California, 24 states sue US Transportation Department over fuel economy rollback

October 2, 2026 at 10:23 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

California, New York and 24 other states, cities and counties sued the US Transportation Department on Friday over its decision to finalize sharply lower vehicle fuel economy standards. The revised standards cut the fleetwide average to 34.9 miles per gallon by 2031, down from 50.4 mpg under Biden. A coalition of environmental and consumer groups filed a separate lawsuit challenging the new rules.

Key Facts

The Transportation Department finalized rules on Monday requiring a fleetwide average of 34.9 miles per gallon by 2031, down from 50.4 miles per gallon under Biden.
The states said the National Highway Traffic Safety Administration ignores nearly $220 billion in lost fuel savings that drivers would have saved under the previous standards.
The department said the rule would increase US gasoline consumption through 2050 by 4.6% — about 121 billion gallons — compared to the Biden rules.
The rules will end credit trading among automakers in 2028, which previously was a significant source of income for EV manufacturers Tesla and Rivian.

The Lawsuit

California Attorney General Rob Bonta said the new rules violate requirements that the standards be set at the maximum feasible level. The states — which include Arizona, Colorado, Connecticut, Massachusetts, Michigan, New Jersey, and Washington — as well as the District of Columbia, New York City, Chicago and Denver, filed suits in the US Court of Appeals for the First Circuit. The states said the Trump administration is ignoring the presence of millions of EVs, leading to a flawed, dramatically distorted analysis of the maximum feasible fuel economy level. A coalition of environmental and consumer groups also filed a separate lawsuit challenging the new rules.

Rule Impact

The Transportation Department said the regulation reduces manufacturers' average cost per vehicle to comply by $1,289 but increases fuel costs by more than $1,600 over the life of the vehicles. Environmental groups said the 2031 vehicles would be less efficient than the current fleet. Transportation Secretary Sean Duffy defended the rule, saying the agency would let auto manufacturers produce the cars that fit families' needs at a lower price. US drivers have paid sharply higher fuel prices since the start of the US-Israeli war with Iran at the end of February.