US Cars Could Get ₹1.25 Lakh Cheaper: Trump Administration Changes Mileage Rules, But There's a Catch
Buying a new car in the US could become cheaper after the Trump administration announced a major change to vehicle fuel-economy regulations. The US Department of Transportation has proposed relaxing fuel-economy requirements for new vehicles, arguing that the move will reduce manufacturing costs and give consumers more freedom when choosing cars.
According to the administration, the changes could eventually reduce the average price of a new vehicle by around $1,300, which is roughly ₹1.25 lakh.
What has changed?The new proposal would reduce the fuel-economy standards that car manufacturers are expected to meet across their vehicle fleets.
Under regulations introduced during the Biden administration, the fleet-average fuel-economy target was expected to rise to more than 50 miles per gallon by 2031.
For comparison, 50 miles per gallon is roughly 21 km per litre, while 35 miles per gallon is around 15 km per litre.
This means automakers would face less pressure to improve the average fuel efficiency of the vehicles they sell.
Why does the government want to relax the rules?The Trump administration argues that stricter fuel-economy requirements were increasing the cost of vehicles by pushing manufacturers towards expensive technologies, including electric vehicles and other fuel-efficient systems.
Transportation officials say consumers should have greater freedom to choose the type of vehicle they want rather than manufacturers being heavily influenced by government mileage requirements.
The administration believes lower compliance costs could eventually translate into cheaper vehicles and make newer cars more accessible to American families.
How much could car buyers save?According to government estimates, the relaxed standards could reduce the average cost of a vehicle by approximately $1,300 over time.
The US Transportation Department also estimates that the changes could save Americans around $138 billion over five years.
However, the actual saving for an individual buyer isn't guaranteed. Automakers ultimately decide vehicle prices, so the full reduction in manufacturing or compliance costs may not necessarily be passed directly to customers.
Why are environmental groups concerned?The proposal has also attracted criticism.
There is also an environmental concern. Vehicles with lower fuel efficiency generally consume more fuel and produce more emissions.
This creates a trade-off: consumers could potentially pay less upfront for a new car but spend more on fuel over the vehicle's lifetime.
The proposed changes come at a time when new vehicles in the US remain expensive, with average new-car prices approaching $50,000.
The government argues that making vehicles more affordable could encourage people to replace older cars with newer and safer models. Newer vehicles generally come with improved safety technology, which could potentially reduce the severity of accidents.
The auto industry has also broadly welcomed the move, describing it as a more flexible approach that reflects current market conditions.
The new policy could make vehicle manufacturing less expensive and potentially reduce showroom prices. But consumers will need to consider the complete cost of ownership.
A cheaper car that delivers lower mileage could mean higher petrol expenses over several years. With fuel prices already a major consideration for American motorists, the long-term savings may therefore vary considerably from one buyer to another.
Ultimately, the impact of the policy will depend on how automakers price their vehicles, which models they choose to develop and how petrol prices move in the coming years.