WASHINGTON — The Trump administration said Wednesday it is eliminating a regulatory wrinkle that boosted the miles-per-gallon ratings of electric vehicles, which helped automakers meet federal fuel economy targets.

The announcement follows an appeals court decision in September and a complicated Biden-era standoff between automakers and environmental groups.

The move is unlikely to have much impact on the auto industry in the short term, though it could affect environmental standards for cars and trucks under future administrations.

The action by Trump's Energy Department will actually accelerate a change environmentalists sought under former President Joe Biden. Groups like the Natural Resources Defense Council and the Sierra Club lobbied the Biden administration to eliminate the so-called "fuel content factor," a multiplier that inflated on-paper mpg ratings for EVs. Those ratings figure into fleetwide averages under federal Corporate Average Fuel Economy rules.

The NRDC and Sierra Club jointly argued in a 2021 petition to the DOE: "Excessively high imputed fuel economy values for EVs means that a relatively small number of EVs will mathematically guarantee compliance without meaningful improvements in the real-world average fuel economy of automakers' overall fleets.”

Fuel content factor is part of a broader calculation known as petroleum equivalency factor, which is a method for setting mpg values for vehicles that do not use gasoline. The first PEF proposal came in 1980 under former President Jimmy Carter.

The Biden administration initially proposed immediately eliminating the fuel content factor multiplier in a 2023 draft rule, but the auto industry lobbied against that change. A final, compromise rule issued in 2024 softened how drastically EV fuel economy ratings would be downgraded and established a multiyear phaseout period to placate automakers.

The industry's top lobbying group in Washington called that change "positive."

However, a panel of judges for the 8th Circuit Court of Appeals in St. Louis nullified the rule in September 2025. Circuit Judge Duane Benton wrote in his decision that the Biden Energy Department exceeded its statutory authority by allowing a phase-out period for the pre-existing fuel content factor, largely because the multiplier was illegal in the first place.

On Wednesday, in accord with that court decision, Trump's Energy Department signaled it would soon eliminate the fuel content factor and proposed additional revisions to the broader PEF calculation in later rulemaking efforts.

The Trump administration has already gutted fuel economy regulations for the auto industry, so an impending downgrade in mpg ratings for electric vehicles is unlikely to affect compliance with federal rules.

Trump and the GOP-controlled Congress have also eliminated fines for automakers that fail to meet targets.

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