NHTSA Overhauls Fuel Economy Standards, Prompting Legal Challenges
On September 30, 2026, the National Highway Traffic Safety Administration (“NHTSA”) finalized a significant overhaul of the Corporate Average Fuel Economy (“CAFE”) program. The CAFÉ program is the U.S. federal regulatory framework for the average fuel efficiency of a vehicle manufacturer’s cars and light trucks. The new rule, which comes into effect on November 30, 2026, relaxes a number of industry regulations, including lowering fuel efficiency targets.
Per the rule, NHTSA says these changes are intended to:
…remove previous regulatory distortions which have induced manufacturers to make design decisions that have neither aligned with market demand and the needs of American families nor have delivered the consistent improvements in the fuel economy performance of manufacturer fleets…
The change has drawn criticism from environmental organizations and state officials. 26 state and local governments have filed a joint Petition for Review to the U.S. Court of Appeals for the First Circuit to challenge the rule. A release by the Maryland Attorney General's Office, which has joined the Petition for Review, says, among other criticisms, that:
The final rule misinterprets NHTSA’s statutory authority and ignores the presence of millions of electric vehicles in the nation’s existing fleet, leading to a flawed, dramatically distorted analysis of the “maximum feasible” fuel economy level that the auto industry can achieve. Essentially, NHTSA’s reinterpretation of the law renders the federal fuel economy program toothless, unable to protect consumers against rising gas prices or the ongoing global oil disruption.
Read the NHTSA rule here:
Read the Petition for Review here:
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