The US Transportation Department has finalised sharply lower vehicle fuel economy standards, the Trump administration’s latest move to encourage petrol car sales and reverse Joe Biden’s push towards greater efficiency and electric vehicles.

The new rules set a fleetwide average of 34.9 miles per gallon by 2031, down from 50.4 mpg under Biden-era standards. Carmakers will now need to improve fleet efficiency by up to 1% a year instead of 2%.

Transportation Secretary Sean Duffy said the rule would cut the average new-vehicle price by about $1,300 and save Americans $138 billion over five years. President Trump posted on Truth Social that the standards would mean “LOWER PRICES, saving families thousands.”

The rules also end credit trading among carmakers in 2028, a significant income source for EV makers like Tesla and Rivian. The Alliance for Automotive Innovation, representing GM, Toyota, Volkswagen, Hyundai and Ford, said the government “made the right call.”

The department estimates the rule will raise US petrol consumption by 4.6% through 2050 and increase lifetime fuel costs by more than $1,600 per vehicle, drawing criticism from climate advocates.