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22nd of January 2018

Automotive



CAFE: A Brief Guide to the Corporate Average Fuel-Economy Law

January 3, 2018 at 12:03 pm by Csaba Csere | Illustration by Jeff Xu

CAFE: A Brief Guide to the Corporate Average Fuel-Economy Law

CAFE: A Brief Guide to the Corporate Average Fuel-Economy Law

From the December 2017 issue

Enacted by Congress in 1975, the Corporate Average Fuel Economy law was designed to reduce gasoline use by improving fuel efficiency. Starting in 1978, cars had to achieve 18.0 mpg in testing. Truck standards came a year later, requiring 17.2 mpg from two-wheel-drive vehicles and 15.8 mpg from four-wheel-drivers. The current regulation would raise these targets to 55.3–56.2 mpg for cars and 39.3–40.3 for trucks by 2025, although the Trump administration is reviewing that plan.

Slow Build: The CAFE bogey was intended to rise steadily, but it hit 27.5 mpg for cars in 1985 and essentially remained there for 25 years. Trucks stagnated around 20 mpg for 20 years.

Optimism Meets Reality: Congress required each new car’s mileage to be posted on its window sticker, hoping that buyers would select more efficient vehicles. But the lab-measured results were way higher than anyone was getting in the real world. In the ’80s, mileage numbers on the label were trimmed in an attempt to bring them closer to reality, but even that wasn’t enough. In 2008, the EPA revised fuel-economy testing to improve label-number accuracy. For example, a 1984 Cadillac Seville diesel was said to achieve 22 mpg city and 36 highway in period. Apply the ’08 adjustment and those numbers fall to 18 and 26 mpg.

Size Matters: Originally, every company’s CAFE target was the same. In 1980, this was great for small-car importers but not so good for Detroit iron. Starting with 2011 models, mileage requirements were determined by a vehicle’s “footprint,” basically a vehicle’s average track width times its wheelbase. Bigger vehicles have a lower mileage target, and each manufacturer’s CAFE requirement is based on the vehicle mix it sells.

A Bridge Too Far: When President Obama announced in 2011 that the industry fleet standard would rise to 54.5 mpg by 2025, it was DOA. That widely touted target assumes buyers will purchase more cars and fewer trucks in 2025 compared with today. In fact, the market is moving in the other direction. Even if the 54.5-mpg bogey were implemented, that number is based on the highly inflated CAFE test numbers of 1978. Translated into today’s label numbers, a 54.5-mpg vehicle would have a window sticker with 38 mpg city and 55 mpg highway.

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