New vehicles sold in the US will have to average about 38 miles per gallon (mpg) of gasoline in 2031 in real-world driving, up from about 29mpg this year, under new federal rules unveiled on Friday by the Biden administration.

The final rule will increase fuel economy by 2% a year for model years 2027 to 2031 for passenger cars, while SUVs and other light trucks will increase by 2% a year for model years 2029 to 2031, according to requirements released by the National Highway Traffic Safety Administration.

The final figures are below a proposal released last year – and some environmental groups expressed disappointment.

Administration officials said the less stringent requirements will allow the auto industry flexibility to focus on electric vehicles, adding that higher gas-mileage requirements would have imposed significant costs on consumers without sufficient fuel savings to offset them.

Joe Biden has set a goal that half all of new vehicles sold in the US in 2030 will be electric, part of his push to fight the climate crisis. Gasoline-powered vehicles make up the largest single source of US greenhouse gas emissions.

The 50% sales figure would be a huge increase over current EV sales, which accounted for 7.6% of new vehicle sales last year.

Even as he promotes EVs, Biden needs cooperation from the auto industry and political support from auto workers, a key political voting bloc, as the Democratic president seeks re-election in November. The United Auto Workers union has endorsed Biden but has said it wants to make sure the transition to electric vehicles does not cause job losses and that the industry pays top wages to workers who build EVs and batteries.

Biden’s likely opponent, Donald Trump, and other Republicans have denounced Biden’s push for EVs as unfair for consumers and an example of government overreach.

The new standards will save almost 70bn gallons of gasoline through 2050, preventing more than 710m tonnes of carbon dioxide emissions by mid-century, the Biden administration said.

“Not only will these new standards save Americans money at the pump every time they fill up, they will also decrease harmful pollution and make America less reliant on foreign oil,” the transportation secretary, Pete Buttigieg, said in a statement. “These standards will save car owners more than $600 in gasoline costs over the lifetime of their vehicle.”

The highway safety agency said it had sought to line up its regulations so they match new Environmental Protection Agency rules that tighten standards for tailpipe emissions. But if there are discrepancies, automakers will probably have to follow the most stringent regulation.

Dan Becker at the Center for Biological Diversity, an environmental group, slammed the new rules as inadequate.

The highway safety agency is supposed to set strong standards for gas-powered vehicles, he said, “but instead it sat on its tailpipes, leaving automakers free to make cars, SUVs and pickups that will guzzle and pollute for decades to come and keep America stuck on oil”.

The administration “caved to automaker pressure, with a weak rule requiring only a 2% improvement” a year in fuel economy, Becker said, adding that the rule falls short of the agency’s own requirement to set fuel-economy standards at the maximum technologically feasible level.