Rayfield Joins Lawsuit to Block Fuel-Efficiency Rule Rollback, Administration Says Rules Raise Car Prices

Oregon — Oregon Attorney General Dan Rayfield has joined a coalition of states challenging the Trump administration’s rollback of federal fuel economy standards, arguing the changes would cost drivers nearly $220 billion in lost fuel savings. The administration says its revised standards would lower vehicle prices, expand consumer choice and correct an unlawful push toward electric vehicles.

The October 2 petition filed in the U.S. Court of Appeals for the First Circuit challenges the National Highway Traffic Safety Administration’s Safer Affordable Fuel-Efficient Vehicles Rule III. The action places Oregon in a national dispute over how the federal government should balance fuel efficiency, vehicle affordability and statutory limits on its regulatory authority.

In announcing the challenge, Rayfield’s office said the revised standards would increase gasoline expenses, worsen pollution and leave drivers more exposed to oil price increases. The coalition argues that NHTSA understated nearly $220 billion in lost fuel savings and effectively disregarded future climate damages.

The states also contend that removing electric vehicles from the agency’s calculations produces standards below what automakers can realistically achieve. Rayfield’s office said the requirements would hold new vehicles over the next five years to a lower standard than vehicles Americans were already driving in 2021. That comparison is part of the coalition’s argument against the rule, rather than a finding by the court.

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The administration’s rationale focuses on the cost of purchasing a vehicle and the limits Congress placed on the fuel economy program. In its September 28 announcement, the Department of Transportation said the previous standards pushed manufacturers toward expensive electric vehicle investments and raised costs for buyers.

The department projects that the reset would reduce the average price of a new vehicle by approximately $1,300 and save Americans $138 billion over five years. It also forecasts safety benefits from encouraging drivers to replace older vehicles with newer models. Those outcomes depend on the agency’s assumptions about manufacturing costs, sales and consumer behavior.

NHTSA’s final rule revises requirements for model years 2022 through 2031 and projects a combined industry average of roughly 34.9 miles per gallon in 2031. The requirements use vehicle-based targets to determine manufacturers’ fleet obligations. The projected average is therefore neither a requirement for every individual model nor a direct equivalent of the mileage displayed on a vehicle’s window sticker.

The competing cost estimates reflect different parts of vehicle ownership. Lower compliance costs could reduce the amount buyers pay at the dealership, while slower improvements in fuel efficiency could increase gasoline expenses over the vehicle’s life. The states’ lost-savings estimate and the administration’s broader savings claim should not be directly subtracted from one another without accounting for their underlying assumptions, time periods and categories of costs.

For a household, the balance would depend on the vehicle purchased, its price and efficiency, annual mileage, gasoline prices and how long it remains in use. A driver who travels frequently could place greater value on fuel savings, while a buyer struggling to afford a replacement vehicle could place greater weight on the initial price.

At the center of the legal dispute is the Energy Policy and Conservation Act. The law requires standards at the “maximum feasible” level, taking into account technological feasibility, economic practicability, other federal vehicle standards and the nation’s need to conserve energy.

The statute also limits consideration of dedicated alternative-fuel vehicles when making specified determinations and requires dual-fuel vehicles to be treated as operating on gasoline or diesel. The dispute concerns how those restrictions apply to the agency’s modeling and its determination of achievable standards.

The administration argues that the prior approach used electric vehicle technology to establish requirements beyond what Congress authorized, creating what it describes as a backdoor EV mandate. The states argue that excluding electric vehicles from the calculations improperly weakens the program and undermines its conservation purpose.

The rule also ends trading between manufacturers of credits earned beginning in model year 2028. Such trading allows manufacturers with excess credits to sell them to other manufacturers. The administration says ending the program would remove an artificial advantage for EV producers, while the coalition argues that the change threatens support for American electric vehicle jobs.

Vehicle classifications would change beginning in model year 2030 as well. The department says the revisions would move many vehicles currently classified as light trucks into the passenger-car category and reduce incentives to alter designs to qualify for less stringent requirements.

Consumer choice is central to the administration’s case: reducing regulatory pressure toward electric vehicles would give manufacturers greater flexibility to offer gasoline, diesel and hybrid models according to demand. The coalition’s case emphasizes the fuel savings and environmental benefits it says would be lost under the revised requirements. Neither position establishes that every buyer would face the same financial outcome.

The court challenge asks whether NHTSA’s reset complies with federal law, including its obligation to establish the maximum feasible standards. Filing the lawsuit does not itself suspend the rule. For Oregon drivers, the practical stakes include both the affordability of their next vehicle and the cost of fueling it over the years that follow.