Trump's EPA is targeting key vehicle pollution rules. What that means for carmakers

Thu, Jul 31, 2025, 12:31 PM 5 min read

DETROIT (AP) — The Environmental Protection Agency’s plan this week to relax rules aimed at cleaning up auto tailpipe emissions is the latest Trump administration move to undo incentives for automakers to go electric.

As part of a larger effort to undo climate-based governmental regulations, the EPA on Tuesday said it wants to revoke the 2009 finding that carbon dioxide and other greenhouse gases endanger public health and welfare. That would cripple the legal basis for limiting emissions from things like power plants and motor vehicles.

President Donald Trump’s massive tax and spending law already targets EV incentives, including the imminent removal of a credit that saves buyers up to $7,500 on a new electric car.

The tax law approved in early July also includes another provision that will hit Tesla and other EV makers in the pocketbook — repealing fines for automakers that don’t meet federal fuel economy standards.

Automakers can buy credits under a trading program if they don’t meet the mileage standards. EV makers like Tesla, which don’t rely on gasoline, earn credits that they can sell to other carmakers. The arrangement has resulted in billions of dollars in revenue for Tesla and millions for other EV makers like Rivian.

That is all set to go away under the new law.

Trump has also challenged federal EV charging infrastructure money and blocked California’s ban of new gas-powered vehicle sales.

It adds up to less pressure on automakers to continue evolving their production away from gas-burning vehicles. And that's significant because transportation — which also includes ships, trains and planes — is the sector that contributes the most to planet-warming emissions in the U.S.

Push and pull on tailpipe and mileage rules

Stringent tailpipe emissions and mileage rules were part of the Biden administration's pledge to clean up the nation’s vehicles and reduce use of fossil fuels by incentivizing growth in EVs. EVs do not use gasoline or emit greenhouse gases.

The Trump administration and the auto industry have said both rules were unreasonable for manufacturers.

Automakers could meet EPA tailpipe limits with about 56% of new vehicle sales being electric by 2032 — they're currently at about 8% — along with at least 13% plug-in hybrids or other partially electric cars, and more efficient gasoline-powered cars that get more miles to the gallon.

The latest mileage targets set under the Biden administration required automakers to get to an average of about 50 miles (81 kilometers) per gallon for light-duty vehicles by model year 2031, and about 35 miles per gallon for pickups and vans by model year 2035.