EPA administrator Scott Pruitt has criticized the Obama-era targets as excessively strict and potentially damaging to auto sales.
The Environmental Protection Agency is reportedly preparing to announce new fuel-efficiency standards, lowering future targets from levels set before President Donald Trump arrived in the White House.
The Obama administration had worked with California to harmonize federal fuel-efficiency regulations with the state's more ambitious goals, raising the bar to 55 mpg by 2025.
The EPA is now expected to drop the Obama-era plan and replace it with a much lower goal, unnamed sources have told the Los Angeles Times.
EPA administrator Scott Pruitt has criticized the 55-mpg goal could have a negative impact on US automakers, as customer preferences currently trend toward SUVs.
California currently maintains a separate, more strict set of environmental regulations that go above and beyond the federal government's rules. Pruitt has also hinted at a potential legal showdown California, threatening to bar individual states from implementing their own fuel efficiency standards.