October 1, 2026 - New CAFE Rules Turn Trucks Into Cars

This is the Telemetry Transportation Daily for October 1, 2026, and I'm Sam Abuelsamid, Vice President of Market Research for Telemetry. 

In motorsports, engineers will tell you that you have to read the technical regulations twice, once to see what they say, and then a second time more thoroughly to see what the rules don't say. It's those gaps that provide the opportunity to get ahead of the competition. Over the last several decades, we've seen a clear trend of drivers moving from traditional cars to SUVs and crossovers. The market share of pickups has actually remained relatively flat at about 20% or less since about 1980. 

The problem lies in the way the corporate average fuel economy or CAFE rules were written. There were separate thresholds for light trucks and passenger vehicles. In order to minimize the impact of the rules, automakers started putting more emphasis on utility vehicles that were classed as light trucks and marketed those vehicles successfully. Thus, we had small cars like the Chrysler PT Cruiser classed as light trucks to improve the average for the truck fleet, while large crossovers like the Nissan Pathfinder got lumped in with cars. 

The Trump administration's rollback of CAFE standards includes a rule adjustment that may have an impact on many utility vehicles and cause them to shift from a truck classification to a car. The previous rules for SUVs were based on the gross vehicle weight rating, with those under 6,000 pounds classed as cars while those over that weight being trucks. 

The new rules shift from GVWR, which is the vehicle weight plus payload, to light-duty work factor or LDWF. The LDWF is the sum of the towing capacity and payloadm and it has to exceed 8,500 lbs to be classed as a truck. Even larger midsize utilities that are currently classed as trucks rarely have more than 5,000 pounds of towing and about 1,000 pounds of payload, meaning they will now be lumped in with cars. While the CAFE thresholds have been reduced, some of these vehicles might need a bump in efficiency to still pass. For now at least, the administration has indicated it will not be imposing any CAFE fines, but that could change in the future. All of this piles on the uncertainty for an industry that hates uncertainty.

Thanks for listening.