AMAC Magazine Exclusive – By Shane Harris
One of President Donald Trump’s signature campaign promises in 2024 was to rebuild the American auto industry following years of stifling government mandates and sagging production. One year into his second term, the 45th and 47th president is delivering on that pledge.
When Trump returned to office last January, American automakers were struggling under a regulatory regime shaped by the Biden administration’s aggressive push toward electric vehicles (EVs). In 2020, incoming Biden Secretary of Transportation Pete Buttigieg declared, “To meet the climate crisis, we must put millions of new electric vehicles on America’s roads.”
This philosophy drove a series of federal policies that reshaped how cars were built, priced, and sold in America—much to the chagrin of car manufacturers and budget-conscious consumers.
Sweeping changes to corporate average fuel economy (CAFE) standards were particularly damaging to the auto industry. CAFE standards are federal mandates that force automakers to meet certain average fuel efficiency targets across all the vehicles they produce. Manufacturers who fail to meet these targets are subject to steep penalties.
Under the Biden administration, regulators set impossible targets that would require new passenger vehicles and light trucks to average roughly 50 miles per gallon by model year 2031.
While presented as fuel efficiency rules, this standard functioned as a de facto EV mandate. Biden regulators knew that car companies would never be able to meet the new standard with gas-powered cars. As a result, they would be forced to produce exponentially more EVs so the average fuel economy of their fleets would meet the standard.
The result was that all vehicles became more expensive. Automakers were forced to invest billions in batteries, emissions systems, and compliance technologies, even for gas-powered models that Americans still overwhelmingly preferred. Those costs did not disappear. They were passed directly to consumers.
By the end of Biden’s presidency, the average price of a new car topped $49,000, rising faster than inflation. When Biden took office in January 2021, the average new car cost just over $40,000.
The regulatory burden went well beyond fuel economy targets. In 2023, the Biden administration finalized additional emissions rules covering light, medium, and heavy-duty trucks. Industry estimates projected these regulations would eliminate as many as 117,000 auto manufacturing jobs. Taken together, Biden-era regulations were estimated to cost the auto industry roughly $200 billion over just a few years.
At the same time, congressional Democrats and President Biden passed the so-called Inflation Reduction Act, which included $1.2 trillion in subsidies on “green” infrastructure. A substantial portion of that money went toward EV subsidies and tax credits. Despite the scale of government assistance, consumer demand for EVs lagged well behind expectations.
Automakers were squeezed from both sides: To meet federal standards, they had to add expensive components to gas-powered vehicles. To satisfy regulators, they also had to absorb heavy losses on EV lines that were not commercially viable.
The impacts of this onslaught are still being felt. At the end of last year, General Motors announced a $1.6 billion loss tied to its EV business. Ford also recorded $19.5 billion in charges related to EV investments.
In effect, federal policy pushed American automakers into an unsustainable position. It became prohibitively expensive to produce affordable, dependable cars for the average family.
President Trump has taken a fundamentally different view. As he sees it, the United States built the modern auto industry, and this industry remains the beating heart of American manufacturing. If the nation is going to reclaim its industrial strength, it will be driven by cars, trucks, and the workers who build them.
One of the most significant changes under Trump has been rolling back the Biden-era CAFE standards. The Trump administration’s reset allows manufacturers to build vehicles based on consumer demand rather than regulatory math.
Companies may now comply by using gasoline and diesel engines instead of being forced into electrification. The administration estimates this change will prevent roughly $1,000 from being added to the sticker price of a new car and save American families $109 billion over five years.
Trump’s CAFE updates also end EV mandates and set the violation penalty to zero, shielding automakers from steep fines tied to EV shortfalls. As an added bonus, by helping more Americans buy newer vehicles with modern safety features, the reset is projected to save more than 1,500 lives and prevent nearly a quarter-million serious injuries through 2050.
Trump also eliminated the Biden-era $7,500 federal EV tax credit through his One Big Beautiful Bill, returning control of the market to consumers rather than federal subsidies. In another bold move last June, he signed a joint resolution ending California’s EV mandates, which would have effectively banned new gas-powered car sales in the state by 2035 and imposed similar rules on 17 other states that mirror California standards.
Trade policy has also played a role in reviving the US auto industry. Trump’s tariffs on foreign automakers are working as designed, pressuring companies to bring production back to the United States, strengthening domestic supply chains, and supporting American workers.
While it is still early, signs suggest the strategy is working. Last August, Ford announced a $5 billion “Bet on America” initiative that includes creating or securing 4,000 US jobs and modernizing domestic assembly lines. In October, Chrysler and Jeep parent company Stellantis announced a $13 billion investment to expand US production by 50 percent. Nissan, Honda, and other foreign manufacturers have also confirmed plans to move portions of their production to the United States.
Cars are woven into American culture and are a pillar of US economic might. They represent mobility, independence, and industrial power. By aligning policy with market realities, President Trump is delivering on his promise to reinvest in the US auto industry and restore its role as a cornerstone of the American economy.
This is a step in the right direction. Congress, needs to codify many of these changes, so the next Democrat administration can’t so easily get rid of them.
too bad biden was pushing the change to ev cars, the auto industries lost so much money trying to kiss the green peoples asses now we have to pay more for vehicles.the only ones that made out on the electric cars are the lousy chinese.now we have to deport all of biden & harris illegals
Hopefully cars and trucks will become more simple and affordable…not everyone needs assist , hands free parking…some of us are capable of mastering this on our own…just saying.
Dems have not an inkling of how their psychotic dreams play out in reality.
Trump’s efforts will AUTOmatically improve things for the Car Industry!
My Dad, who was an auto mechanic, said that auto manufacturers could make motors that got 50 miles to the gallon, but the gasoline manufacturers paid the auto companies to not do it. He said that back in the late 1950s, when I was yet a child 6 or 8 years old. I have no idea if what he said was true, but he did believe it enough to have said it where and when I could hear him say it to other adults. It is good to get rid of expense adding regulations in the auto industry.