Detroit just got more room to sell what it does best. Fuel-economy rules have dictated the economics of pickups and large SUVs for decades, forcing automakers to balance their most profitable vehicles against tougher mileage targets. This week, that equation changed.
Washington resets the mileage target
The Transportation Department finalized a fleetwide average of 34.9 miles per gallon by 2031, down from 50.4 mpg under Biden-era rules. The 2024 model year average was 30.1 mpg.
The government's own estimate is that the change cuts vehicle costs while raising fuel use and emissions for decades.
The Transportation Department says the rule trims the average new vehicle price by $1.3K and saves Americans $138B over five years.
Automakers' technology costs drop by $60.6B through 2031, or roughly ~$1.29K per vehicle. General Motors alone sees a $20.4B reduction, against the $31.7B the 2024 rules were projected to cost it.
Automakers back it, environmentalists object
The Alliance for Automotive Innovation, which represents General Motors, Ford, Toyota, Volkswagen, and Hyundai, called the move a correction. Its chief executive said the old rules were out of step with customer demand.
"NHTSA made the right call to better align fuel economy standards with the law and current market conditions."
John Bozzella, Alliance for Automotive Innovation
The Sierra Club vowed to fight the rollback. Environmental groups estimate cars could emit 22k more tons of carbon dioxide per year in 2035 than under the prior rules.
The timing complicates the affordability pitch. Gasoline averaged $4.47 on Monday, up from $3.13 a year earlier, as the Iran conflict disrupts fuel flows. The average new car sold for $50.09K in August, per Kelley Blue Book.
Buyers are moving the other way
High pump prices are pushing shoppers toward hybrids and small cars, where Asian brands lead. Cox Automotive forecasts Ford's US sales down 8.8% through three quarters, with share falling to 12.5% from 13.4%.
GM's sales are projected to drop 6.2%, with share slipping to 16.7% from 17.4%. The Detroit three together are expected to hold just over 36% of the US market, their lowest on record.
Stellantis bucks it, with sales up 2.8% year to date and share rising to 7.8%. Cox also expects Hyundai Motor Group to outsell Ford in the third quarter.
Electric vehicles are retreating. EVs made up 5.7% of new-vehicle sales in August, down from 7.4% for all of 2025, according to Cox Automotive data.
Where the exposure actually sits
The rollback helps whoever sells the most high-margin trucks and large SUVs. GM generates roughly $153.8B from its North America segment, and Ford pulls about $145.9B from Ford Blue plus $64.8B from Ford Pro.
Valuation already reflects skepticism. GM trades near 5.9x forward earnings with a $72.5B market cap, and management guides 2026 adjusted automotive free cash flow to $9.5B to $11.5B.
Buybacks have shrunk the share count from 1.13B in the third quarter of 2024 to 0.91B in the second quarter of 2026. GM has also booked $10.9B of EV-related charges since the second half of 2025.
Competition is the offsetting risk. Global carmakers squeezed by Chinese rivals abroad are targeting the US, and GM's finance chief says the market may get tougher. He also warned that US climate policy could stay volatile for the next five years. That cuts against treating this rule as permanent.
The market has already split the field, with Ferrari and GM trading higher this year while Stellantis and Tesla have fallen. GM reports third-quarter results on Oct. 20, offering the next test of whether friendlier rules can help Detroit sell more of the vehicles it makes the most money on.
