A changing of the guard at the U.S. Department of Transportation marks a significant shift in America's vehicle affordability policy.
According to the US Department of Transportation, Sean Duffy was sworn in as the 20th Secretary of Transportation on Tuesday, January 28, 2025, in a ceremony presided over by Supreme Court Justice Clarence Thomas.
The new Transportation Secretary wasted no time implementing changes, signing a memorandum immediately after taking office that targets Corporate Average Fuel Economy standards. This directive aims to make vehicles more affordable for American consumers by eliminating what the administration views as overly restrictive fuel standards and electric vehicle mandates.
The memorandum directs multiple DOT offices, including the Office of the General Counsel, the Office of the Undersecretary for Policy, and the National Highway Traffic Safety Administration, to begin the process of revising existing CAFE standards. Current regulations require passenger cars and light trucks to achieve 50.4 miles per gallon by Model Year 2031, a standard the new administration considers burdensome.
Data from Cox Automotive reveals a concerning trend in vehicle affordability over the past three years. New car prices surged 15.5% between March 2021 and March 2024, with the average price climbing from $40,881 to $47,218. The automotive market has seen a dramatic reduction in affordable options, with only eight new vehicle models priced below $25,000 in March 2024, compared to more than 20 models in March 2021.
Transportation Secretary Duffy stated:
I am deeply honored by the trust placed in me by President Trump to lead this important Department and for the Senate in swiftly confirming my nomination. We are already hard at work executing the President's vision to usher in a golden age of transportation by taking immediate action to remove government overreach and lower costs for hardworking Americans.
The policy shift implements two executive orders signed by President Trump on his first day in office, January 20, 2025. These orders, titled "Initial Rescissions of Harmful Executive Orders and Actions" and "Unleashing American Energy," signal the administration's commitment to rolling back regulations they believe hamper economic growth.
The DOT's initiative reflects a broader administrative strategy to reduce government intervention in the automotive industry. Officials argue that existing CAFE standards have weakened America's auto industry while limiting consumer choice and affordability.
Secretary Duffy emphasized the administration's position regarding current fuel economy standards:
The memorandum signed today specifically reduces the burdensome and overly restrictive fuel standards that have needlessly driven up the cost of a car in order to push a radical Green New Deal agenda. The American people should not be forced to sacrifice choice and affordability when purchasing a new car.
The ceremony at the U.S. Supreme Court marked a pivotal moment for American transportation policy. Duffy, accompanied by his family, took the oath of office administered by Justice Thomas before heading to DOT headquarters to begin his tenure.
The immediate focus on CAFE standards demonstrates the new administration's priority of addressing vehicle affordability. The department's analysis suggests that current regulations have contributed significantly to rising vehicle costs, affecting American consumers' ability to purchase new cars.
The regulatory review process initiated by Secretary Duffy's memorandum is expected to have far-reaching implications for both the automotive industry and American consumers.
Sean Duffy's appointment as Transportation Secretary represents a significant shift in U.S. transportation policy, particularly regarding vehicle affordability and fuel economy standards. His first action as secretary targets CAFE standards that the administration believes have driven up car prices to an average of nearly $48,000. The Department of Transportation's new direction, aligned with President Trump's executive orders, aims to make vehicles more accessible to American consumers by eliminating what they consider excessive regulatory burdens on the automotive industry.
