San Francisco City Attorney and Attorneys General file suit challenging federal rollback of fuel economy standards

San Francisco, CA (October 2, 2026) — San Francisco City Attorney David Chiu announced today that San Francisco joined a coalition of 26 states, counties, and cities in filing a lawsuit against the National Highway Traffic Safety Administration (NHTSA) challenging its final rule that weakens corporate average fuel economy (CAFE) standards for new passenger cars and light trucks. Historically, NHTSA’s standards have reduced consumer costs by improving fuel efficiency for vehicles, placed downward pressure on gas prices by reducing fuel consumption, protected the U.S. economy from global oil shocks, and reduced pollution from tailpipes and refineries. However, NHTSA’s final rule published September 28, 2026, significantly weakens fuel economy standards and hurts consumers and the planet.

The Plaintiff coalition lawsuit argues that NHTSA’s new rule is contrary to law and that NHTSA contravenes its mandate from Congress to set fuel-economy standards at their “maximum feasible” level.

“Across the country, Americans are struggling with sticker shock at gas pumps, as well as rising pollution,” said San Francisco City Attorney David Chiu. “San Francisco and California face rising fuel costs, health impacts from air pollution, and the consequences of extreme weather conditions. Yet this federal agency is attempting to roll back fuel‑economy standards, which will exacerbate pollution, force consumers to pay even more at the pump, and push the nation backward on clean transportation. This final rule is unlawful, ignores science, and fails to protect our communities and the environment.”

“The President started a war that has created volatility in oil markets, disrupted global energy supplies, and left families and businesses paying the price at the pump. Yet, the Trump Administration is attempting to gut fuel economy standards and force Americans to spend billions more on gas while poisoning the air in our communities,” said Attorney General Bonta. “Let’s be clear: The Trump Administration is doing this to line the pockets of their Big Oil donors. California will not stand idly by, we will defend fuel economy standards that keep costs down, protect public health, and build a better, sustainable future.”

Background
In 1975, Congress enacted the Energy Policy and Conservation Act, which requires NHTSA to establish “maximum feasible” fuel economy standards for new vehicles that reflect technological feasibility, economic practicability, the effect of other motor vehicle standards of the government, and the need to conserve energy. To set fuel economy standards, NHTSA first models the current fleet’s performance and then considers additional actions manufacturers could take to improve their fuel economy in future model years. In past rulemakings, NHTSA started from a realistic baseline fleet that included the millions of electric vehicles that already existed on our nation’s highways and roads and based fuel-economy standards on how additional technological improvements to gas-fueled cars could make that fleet more efficient. NHTSA never based fuel-economy standards on “mandating” automakers to produce more electric vehicles or requiring consumers to buy them.

The final rule misinterprets NHTSA’s statutory authority and improperly forces the agency to ignore the presence of millions of electric vehicles in the nation’s existing fleet, leading to a flawed, dramatically distorted analysis of the “maximum feasible” fuel economy level that the auto industry can achieve. NHTSA’s novel reinterpretation of the law renders the federal fuel-economy program toothless, unable to protect consumers against rising gas prices or the ongoing global oil shock from foreign wars.

NHTSA also relies on defective analyses of vehicle affordability and sales, fleet turnover, fuel savings, and vehicle safety to make a profoundly harmful and destructive rule look net-beneficial to society. For example, NHTSA tries to paper over nearly $220 billion in lost fuel savings, money that drivers would have saved at the pump under the previous fuel economy standards, which will instead benefit oil companies. It also refuses to consider hundreds of billions of dollars in future damages from climate change-driven disasters, flouting the best science and research and effectively setting these costs at zero.

Defying a longstanding and repeatedly affirmed Congressional mandate, NHTSA asserts that the United States does not need to conserve energy after all — treating the high gasoline prices and the instability of global oil markets as an acceptable trade for fossil fuel companies’ profits. NHTSA’s rule will also end the CAFE credit trading program in 2028, which will significantly harm electric vehicle industries that employ Americans and support the economy.

In today’s lawsuit, the coalition alleges that NHTSA’s final rule is arbitrary and capricious and violates the Administrative Procedure Act and the Energy Policy and Conservation Act. Plaintiffs are asking the Court to rescind the final rule and reinstate prior fuel-economy standards.

San Francisco joins the attorneys general of California, Arizona, Colorado, Connecticut, Delaware, Hawai‘i, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia, as well as the City of Chicago, the City and County of Denver, and the City of New York in this lawsuit.

The case is State of California, et al. v. National Highway Traffic Safety Administration, et al., United States Court of Appeals for the First Circuit. View a copy of the petition.