The average price of a new car in the U.S. is now over $50,000. In January 2021 — my favorite measuring stick because that’s when Joe Biden took office — a new car averaged just over $40,000. In other words, the Biden Premium is 25%.
To be sure, Biden doesn’t bear all of the blame for this massive increase in the cost of a new vehicle.
Yet he and his fellow “affordability” Democrats ignited the wildfire of inflation that they now promise to put out. Please. And Biden’s administration saddled the auto industry with a de facto electric vehicle mandate through ridiculously high mileage standards. Team Biden raised the Corporate Average Fuel Economy (CAFE) standards to 50.4 MPG by 2031.
Fortunately, President Donald Trump favors deregulation, as he showed again yesterday by finalizing the repeal of Biden’s CAFE standards. His administration calls it “Freedom Means Affordable Cars,” and the rule resets mileage requirements to 34.9 miles per gallon. The tradeoff is that Trump’s rule will make it more difficult to classify an SUV as a light truck, which automakers routinely do to avoid stringent standards.
Furthermore, Trump’s One Big Beautiful Bill Act rescinded the $7,500 tax credit for EV purchases, and it removed financial penalties imposed on automakers who missed CAFE marks. The official standards build on that progress.
When Trump first announced this move last December, our Thomas Gallatin noted, “The average price of gas has now dropped below $3 a gallon for the first time in over four years. This is thanks in considerable measure to Trump’s pro-fossil fuel energy agenda.”
To put it mildly, things are a bit different now. The average price of gas is $4.46 per gallon today, and diesel is $6.44 per gallon. Leftmedia outlets trumpet these numbers as a way of undermining support for Trump and Republicans ahead of the midterm elections. It’s largely true that Trump’s military actions against Iran are the reason for the spike in prices, but those actions are necessary and worth the cost. The Leftmedia never mentions that part. Nor do any journalists note that expensive fuel is Democrat climate cult policy.
“Thanks to President Trump’s leadership,” said Transportation Secretary Sean Duffy, “we have finally ended the illegal mandate that forced automakers to produce more expensive electric vehicles that American families didn’t want.” The Department of Transportation projects that the rule change will save an average of $1,300 on each new vehicle, and that Americans will save $138 billion over the next five years. Here’s hoping.
The National Highway Traffic Safety Administration (NHTSA) says this program “artificially propped up the EV industry at the expense of traditional automakers” and its elimination “restores fairness, puts all automakers on an even playing field, and ensures that manufacturers are spreading fuel-saving technologies throughout their fleets.”
The first Trump administration fought this same battle, rolling back onerous fuel standards imposed by Barack Obama’s administration. The trouble for automakers is that research and development would ideally last longer than four years. With each change of administration, the rules change, and that’s hard to plan for.
As for prices, it’s almost amusing to see Democrats and their Leftmedia propagandists racing to argue that Trump’s new CAFE standards won’t save money or might even cost money. Virtually everything Democrats touch becomes more expensive. That’s especially true with anything they can claim affects the climate, like auto emissions.
By contrast, Trump and his fellow Republicans have cut taxes and regulations, which saves money. The economy obviously isn’t perfect, and global challenges affect prices. But if you want affordable gas and cars, don’t think for a second Democrats will bring it about.
