CAFE Standards

One of the most impressive efficiency successes in modern memory is the result of the federal Corporate Average Fuel Economy (CAFE) standards established in 1975. They stipulated that the average fuel economy for new cars, sport utility vehicles (SUVs), and light trucks would be 25 miles per gallon (mpg) by model year 1985—up from 18 mpg for model year 1978, a nominal improvement of nearly 50%. (CAFE standards are calculated by a production-weighted average of mileage ratings across a manufacturer’s fleet; they are not based on data from actual on-road performance.) The U.S. Department of Transportation specified an average for light trucks of 20.7 mpg. Automakers complied, dramatically improving the fuel economy of the nation’s light-duty vehicle fleet, reducing dependence on imported oil, improving the nation’s balance of trade, and reducing carbon dioxide (CO2) emissions.

In December 2007, Congress passed an updated CAFE law mandating that new cars, SUVs, and light trucks together average 35 mpg by 2020, an increase of 40% from the previous 25 mpg average. As of 2014, manufacturers were meeting standards of 34.2 mpg for passenger cars and 26.2 mpg for light trucks.

The most recent federal efficiency standards are projected to increase fuel economy to the equivalent of 54.5 mpg for cars and light-duty trucks by model year 2025, while also reducing CO2 emissions.

The most recent federal efficiency standards, finalized by the U.S. National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) in 2012, are projected to increase fuel economy to the equivalent of 54.5 mpg for cars and light-duty trucks by model year 2025, while also reducing CO2 emissions. According to the NHTSA, the 2012 standards and other current federal programs are expected to save drivers about $1.7 trillion at the gas pump and reduce U.S. oil consumption by 12 billion barrels.

Higher standards are also on the way for medium- and heavy-duty vehicles. The NHTSA and the EPA issued Phase 1 fuel efficiency and greenhouse gas (GHG) standards in 2011 for model years 2014–2018 to reduce the fuel consumption and GHG emissions of medium- and heavy-duty vehicles. They estimate this will save $50 billion in fuel costs during the life of the program.

In 2015, the NHTSA and the EPA jointly proposed standards for such vehicles that would cover model years 2021–2027 and “apply to semi-trucks, pickup trucks, and all types and sizes of buses and work trucks. Standards for trailers would start in model year 2018.”

According to the agencies, the proposed changes “are expected to lower CO2 emissions by approximately 1 billion metric tons, cut fuel costs by about $170 billion, and reduce oil consumption by up to 1.8 billion barrels over the lifetime of the vehicles sold under the program. These reductions are nearly equal to the greenhouse gas emissions associated with energy use by all U.S. residences in one year.”

Developments in automotive technology have had a profound effect on the energy sector. The electronics and computer revolutions have made possible very small sensors and integrated circuits. Many of these are used in vehicles to continuously monitor and optimize engine and drivetrain performance. Concurrently, innovations such as tires with lower rolling resistance, more efficient multi-speed transmissions, turbocharged and/or multi-valve engines that get more horsepower out of fuel, growing numbers of front-wheel-drive vehicles, and greater electrification of drivetrains such as with hybrid electric vehicles, among many other advances, have led to improved fuel efficiency and to more power, better control, and lower emissions.