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Trump Administration Plans to Roll Back Biden's Fuel-Efficiency Standards

President-elect Donald Trump's incoming administration plans to weaken federal regulations on fuel efficiency and tailpipe emissions set by the Biden administration, according to sources familiar with the transition team. The proposed rollback targets rules designed to promote electric vehicles (EVs) and reduce greenhouse gas emissions from automobiles, fulfilling Trump's campaign pledge to "end the EV mandate."

Key Aspects of Biden's Regulations

  • The Biden administration's standards require automakers to achieve significant reductions in emissions by 2032, effectively encouraging a shift to at least 35% EV production.
  • These rules aim to phase out fossil fuel-powered vehicles over time.

Proposed Changes Under Trump

  • A review of the Biden-era regulations will be initiated, with the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) tasked with drafting less stringent rules.
  • The administration also plans to eliminate the $7,500 federal tax credit for EV purchases, a measure intended to accelerate the transition to electric vehicles.

Impact on Automakers and EV Adoption

  • Traditional automakers have long argued that stricter fuel-efficiency standards are too costly and challenging to meet. While they previously lobbied for looser regulations under the first Trump administration, their investments in EV technology have since increased, changing the industry's outlook.
  • Tesla, which has benefited significantly from regulatory credits sold to automakers unable to meet emissions targets, may see reduced revenue from these credits if the standards are weakened. However, analysts suggest Tesla's profitability no longer relies heavily on credit sales.

Political and Economic Implications

  • Weakening fuel-efficiency standards could delay the U.S. transition to EVs, potentially impacting the country's progress on climate goals and competitiveness in the global EV market.
  • The rollback could benefit automakers seeking flexibility but risks criticism from environmental groups and clean energy advocates.

Challenges Ahead

Undoing federal regulations is a lengthy process, as seen during Trump's first term, when it took nearly three years to revise Obama-era fuel-efficiency rules. Additionally, automakers are already adapting to stricter standards in states like California and international markets, where EV mandates remain robust.

The proposed changes signal a significant shift in U.S. environmental and automotive policy, with potential repercussions for the country's climate agenda and its position in the global transition toward sustainable transportation.