower upfront costs and regulatory relief, but this may come at the expense of higher fuel consumption, increased long-term uncertainty, and a slower shift toward electrification.
Duffy’s directive signals a significant shift in U.S. transportation policy, emphasizing affordability and consumer choice over stringent fuel economy regulations. As the NHTSA reconsiders these standards, the balance between environmental concerns and economic factors will remain a focal point in the ongoing debate over the nation’s transportation policies.
