The average fuel consumption of light vehicles can be reduced several-fold by the use of currently available technology. This conclusion is based on a simple computer model which has been found to reproduce the fuel economies of some existing energy-efficient passenger cars. It is shown, however, that the associated life cycle cost savings for new car buyers are too small to generate sufficient market pressure to realize more than a fraction of the available fuel' savings. The potentials of various public policy tools for helping to overcome this market inertia are discussed. The importance of automotive fuel efficiency improvements in facilitating a graceful transition to the post-fossil-fuel era is also briefly considered using the example of Europe.