By Kimberly Hayek
A major auto industry group has thrown its support behind the Trump administration in a lawsuit brought by California, New York, and roughly two dozen other states, cities, and counties that seeks to block the administration’s sharply lower vehicle fuel-economy standards.
The Alliance for Automotive Innovation filed a brief Monday in the First U.S. Circuit Court of Appeals in Boston, arguing that automakers need predictable rules. The group said overturning the standards finalized last month would disrupt capital planning, product development, and testing for hundreds of models aimed at the U.S. market.
The National Highway Traffic Safety Administration (NHTSA) issued the updated Corporate Average Fuel Economy rules, published in the Federal Register on Sept. 30. The revised targets call for an industry-wide average of about 34.9 miles per gallon by the 2031 model year, a sharp drop from the 50.4 mpg level set under the Biden administration in 2024. Under the new framework, passenger-car and light-truck fleets must generally become up to 1 percent more efficient each year, rising from a 2024 baseline of 30.1 mpg.
NHTSA projects the change will cut the average price of a new vehicle by roughly $1,300 and save U.S. consumers about $138 billion over five years.
Transportation Secretary Sean Duffy described the move as relief for families and a boost to domestic manufacturing. The agency’s analysis also estimates the weaker standards will increase U.S. gasoline consumption by about 4.6 percent, or roughly 121 billion gallons, through 2050 compared with the Biden-era rules.
Alliance CEO John Bozzella said the prior standards effectively demanded a rapid shift to electric vehicles that did not match market conditions or buyer demand, calling the new rule a necessary adjustment.
“What the industry needs is long-term regulatory stability that includes balanced, durable and achievable fuel economy standards that continue to reduce emissions and improve fuel economy,“ he said. ”As we’ve said before: This is the formula for preserving consumer vehicle choice and keeping the U.S. auto industry globally competitive.”
Environmental advocates disagreed. A separate lawsuit filed in October by the Sierra Club and other groups argues that the new standards will raise fuel costs for drivers and increase pollution.
President Donald Trump had publicly endorsed the weaker standards on Sept. 26, criticizing the Democratic policies for burdening manufacturers, pushing unwanted vehicles on consumers, and wasting money on charging infrastructure. He said the change would remove regulatory costs and encourage production in the United States.
In December 2025, Trump signed an executive order ending the Biden-era fuel standards, which it said would make new cars less expensive and produce roughly $109 billion in total savings. Ford CEO Jim Farley at the time called the step a win for affordability that would allow more investment in U.S.-built vehicles.
Separately, the federal electric-vehicle tax credit of up to $7,500 ended for vehicles acquired after Sept. 30, 2025. Congress also eliminated civil penalties for missing certain Corporate Average Fuel Economy targets and, in June 2025, rescinded waivers that had let California impose stricter emissions rules.
Reuters contributed to this report.
