The EPA has concluded that a landmark Obama-era effort to cut vehicle greenhouse-gas emissions is too aggressive and agrees with automakers that the standards should be revised, according to people familiar with the matter.

The agency has completed a draft decision outlining the rationale for easing fuel efficiency regulations for model-year 2022-2025 cars and light trucks, two people said. Bill Wehrum, chief of the agency’s Office of Air and Radiation, plans to meet with environmental regulators in California next...