By Senate Republicans are moving to eliminate the federal government’s decades-old fuel economy program, arguing that regulations originally created during the 1970s energy crisis have evolved into an expensive backdoor mandate for electric vehicles.
Senate Finance Committee Chairman Mike Crapo, R-Idaho, is preparing to introduce the Restoring Affordability in Automobile Manufacturing Act, which would repeal the Corporate Average Fuel Economy program beginning with model year 2029 vehicles, explained The Washington Free Beacon.
The legislation has five Republican cosponsors: Sens. Jim Risch of Idaho, Rick Scott of Florida, Cindy Hyde-Smith of Mississippi, Pete Ricketts of Nebraska and Alan Armstrong of Oklahoma. The American Petroleum Institute has endorsed the proposal.
CAFE standards date to the aftermath of the Arab oil embargo, when Congress sought to reduce American gasoline consumption by requiring automakers to steadily improve the average fuel economy of their fleets.
Republicans now argue that the rationale for the program has changed as domestic energy production has increased and federal regulators have increasingly used fuel economy rules to pursue climate goals.
Crapo told the Washington Free Beacon that the program no longer accomplishes what Congress originally intended.
“It hasn’t meaningfully insulated Americans from volatility in global markets,” he said. “The oil embargo has ended, but the consistent federal regulatory pressure on the auto industry has continued and increased, which is driving up the cost of automobiles, driving down the choice of options in automobiles and is not saving any dollars significantly to consumers.”
The debate intensified under the Biden administration, which finalized substantially tougher CAFE standards in 2024. Automakers argued that the targets would require manufacturers to sell significantly more electric vehicles to comply.
The Trump administration began reversing that policy after returning to office. The National Highway Traffic Safety Administration has since moved to reset the Biden-era standards, while legislation signed by President Donald Trump in July 2025 reduced the civil penalty for failing to meet CAFE requirements to zero.
Trump has described the previous requirements as “ridiculously burdensome” and “horrible.”
The new Senate bill would go further by eliminating the underlying CAFE program rather than simply reducing its requirements.
Supporters argue the change could reduce vehicle prices by eliminating compliance costs eventually passed along to consumers. Brent Gardner, chief government affairs officer at Americans for Prosperity, said the legislation would improve affordability and “ensure consumer choice remains the top driving factor for vehicle purchases.”
A 2022 Mackinac Center for Public Policy analysis cited economic research estimating that a 1-mile-per-gallon increase in CAFE requirements eventually costs consumers $24.1 billion in lost value and automakers $5.5 billion over a 10-year period. The study argued that much of the regulatory cost initially borne by manufacturers ultimately shifts to car buyers.
The affordability fight extends beyond fuel economy standards. California has also adopted energy-efficiency requirements for replacement tires that could remove a large share of currently available models from the market. Manufacturers have warned that the rules could raise upfront costs and reduce consumer choice, while supporters argue that greater efficiency will save drivers money over time.
Supporters of fuel economy standards counter that more efficient vehicles reduce gasoline consumption, save drivers money at the pump and reduce emissions. The dispute has increasingly centered on whether those benefits outweigh higher upfront vehicle and compliance costs.
The political fight also comes as the federal government is already moving away from the Biden-era approach. The Trump administration has estimated that resetting those standards will save Americans about $109 billion over five years, although that figure represents the administration’s own regulatory analysis.
Crapo and the bill’s supporters argue that repealing CAFE altogether would prevent a future administration from restoring more aggressive requirements and again using the program as what Republicans describe as a de facto electric vehicle mandate.
The sponsors hope to move the legislation while Republicans retain control of Congress. Environmental and consumer groups that support federal efficiency standards are expected to oppose the effort.
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