What is CAFE?

The Corporate Average Fuel Economy (CAFE) program was intended to help reduce American dependence on foreign oil by producing more fuel-efficient vehicles. The program requires each automaker to meet government-set mileage targets (CAFE standards) for all its car and light truck fleets sold in the United States each year. The complex program requires automakers to calculate the fuel economy of all vehicles actually sold. It is not a calculation of what automakers offer for sale, but what consumers buy.

History of CAFE

When the Arab oil embargo prompted crude oil prices to triple in the mid-1970s, Americans clamored for relief at the pump and policymakers turned their attention to automobile fuel efficiency. In 1975, Congress passed the Energy Policy and Conservation Act, requiring automakers for the first time to build and sell vehicles that met fuel economy standards. It would quickly become one of the most far-reaching and complex regulations ever placed on the industry, affecting everything from product mix, design and safety to decisions about where to locate the plants that build them. The CAFE standards took effect in 1978 with a requirement of 18 miles per gallon (mpg) for cars. The standard increased each year until 1985 when it reached the current 27.5 mpg. Light truck standards were set at 17.2 mpg for the 1979 model year and are currently 20.7 mpg. The standard does not require each vehicle to achieve the standard, but rather requires the sales-weighted average fuel economy of the fleet of cars and trucks the manufacturer sells to achieve the standard.

The National Highway Traffic Safety Administration (NHTSA) is responsible for establishing and amending average fuel economy standards for manufacturers of passenger cars and light trucks. A model's fuel economy for CAFE is determined in a laboratory-controlled test.

<< Back to CAFE index | Next >>