Tougher gas mileage rules for new cars and trucks have been approved by the Obama administration.
Automakers will now have to average 35.5 miles per gallon-- 10 miles per gallon higher than current standards.
"These historic new standards set ambitious, but achievable, fuel economy requirements for the automotive industry that will also encourage new and emerging technologies," Transportation Secretary Ray LaHood said.
Consumer are expected to spend about an extra $900 for each new car, but the Obama administration said the standards will end up saving consumers $3,000 in fuel costs in the long run.
The Environmental Protection Agency is also setting standards for tailpipe emissions.
It's the first time the agency is regulating greenhouse gas emissions from vehicles.
"This is a significant step towards cleaner air and energy efficiency, and an important example of how our economic and environmental priorities go hand-in-hand," EPA Administrator Lisa P. Jackson said.
Automakers have until 2016 to make the changes.