U.S. finalizes emissions standards for new vehicles: Save $420 billion in fuel costs by 2050

The Wall Street Journal reported on December 21 that the Biden administration raised fuel efficiency standards for passenger cars and light trucks as part of its efforts to mitigate climate change and promote the automotive industry's move to electric vehicles.

The U.S. Environmental Protection Agency (EPA) said Monday it would require automakers to meet their fleet goal of an average of 55 miles per gallon by 2026, higher than the 43-mile standard set during the Trump administration. The new standard will take effect from the 2023 model and will be raised year by year. According to the EPA's estimates, these standards would reduce emissions nationwide by nearly 2 percent.

The EPA said the new rules would save U.S. drivers $210 billion to $420 billion in fuel costs by the end of 2050. Even taking into account the higher purchase price, each car buyer will still save about $1,000 over the life of the vehicle starting in 2026, the EPA said.