Corporate Average Fuel Economy

The Corporate Average Fuel Economy (CAFE) are regulations in the United States, first enacted by the U.S. Congress in 1975, and intended to improve the average fuel economy of cars and light trucks (trucks, vans and sport utility vehicles) sold in the US in the wake of the 1973 Arab Oil Embargo. Historically, it is the sales-weighted harmonic mean fuel economy, expressed in miles per US gallon (mpg), of a manufacturer's fleet of current model year passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8,500 pounds (3,856 kg) or less, manufactured for sale in the US. If the average fuel economy of a manufacturer's annual fleet of vehicle production falls below the defined standard, the manufacturer must pay a penalty, currently $5.50 USD per 0.1 mpg under the standard, multiplied by the manufacturer's total production for the U.S. domestic market. In addition, a Gas Guzzler Tax is levied on individual passenger car models (but not trucks, vans, minivans, or SUVs) that get less than 22.5 miles per US gallon (10.5 l/100 km).

Starting in 2011 the CAFE standards are newly expressed as mathematical functions depending on vehicle "footprint", a measure of vehicle size determined by multiplying the vehicle’s wheelbase by its average track width. A complicated 2011 mathematical formula was replaced starting in 2012 with a simpler inverse-linear formula with cut-off values. CAFE footprint requirements are set up such that a vehicle with a larger footprint has a lower fuel economy requirement than a vehicle with a smaller footprint. For example, the 2012 Honda Fit with a footprint of 40 sq ft (3.7 m2) must achieve fuel economy (as measured for CAFE) of 36 miles per US gallon (6.5 l/100 km), equivalent to a published fuel economy of 27 miles per US gallon (8.7 l/100 km), while a Ford F-150 with its footprint of 65–75 sq ft (6.0–7.0 m2) must achieve CAFE fuel economy of 22 miles per US gallon (11 l/100 km), i.e., 17 miles per US gallon (14 l/100 km) published. CAFE 2016 target fuel economy of 38.5 MPG (44 sq. ft. footprint) compares to 2012 actual advanced vehicle performance of Prius hybrid: 50 MPG, plug-in Prius hybrid: 95 MPGe and LEAF electric vehicle: 99 MPGe.

CAFE has separate standards for "passenger cars" and "light trucks", despite the majority of "light trucks" actually being used as passenger cars. The market share of "light trucks" grew steadily from 9.7% in 1979 to 47% in 2001 and remained in 50% numbers up to 2011. More than 500,000 vehicles in the 1999 model year exceeded the 8,500 lb (3,900 kg) GVWR cutoff and were thus omitted from CAFE calculations. More recently, coverage of medium duty trucks has been added to the CAFE regulations starting in 2012, and heavy duty commercial trucks starting in 2014.

The National Highway Traffic Safety Administration (NHTSA) regulates CAFE standards and the US Environmental Protection Agency (EPA) measures vehicle fuel efficiency. US Congress specifies that CAFE standards must be set at the "maximum feasible level" given consideration for:

1. technological feasibility;
2. economic practicality;
3. effect of other standards on fuel economy;
4. need of the nation to conserve energy.

Historically, the EPA has encouraged consumers to buy more fuel efficient vehicles, while the NHTSA expressed concerns that smaller, more fuel efficient vehicles may lead to increased traffic fatalities. Thus higher fuel efficiency was associated with lower traffic safety, intertwining the issues of fuel economy, road-traffic safety, air pollution, and climate change. In the mid 2000s, increasing safety of smaller cars and the poor safety record of light trucks began to reverse this association. Nevertheless, the on-road vehicle fleets in the US and Canada have the lowest overall average fuel economy among first world nations: 25 miles per US gallon (9.4 l/100 km) in the US, versus 45 miles per US gallon (5.2 l/100 km) in the European Union and higher in Japan (2008). Furthermore, despite general opinion that larger and heavier (and therefore relatively fuel-uneconomical) vehicles are safer, the US traffic fatality rate—and its trend over time—is worse than that of other first world nations.