Prospects for meeting the corporate average fuel economy standards in the U.S.

Abstract

Efforts to improve vehicle transportation efficiency and curb associated environmental emissions had led to the Corporate Average Fuel Economy (CAFE) standards introduced in 1975 for passenger cars and light trucks. The National Highway Traffic Safety Administration has phased in new standards that require an average combined fleet-wide fuel economy of 48.7–49.7 miles per gallon by 2025. The new legislation has the potential to reduce overall U.S. emissions by close to 6% should the 2025 goals be attained. The goal of this study was to assess the potential for CAFE to achieve the desired average fleet fuel economy goals set forth in the U.S., and evaluate its past effectiveness at reducing actual on-road fuel consumption and associated emissions and environmental impacts. The possibility of the 2017–2025 CAFE standards to be more or less successful than the 2011–2016 standards at meeting fuel economy goals were evaluated together with strategies that auto manufacturers would most likely use to meet the 2017–2025 CAFE standards. The study analyzed transportation efficiency trends, new vehicle sales data, fines paid to date by vehicle manufacturers, and their future projection models. Results demonstrate the effectiveness of the CAFE policy in controlling vehicle fleet efficiency in the U.S. However, the possibility of automakers adapting to presented changes quickly to meet the increasingly strict CAFE standards is unlikely, and cumulative annual fines paid by the industry may reach the order of $700 million by 2025 should current trends continue.