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November 18, 2017  |  Login
CAFE Standard
The CAFE (Corporate Average Fuel Economy) standard is a regulation on fuel economy of cars sold in the U.S. It requires that a manufacturer’s entire fleet of cars and light trucks must have an average fuel economy above a set number; in 2008, this number was 27.5 mpg for passenger cars and 22.5 mpg for light trucks. Manufacturers who fail to meet the standard pay a fine per car sold in the U.S. The CAFE standard was created in 1975 in response to oil shortages, and the passenger car regulation has been at its current level since 1990. The CAFE standard is expected to increase again in 2011 when new regulations are implemented.

Notably, trucks weighing over 8,500 pounds are not subject to the CAFE standard, prompting the creation of the minivan and SUV in order to circumvent regulations. CAFE is based on production volume of regulated vehicles, so it does take into account the number of vehicles on the road for each fuel economy. Average fuel economies have increased notably since the introduction of the CAFE standard, though a number of manufacturers (notably BMW, Daimler-Chrysler imports and Volkswagen) regularly fail to meet it.

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