U.S. tightens vehicle fuel economy standards for MY 2024-2026

The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) announced new, landmark fuel economy standards  last Friday that will require automakers to boost fuel efficiency by 8% annually for model years 2024-2025 and 10% annually for model year 2026. They will also increase the estimated fleetwide average by nearly 10 miles per gallon (mpg) or 4.2 kilometer per liter (kpl) for model year 2026, relative to model year 2021.

The new Corporate Average Fuel Economy or CAFE standards require an industry-wide fleet average of approximately 49 mpg (20.8 ppl) for passenger cars and light trucks in model year 2026, the strongest cost savings and fuel efficiency standards to date. 

The new CAFE standards for model year 2024-26 will reduce fuel use by more than 200 billion gallons through 2050, as compared to continuing under the old standards, the agency said.

In 2020, the Trump administration rolled back what the previous administration of President Barack Obama had put in place, from a neary 5% annual increase between model years 2021 and 2026, to 1.5% per year.

In January 2021, soon after his inauguration, President Joseph Biden signed an executive order entitled, “Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis.” In it, Biden directed a review of Trump’s “Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks.” He set a deadline of July 2021 to come up with a new proposal.

Because of the executive order, the NHTSA, which is required by Federal law to set fuel economy standards at the maximum feasible level for both passenger cars and light trucks, for every model year, reexamined the 2020 final rule.

Under the SAFE Rule, the projected overall industry average required fuel economy in MYs 2021-2026 is 40.4 mpg, compared to 46.7 mpg projected requirement in MY 2025 under the 2012 standards.

The agency pointed out that since the corporate average fuel economy standard was signed into law in 1975, it has reduced American oil consumption by 25%, or approximately 5 million barrels a day since then. 

The agency also said that Americans purchasing new vehicles in 2026 will get 33% more miles per gallon as compared to 2021 vehicles. This means new car drivers in 2026 will only have to fill up their tanks three times as compared to every four times that new car drivers today do for the same trips.

“Today’s rule means that American families will be able to drive further before they have to fill up, saving hundreds of dollars per year,” said U.S. Transportation Secretary Pete Buttigieg. “These improvements will also make our country less vulnerable to global shifts in the price of oil, and protect communities by reducing carbon emissions by 2.5 billion metric tons.”

The new standards will also reduce greenhouse gas emissions and air pollution.

“NHTSA is helping American families by making life more affordable—and the air cleaner for their children. These vehicles will be better for the environment, safer than ever, and cost less to fuel over their lifetimes. We are proud to fulfill President Biden’s mission to move us to a more sustainable future, one that strengthens American energy independence and helps put more money in American families’ pockets,” said Dr. Steven Cliff, NHTSA deputy administrator.

The announcement of new standards comes as the automobile industry is retooling production for future models in response to rapidly growing market demand for cleaner, more fuel-efficient vehicles. Nearly all auto manufacturers have announced new electric vehicle models. 

More robust fuel economy standards will encourage the industry to continue improving the fuel economy of cars powered by internal combustion engines as the transportation sector transitions to electrification, the agency said.

For the final Corporate Average Fuel Economy rule, click here.