THE MORNING RANT: With the End of Biden-Era Corporate Average Fuel Economy Standards, the Era of CAFE Credit Trading is Also Over

The Trump administration continues to restore freedom to the American automobile market. Under authorization established by Congress, Transportation Secretary Duffy just released the “Freedom Means Affordable Cars” initiative, which reversed Biden’s corporate average fuel mandates ("CAFE"). It also eliminated regulations that created market distortions that were costly to consumers. Those former regulations were all in service to the climate hoax, of course.

Mr. CBD discussed this news earlier this week, pointing out that the 50-mpg goal of Biden/Buttigieg was unachievable, and that its un-achievability was in service to the left’s war on the legacy auto industry and to consumer choice.

I would like to point out two other major consumer-friendly results of this initiative:

1) Re-setting of Vehicle Classification: Current CAFÉ regulations have counter-intuitively incentivized auto manufacturers to add weight and off-road functionality to cars so as to classify them as “light trucks” and evade the CAFÉ regulation for cars (which are stricter than for light trucks.) At the same time, there has also been an incentive to build larger and heavier “light trucks,” because the bigger the vehicle’s footprints, the lower the CAFÉ requirement for the “truck.”

Aside from this creating incentives that were contrary to the goal of CAFE, it also made cars more expensive and less fuel efficient than they would be if consumers could just buy whatever car or truck they wanted.

2) Elimination of CAFE Credit Trading: The National Highway Traffic Safety Administration ("NHTSA") created a market for the trading of CAFE credits, which has served the purpose of awarding EV manufacturers (primarily Tesla and Rivian) credits they can sell to other manufacturers that could not achieve the mandated CAFE fleet requirement.

This is a huge consumer-friendly development. Ford spent $800 million on CAFE trading credits in 2025 alone, which amounted to about $400 per new gasoline-powered car it sold. To put this another way, if you bought a new Ford Explorer in 2025, about $400 of your purchase price was remitted by Ford to Tesla to buy CAFE credits. The same applies if you bought a car from other mass-market auto companies such as Toyota, Honda, and Dodge.

While I am a huge fan of Elon Musk for buying Twitter and restoring free speech - as well as for Starlink, DOGE, SpaceX, etc - I resent having been forced to contribute to Tesla’s revenue stream when I’ve purchased new gasoline-powered cars.

Tesla Made $1.99 billion by selling regulatory credits in 2025 (some of this was from Europe and elsewhere, and this also includes other credit markets such as California’s ZEV credits.) This all went to the bottom line. Tesla’s net income in 2025 was $3.8 billion. It would have been below $2 billion without the sale of those regulatory credits.

Rivian’s staggering losses would have been even worse if it weren’t for the money that was paid by legacy auto manufacturers to Rivian for its CAFE credits. Over the past two years, Rivian has received over $500 million from the sale of regulatory credits.

In summary, Secretary Duffy states that this regulatory relief will:

• Give automakers the flexibility to manufacturer cars the public wants to buy.

• Reduce the average cost of a new vehicle by $1,300 for American families.

• Save the American people $138 billion over the next five years.

• Prevent more than 300,000 serious injuries and save 1,900 lives by encouraging new car sales.

Exploding EVs

Since I’m discussing EVs…

I’ve been remiss lately in covering electric vehicle fires, which are still an ongoing problem. Thanks to a reader named Javier who sent me this link:

“Adams County House Fire Started from Electric Vehicle Battery in Garage” [Fox 3 – Denver]

A north Denver home caught fire on Friday after an electric vehicle battery sparked in the garage, prompting firefighters to warn people to properly care for those batteries so the same doesn’t happen in their homes.

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Deputy Fire Chief James Wood said a mom and daughter were inside when it began. “The daughter smelled smoke; she sent her outside. When they came out, they noticed that the garage was on fire,” Wood said. He said they believe the fire started near the hood of an electric vehicle in the garage. It then spread up the garage wall into the attic and ran the length of the house.

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Houses on both sides of the fire suffered some damage as well, but fortunately there was no significant loss.

I would be extremely upset if my house were damaged because a neighbor’s runaway thermal EV fire couldn’t be contained.

The photo above is the subject house in Adams County, with an EV “charging” in its garage.

Other Stuff I’m Writing About

My latest piece at the The American Spectator has been published. “How to Actually Save Local Newspapers; The Chattanooga Times Free Press could turn out to be the model for other newspaper turnarounds” contrasts two recent newspaper reorganizations:

1) McClatchy’s Miami Herald slashed headcount in the local newsroom in favor of wire services and national news & politics.

2) The new owner of Chattanooga’s newspaper rid it of layers of left-wing editors as well as its NY Times wire service subscription, in favor of expanded local news coverage.

There have been several more major newspaper reorganizations in recent weeks, but one is noteworthy for going in an entirely different direction. The money-losing Chattanooga Times Free Press was just bought by Craig Fuller. Fuller is the publisher of Freightwaves and several other successful publications that focus on business, transportation, and leisure activities. He quickly dismissed most of the rabidly left-wing editors at the Chattanooga Times Free Press, shrank the editorial page, fired the New York Times wire service, and committed to putting only local news on the front page. He also hired new writers to expand coverage of sports and local business. National news (from the AP only) is now relegated to an inside page.

This piece is not behind a paywall. I’d be honored if you’d give it a read.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 11:00 AM

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