11.7 Vehicle Efficiency Standards

Most internal combustion engine (ICE) vehicles measure fuel efficiency in miles per gallon (mpg). A higher mpg value means the vehicle can travel farther using one gallon of fuel.

Today, fuel efficiency is an important part of vehicle design, but that was not always the case. Before the oil crisis of the 1970s, fuel economy was not a major concern for many automakers or consumers. In fact, fuel efficiency had declined over time. The 1908 Model T got about 21 mpg, while the average American car in 1973 got only about 12 mpg.

Because of rising oil prices and concerns about dependence on foreign oil, Congress passed the first Corporate Average Fuel Economy (CAFE) standards in 1975.

What are the CAFE Standards?

CAFE standards were created to improve the fuel economy of cars and light trucks sold in the United States. The goal was to encourage automakers to build more fuel-efficient vehicles and reduce overall fuel use.

The word corporate average is important. CAFE standards apply to the average fuel economy of all the vehicles a manufacturer sells, not to every single vehicle by itself. This means an automaker can still sell some less-efficient vehicles as long as those are balanced by more-efficient models in the rest of the fleet.

For example, a company might sell:

• many smaller, fuel-efficient cars
• some larger vehicles with lower fuel economy

If the average for the full fleet meets the standard, the company is in compliance.

Important Notes

CAFE standards originally focused on cars and light trucks. They did not apply in the same way to heavy-duty vehicles. Some trucks used for work purposes were treated differently from passenger cars, which is one reason truck efficiency rules developed differently over time.

CAFE Timeline

• 1978: The first CAFE standard began at 18 mpg
• 1990: The standard gradually increased to 27.5 mpg
• 1990 to 2010: The standard stayed at 27.5 mpg
• 2011 to 2020: Standards increased significantly, rising from about 30 mpg to 42.4 mpg

These changes pushed automakers to improve engines, reduce vehicle weight, and develop hybrid and electric vehicles.

Interactive Data

The chart below from the Alternative Fuels Data Center shows historical fuel economy data and trends in vehicle efficiency from 1978 with estimates into the future. Use it to explore how fuel economy has changed over time.

The Vehicle Fuel Efficiency (CAFE) Requirements by Year graphic with descriptive text is available from the U.S. Department of Energy's Office of Critical Minerals and Energy Innovation site.

How Corporate Average Fuel Economy Works

CAFE standards are based on the average fuel economy of a company’s fleet.

For example, suppose a manufacturer sells:

• 1,100 cars that get 50 mpg
• 400 cars that get 22 mpg

The average fleet fuel economy would be:

$$\begin{gathered} \frac{\left(1100\times 50\right)+\left(400\times 22\right)}{1100+400} \\ =\frac{5500+8800}{1500} \\ =42.5\text{ mpg} \end{gathered}$$

So even though not every vehicle gets more than 42 mpg, the company’s average fleet fuel economy is 42.5 mpg.

Electric Vehicles and CAFE Standards

Hybrid vehicles, plug-in hybrid vehicles, and electric vehicles have helped manufacturers improve their fleet fuel economy. Because these vehicles use less gasoline, or no gasoline at all, they raise the average efficiency of the vehicles a company sells.

This means automakers can improve their CAFE performance by offering more:

• hybrid vehicles
• plug-in hybrid vehicles
• electric vehicles

As a result, fuel economy standards have played an important role in encouraging the growth of advanced vehicle technologies.