Looser standards may help automakers build vehicles customers want now. The trade-offs include fuel bills, battery investments and climate pollution.
WASHINGTON DC – President Donald Trump says he has approved a rollback of federal fuel economy standards, a move that could change the outlook for Michigan auto jobs at a time when buyers are showing stronger interest in hybrids than in battery-electric vehicles.
For Ford, General Motors, Stellantis and their suppliers, the business question is immediate: What vehicles should they build to keep plants running and workers employed? Looser standards could give them more freedom to produce gasoline-powered pickups and SUVs while expanding hybrids. But Michigan is also investing in batteries and EVs, and a shift in automakers’ plans could affect where the next generation of jobs goes.
Drivers and the climate have a stake, too. A vehicle that costs less to buy may use more gasoline over its lifetime. Burning that fuel adds greenhouse gases to an already warming atmosphere.
The final federal rule and its economic analysis have not yet been released. That leaves the size of any change in vehicle prices, fuel spending, emissions or Michigan employment unknown.
Buyers are shaping the decision
Automakers cannot sustain production of vehicles that customers do not buy in sufficient numbers. Recent sales show why they have been reconsidering the pace of their EV plans.
Cox Automotive estimated that battery-electric vehicles accounted for 5.8% of U.S. new-vehicle sales in the second quarter of 2026. EV sales increased from the first quarter but fell 20.5% from the same quarter a year earlier. Cox forecast that hybrid sales would rise about 9% in the first half of 2026, despite an expected decline in the overall new-vehicle market. www.coxautoinc.com
Those numbers do not mean Americans have stopped buying EVs. They show that battery-electric vehicles remain a relatively small part of new sales and that buyers’ choices have not matched some earlier expectations for a rapid transition. Gasoline engines still power most new vehicles, whether in conventional models or hybrids.
A hybrid offers a possible compromise for shoppers who want better mileage but are concerned about charging, range or the price of a battery-electric vehicle. It still burns gasoline, though generally less than a comparable conventional vehicle. For automakers, hybrids also offer a way to sell more efficient products while drawing on existing engine production and newer electrical technology.
The rollback could give Michigan manufacturers more room to follow that mix of customer demand. Whether they use it to expand production and hiring in the state is a separate decision.
What would the rule change?
Trump has described his action as ending an “EV mandate.” The Biden-era fuel economy standards did not require consumers to buy electric vehicles. They set efficiency targets for automakers’ fleets, leaving companies to decide which combinations of gasoline vehicles, hybrids and EVs to build. www.nhtsa.gov
An earlier National Highway Traffic Safety Administration proposal projected a fleetwide requirement of roughly 34.5 miles per gallon by model year 2031, compared with approximately 50.4 mpg under the Biden-era rule. These are regulatory projections across manufacturers’ fleets, not mileage requirements for each car or truck. Trump’s final rule could differ from that proposal. nhtsa.gov
The fuel economy rollback is also distinct from the Environmental Protection Agency’s repeal of federal vehicle greenhouse gas standards in February. EPA said its action did not change NHTSA’s separately administered fuel economy standards. www.epa.gov
Michigan’s current jobs and future jobs
The potential near-term beneficiaries include Michigan plants and suppliers tied to gasoline-powered pickups, SUVs, engines and transmissions. If automakers can sell more of those vehicles without facing as much pressure to raise fleetwide mileage, they may have more flexibility to maintain production and invest in products buyers currently favor.
That matters in an industry already facing employment pressure. The Detroit Regional Chamber reports that Michigan automotive manufacturing employment fell by approximately 6,500 jobs in 2025. Its latest published figure puts employment at 155,100, below the 2025 annual average. The federal rule cannot restore those jobs by itself; future hiring will depend on sales, plant assignments and supplier contracts. www.detroitchamber.com
The picture differs across Michigan’s supply chain. A company making engine or transmission parts may welcome longer demand for gasoline-powered vehicles. A supplier building battery components may be more concerned about the timing of future EV programs. Hybrids could bring orders to both, depending on where automakers source their parts.
Michigan already has substantial EV investments in motion. Ford said in June that more than 500 employees had joined its BlueOval Battery Park Michigan operation in Marshall. The company aimed to reach 800 by the end of 2026 as it worked toward a goal of 1,700 jobs, and said the plant was on track to ship EV batteries this year. www.fromtheroad.ford.com
Trump’s announcement does not cancel that project. It does raise a question for future investment: If automakers expect slower U.S. EV growth, will they delay additional Michigan battery and component work? Conversely, could greater freedom to build profitable vehicles today provide money to fund future technologies? Neither outcome can yet be counted as jobs gained or lost.
The costs for drivers and the climate
Supporters of the rollback argue that less demanding standards could lower vehicle production costs and make new cars and trucks more affordable. But any savings would reach buyers only if automakers reflect them in prices. Drivers would then need to compare the purchase price with years of fuel costs. Less efficient vehicles can be more expensive to operate, especially when gasoline prices rise.
Fuel economy standards also serve an environmental purpose: reducing gasoline consumption reduces carbon dioxide emissions. Transportation is the largest source of direct U.S. greenhouse gas emissions, according to the Environmental Protection Agency. A weaker standard could increase fuel use and emissions relative to the Biden-era rule; the final analysis should show the administration’s estimate of how much. www.epa.gov
The climate stakes are measurable. 2023, 2024 and 2025 were the three warmest years in NASA’s 146-year record. Human-caused warming is contributing to more extreme heat, heavier rainfall, ice loss and rising seas. A single federal vehicle rule will not determine the climate’s course, but its effect on fuel burned over many years is part of that larger picture. svs.gsfc.nasa.gov
Michigan’s immediate challenge is to keep building vehicles customers will buy while retaining the workers and investments needed to compete as those preferences change. MITechNews will examine the final rule’s cost and fuel estimates and seek Michigan-specific responses this week from automakers, suppliers, the UAW and independent analysts.
