The Trump administration has embarked on a concerted drive to reduce vehicle costs for American consumers, as new data reveals average car prices have soared to an unprecedented high. This policy shift, centred on dismantling emissions regulations, comes amid significant economic pressure on households.
Record Prices and a Midwestern Tour
According to research firm Cox Automotive, the average transaction price for a new vehicle reached a staggering $50,326 in December 2025. This record sum has been propelled by strong consumer demand for more expensive trucks and SUVs, coupled with a declining number of affordable, entry-level models on the market.
Against this backdrop, key Trump administration figures concluded a two-day tour of the Midwest at the Detroit Auto Show. Transportation Secretary Sean Duffy, Environmental Protection Agency head Lee Zeldin, and U.S. Trade Representative Jamieson Greer visited a Ford truck factory and a Stellantis Jeep plant in Ohio, championing their efforts to improve affordability.
A Regulatory Rollback to Spur Sales
The administration's strategy focuses on aggressively reversing electric vehicle (EV) and fuel efficiency rules established under President Joe Biden. Secretary Duffy argued these changes "will bring car prices down and allow car companies to offer products that Americans want to buy." He insisted the policy was "not a war on EVs," but rather a move against using government mandates to encourage their purchase while "penalising combustion engines."
This approach has seen concrete action. Last year, President Trump signed legislation that eliminated a $7,500 EV tax credit, rescinded California's authority to set its own EV rules, and cancelled penalties for automakers failing to meet fuel efficiency requirements. The U.S. Department of Transportation has also proposed rolling back stringent Biden-era fuel economy standards.
Tariffs, Criticism, and Conflicting Claims
Automakers are simultaneously navigating steep new tariffs on imported vehicles and parts imposed by the Trump administration. Despite these added costs and the significant policy upheaval, U.S. new vehicle sales actually rose by 2.4% in 2025 to 16.2 million units.
Trade Representative Greer contended that car prices are now trending downwards and that any effects from tariffs "are not really getting down to the consumer." However, Democrats and environmental groups strongly dispute the administration's direction. Kathy Harris, clean vehicles director at the NRDC, warned that the oil industry would "rake in billions more from cash-strapped Americans" facing higher fuel costs.
The environmental trade-off is significant. While the USDOT estimates its proposed rule changes could reduce the average upfront cost of a vehicle by $930, it also projects the move would increase fuel consumption by up to 100 billion gallons through 2050, costing Americans an additional $185 billion in fuel expenses. The EPA is expected to finalise a rule soon that would eliminate vehicle tailpipe emissions requirements altogether.
