U.S. President Trump. EPA Yonhap News

U.S. President Donald Trump has decided to relax automotive fuel efficiency regulations that were strengthened under the previous Biden administration.

The regulation announced by President Trump on the 3rd (local time) aims to lower the Corporate Average Fuel Economy (CAFE) standard, the minimum fuel efficiency that automakers must meet, to 34.5 miles per gallon for model year 2031, down from the previous 50 miles per gallon.

CAFE measures the average fuel economy of all vehicles sold by a manufacturer, and it is advantageous to sell more electric vehicles, which have higher fuel efficiency than internal combustion engine vehicles, to exceed this standard.

This is because even if a company sells many vehicles that lower average fuel economy, such as pickup trucks or SUVs, it can offset that impact by selling enough high-fuel-efficiency electric vehicles.

For this reason, CAFE has served as an incentive for automakers to improve the fuel efficiency of internal combustion engine vehicles and expand the production of hybrid and electric vehicles.

The previous Biden administration, which prioritized responding to climate change and adopted an eco-friendly stance, strengthened fuel efficiency and emissions regulations to encourage the adoption of electric vehicles.

However, companies like General Motors (GM) and Stellantis, which have focused on selling large vehicles with lower fuel efficiency, have requested a relaxation of fuel efficiency regulations.

These companies have paid fines for failing to comply with CAFE standards, but the "One Big Beautiful Bill" enacted by Congress in July under President Trump's initiative included the repeal of these fines.

It is interpreted that President Trump, facing political pressure due to recent high inflation, has calculated that relaxing fuel efficiency standards will allow automakers to spend less on related technologies, thereby lowering car prices.

President Trump said at a White House event on the same day, "These (Biden's) policies have caused automakers to build cars using expensive technology, increasing costs and prices, and making cars much worse. With this measure, we expect the average consumer to save at least $1,000 (approximately 1.46 million won) on the price of a new car."

President Trump prefers internal combustion engine vehicles and has not expressed support for so-called eco-friendly vehicles such as electric or hydrogen cars.

This relaxation of fuel efficiency standards could disadvantage companies like Toyota, which have invested in fuel efficiency improvement technologies, and Tesla, which only sells electric vehicles.

The New York Times (NYT) pointed out in an online article on the same day, "The federal government has leaned towards internal combustion engine vehicles instead of electric vehicles," adding, "This removes one of America's most significant efforts related to climate change and plunges the automotive industry into greater uncertainty."

President Trump also criticized the Biden administration's "Green New Deal" policies, including the strengthening of automotive fuel efficiency regulations, as "Green New Scam," "anti-economic policy," and "brainwashing people," stating, "This is an effort to eliminate gasoline cars."

He further emphasized, "People have been paying too much for cars that don't even work properly. Now they will have great cars that are environmentally friendly, much cheaper, and work well. All the nonsense is being removed from cars."

President Trump specifically mentioned his trip to Asian countries, including Malaysia, Japan, and South Korea, in October, saying, "When I visit these countries, there are very small cars, like Volkswagen Beetles (known as the 'Beetle'), very small and cute cars."

He continued, "So I thought, 'How would these cars do in our country?' and everyone thought it would be okay, but they can't actually be made in America. I instructed (Transportation Secretary) Sean Duffy to approve the production of these cars immediately, and you will be able to buy them."

In response, Secretary Duffy said that when President Trump was in the Asian time zone, he called him and instructed him to lift the relevant regulations, and he carried out that order.

Yonhap News