Revision Completes the Reform of All Three Biden-era Rules That  Forced EV Adoption

What's new: Today, the National Highway Traffic Safety Administration (NHTSA) issued a final rule resetting its corporate average fuel economy (CAFE) standards at achievable levels, given the current market for battery-electric vehicles (BEVs) in the U.S.  These new CAFE standards apply to passenger cars and light trucks manufactured for MYs 2022-2031.

Why it matters: The prior CAFE standards sought to push fuel economy at a pace requiring dramatic increases in BEV sales far exceeding consumer demand. Today's revisions bring the standards in line with statutory requirements and Americans' interest in BEVs. Under the new rule, dealers and manufacturers can offer the full range of vehicle technologies and powertrains consumers want to buy.

These reforms should translate into lower new-vehicle purchase prices. NADA estimates that resetting CAFE standards to the economically practicable levels in this final rule will make a new vehicle affordable for an additional 2.6 million American households.

Tell me more: Under the previous administration, three regulatory regimes (California, EPA, and NHTSA) would have forced a supply of BEVs on dealers' lots higher than customer demand. As manufacturers prepared to comply with new regulations, BEV inventories climbed to as much as 70 days' supply higher than internal combustion engine-driven vehicles. Over the last 18 months, Congress struck down California's regulations, and the administration reversed EPA's regulations. NHTSA's revision of the CAFE rule is the final piece in reversing technology-forcing regulations that do not align with customer demand.

What we are doing: NADA filed a comment supporting NHTSA's revised CAFE standards. NADA CEO Mike Stanton released the following statement upon NHTSA's release of the final rule:

"NADA commends the Department of Transportation for issuing a fuel efficiency rule that supports consumer choice. The updated standards will yield year-over-year improvements in fuel economy while letting automakers build cars that customers want and can afford."

Go deeper: The final CAFE rule completes the reform of all three of the significant Biden-era rules forcing EV adoption. In February 2026, EPA repealed its 2009 "endangerment finding," that provided the legal basis for regulating emissions under the Clean Air Act (CAA). In repealing the finding, EPA concluded the CAA does not authorize the agency to regulate carbon dioxide emissions.

In June 2025, President Trump signed legislation blocking California and several other states from enforcing regulations that would have forced a shift to electric vehicles far faster than consumer demand supported, including a complete phase-out of ICE engines by 2035 in those states. These Congressional Review Act disapprovals of preemption waivers stopped a process that would have significantly disrupted the vehicle market, causing higher prices and less consumer choice.