26 States, Cities and Counties Sue Over NHTSA Rule Lowering the 2031 Fuel Economy Target to 34.9 MPG

A Number That Means Two Different Things

Pick a sticker price off a dealer's lot in 2031, and the federal government will tell you it's about $1,300 cheaper than it would have been under the rules written in 2024^[6]. Pick the same car's gas receipts over its lifetime, and a coalition of states will tell you its owner stands to lose a share of nearly $220 billion that drivers would otherwise have kept^[1][9]. Both numbers come from the same rule. Both sides are using the government's own math. They just chose which end of the trade-off to hold up.

That rule, finalized by the National Highway Traffic Safety Administration (NHTSA) on September 28, 2026, resets how fuel-efficient new cars and light trucks have to be through 2031^[10]. It projects a fleet that averages 34.9 miles per gallon that year, down from the 50.4 mpg target set under President Biden^[2][3]. On October 2, a coalition of 21 states, the District of Columbia, and four cities and counties — including New York City, Chicago, Denver and San Francisco — sued to overturn it, with California Attorney General Rob Bonta and New Mexico Attorney General Raúl Torrez leading the charge^[1][4]. Five environmental and consumer groups filed a separate challenge the same day^[8][9].

Everyone agrees on the numbers. What they don't agree on is which car counts as a car.

Why a 50-Year-Old Law Decides Whether Electric Cars Get Counted

The fight sounds like a dispute over mileage, but it's really a dispute over math, and the math turns on one word: feasible.

Congress never picks the mpg number itself. It tells NHTSA to set standards at the "maximum feasible" level, and leaves the agency to work out what that means^[1]. Here's how the agency does it. It first models the fleet automakers would build anyway — a baseline. Then it asks how much more efficient that fleet could get at a reasonable cost. The stricter the baseline looks already, the higher the bar for "maximum feasible" gets pushed.

That's why it matters whether electric vehicles are in the baseline. NHTSA's new rule counts only gasoline and diesel vehicles, including regular (non-plug-in) hybrids — not EVs, and not the electric-only driving of plug-in hybrids^[2]. The agency says the governing fuel economy law, the Energy Policy and Conservation Act (EPCA), requires exactly that^[2]. Leave EVs out, and the fleet looks less efficient on paper. A lower target can then be called the most that's feasible.

The state coalition reads the same law differently. They argue "maximum feasible" has to reflect the fleet that actually exists — EVs included — and that writing them out of the model understates how far the industry can already go^[1][5]. Bonta has called NHTSA's approach "a flawed, dramatically distorted analysis"^[5]. A court on the First Circuit will have to decide whose reading of a decades-old statute controls a 2031 target.

The Administration's Case: An Illegal Mandate, Ended

Transportation Secretary Sean Duffy frames the old rule as something closer to a workaround than a fuel-economy standard. In his telling, the Biden administration "illegally used CAFE standards as an electric vehicle mandate," forcing automakers to build cars that buyers didn't actually want^[16][7].

The department's pitch rests on affordability. Lower technology requirements mean a new vehicle costs about $1,300 less to build, by its estimate, and Americans save $138 billion collectively over five years^[6][7]. The rule also makes it harder for automakers to classify vehicles as trucks — which face looser standards than cars — and phases out the trading of compliance credits between manufacturers^[3].

Right-leaning coverage has mostly centered on the September 28 announcement rather than the lawsuit that followed, and it has largely repeated the department's $1,300 and "illegal EV mandate" framing as settled fact, with less attention to the fuel-cost side of the ledger the department's own analysis lays out^[3]. The administration has a real incentive here beyond the legal argument: removing federal pressure toward EVs and delivering lower sticker prices fulfills promises made to auto workers and buyers who prefer gas vehicles^[6].

The Coalition's Case: A Rule Built to Lose at the Pump

For the states, the case isn't really about electric vehicles as a technology. It's about what the fuel economy law is for in the first place: saving drivers money at the pump and cutting oil use. A rule that increases both, in their view, defeats its own purpose^[1][3].

Their complaint says NHTSA's method "tries to paper over nearly $220 billion in lost fuel savings" that drivers would have kept under the stricter 2024 standard — money the coalition argues will instead flow to oil companies^[1]. Environmental groups bringing the separate suit — the Center for Biological Diversity, Conservation Law Foundation, Environmental Defense Fund, Public Citizen and the Sierra Club — cite the same roughly $220 billion figure and stress the added carbon dioxide the rule is projected to generate for decades^[8][9][3].

Left-leaning and EV-focused outlets have generally framed the story as a "rollback," measuring the new rule against the Biden-era target as the baseline and giving less space to the sticker-price savings the department emphasizes^[14]. Notably, no New York Times or Washington Post coverage of the lawsuit itself turned up in this review. The coalition's states have their own climate and clean-car goals, and a weaker federal floor makes those harder and more expensive to hit — part of why Democratic-led states have challenged Trump-era rollbacks repeatedly in recent years^[1][4].

A Rule That Changes Every Few Years

Strip away the lawsuit, and there's a structural problem that doesn't depend on who's right about EVs: automakers can't plan around a target that moves with every administration.

In 2024, manufacturers were told to aim for 50.4 mpg by 2031 and required to improve about 2% a year^[3][4]. Now they're told to aim for 34.9 mpg, with increases capped at up to 1% a year, and the credit-trading system they used to manage compliance is being phased out^[3]. A company deciding today how much to invest in battery plants versus engine efficiency is betting on a number that could flip again with the next administration — and possibly with this lawsuit, win or lose^[3][16].

Coverage from outside the U.S. captured the dispute's outlines without fully explaining the statutory fight underneath it. Al Jazeera, running Reuters-style copy, quoted Bonta's "flawed" and "dramatically distorted" language but didn't lay out why the administration believes the law actually requires excluding EVs — leaving readers one side of an argument that has two^[5].

What the Trade-Off Actually Buys, and Who Pays

Set the lawsuit aside for a moment, and the physical outcome isn't really in dispute. By the Transportation Department's own estimates, the new rule produces cheaper new vehicles alongside more gasoline burned and more carbon dioxide emitted through the coming decades^[3]. That's not a prediction from critics — it's built into the government's own analysis.

The 2024 rule had projected roughly 64 billion gallons of gasoline saved through 2050^[11]. The new rule gives some of that back in exchange for lower prices today. Which side of that trade a reader favors is a judgment call the data itself doesn't make. What the First Circuit will decide is narrower: not whether that trade-off is wise, but whether a 50-year-old statute permits NHTSA to calculate it the way it did.