The Biden Administration proposed new fuel efficiency standards for light trucks and passenger cars, which they said would save Americans hundreds at the pump but also increase car prices.

New Corporate Average Fuel Efficiency (CAFE), announced Friday by the Department of Transportation’s National Highway Traffic Safety Administration, requires that passenger cars and small trucks improve their fuel efficiency by 2% and 4% respectively, starting in 2027. The rules require pickup trucks and vans to increase fuel efficiency by 10% each year, starting in 2030.

The agency stated that by 2032 the average U.S. fleet could achieve 58 miles per gallon. According to the Environmental Protection Agency, the estimated average fuel consumption for cars in model year 2022 was 26.4 miles per gal. The proposed standards would require automakers to more than double their fuel efficiency in under a decade.

“Better fuel efficiency in vehicles means more money for Americans and stronger energy security across the nation,” Transportation Secretary Pete Buttigieg stated in a press release.

In their announcement, DOT & NHTSA stated that if the CAFE standards are finalized, they will save consumers over $50 billion in fuel costs during vehicle lifetimes. They also claim to reduce oil dependency by reducing gasoline usage by 88 billion gallons by 2050.

The administration said that the standards will reduce carbon emissions by over 900 million tonnes through 2050. The administration stated that such a large reduction in emissions is equivalent to taking more than 23 million vehicles off of the road during this time period.

Ann Carlson, Acting Administrator of NHTSA, said that “CAFE standards are driving the auto industry into innovation in order to improve fuel economy and benefit our nation as well as all Americans.”

She continued, “The new standards that we propose today will advance our energy security and reduce harmful emissions while saving families and businesses money at the gas pump.” “That’s great news for all.”

The Friday proposal is certain to be met with considerable opposition from Republican legislators, the fossil fuel industry, and automakers.

David Strickland, Vice President for Global Regulatory Affairs at General Motors, met with White House officials on July 17 as part of the pre-rule process. He presented data that showed the CAFE standards may cost companies $300 billion. According to the presentation, these costs would be in the form of government fines if fuel efficiency requirements were not met.

NHTSA will finalize its proposed CAFE standard for model years 2024-2026 in March 2022. This will mandate that the industry fleet average be 49 miles per gallon or more by 2026. In an accompanying report, the agency admitted that the standards will cost automakers approximately $236.5 billion. It also projected a rise in car prices of more than $1,000.

The proposal on Friday comes just three months after the EPA made its most aggressive proposal ever for tailpipe emissions, in which it claimed that 67% of all new cars, SUVs, crossovers, and light trucks would be electric by the year 2032.

NHTSA’s rules will “complement and align” with the EPA emission standards.

The agency announced Friday that it would coordinate with the EPA in order to maximize the effectiveness of the standards and minimize compliance costs while still ensuring they are consistent with applicable statutory requirements. NHTSA is inviting all stakeholders to comment on the proposal released today.

Ted Cruz, R. Texas, Ranking Member of the Senate Commerce Committee, sent a letter on May 1 to NHTSA Acting Director Carlson warning her not to follow the EPA in cracking down against gas-powered cars. In the letter, Carlson was urged to “reject the EPA’s economically destructive regulatory overreach.”

In the letter, he said: “Based on your track record, we’re deeply concerned that, following the EPA, the National Highway Traffic Safety Administration would propose similar radical vehicle fuel efficiency standards that are contrary to law, reduce vehicle choice, increase costs for American families and undermine national and energy security, all while benefitting China.”

Cruz said in a Friday statement that the proposal would become a “defacto EV mandate” if it was finalized.

Cruz said, “Today the Biden Administration escalated its war on affordable gas-powered cars and trucks by taking a playbook from California’s Green New Deal.”

“Commerce Republicans warned the failed radical NHTSA nominee Ann Carlson not to take this step in a May 1st letter because American families should be free to purchase any vehicle they want,” he added. “This de facto EV mandate will dramatically raise car prices, weaken energy security, and is likely contrary to the law. I will continue to fight this Bidenomic policy.”

On May 30, the White House retracted its nomination of Carlson as NHTSA’s new director after Cruz and other legislators strongly opposed her for bragging that NHTSA, founded in 1970 for improving passenger car safety and reducing traffic deaths, could be transformed into an agency centered on climate change. She remains the acting administrator of the agency, which makes her an effective leader.