The Trump administration has finalized a major overhaul of US fuel-economy regulations, significantly reducing requirements that have encouraged automakers to improve vehicle efficiency and expand electric-vehicle production.

Under the new National Highway Traffic Safety Administration (NHTSA) rules, manufacturers will need to achieve an average of 34.9 mpg by model year 2031, well below the roughly 50 mpg target established under the previous Biden-era standards.

The administration says the changes will lower vehicle development costs and bring regulations closer to current market conditions.

The Transportation Department estimates automakers could save $60.6 billion in technology costs through 2031, with General Motors alone expected to save around $20.4 billion.

The revised rules have received support from automakers and industry representatives, who argued that the previous requirements placed excessive pressure on manufacturers to develop efficiency technologies and sell more EVs.

Environmental groups, however, have criticized the rollback, warning that weaker fuel-economy requirements could increase fuel consumption, emissions and running costs for motorists.

The new regulations will also end the existing compliance credit-trading system from 2028 and introduce changes to vehicle classification from 2030, affecting how cars and light trucks are assessed.

The rules are expected to take effect in early December, marking a significant change in US vehicle efficiency policy.