The CAFE Numbers Game

The federal government loves to get involved in automotive fuel economy. The official phrase is Corporate Average Fuel Economy (CAFE) and these dictates come from the Environmental Protection Agency (EPA) and from the Department of Transportation (DOT).  It was a few years ago that the Obama implemented new CAFÉ regulations that boosted the auto industry’s mandatory overall fleet mpg from 25.3 in 2010 to 34.1 by 2016. This was, by far, the biggest CAFE increase in decades. But now the administration is pushing the standards even higher.

Kayser Used Cars of Madison

Recently, President Obama announced a proposal to raise the auto industry’s mpg requirement to 54.5 by 2025. That’s a 59-percent increase over the 2016 standard and basically double the 2010 standard. As with the 2012–16 rules, this new proposal is quite complicated and is loaded with incentives that favor certain technologies and penalize others. Here are a few things to know:

Like the current 2012–16 rules, these new standards are based on the size of the vehicle. That means there’s a formula to calculate the required CAFÉ for each car based on its “footprint,” or the product of its wheelbase and track dimensions. In 2010, for example, the required CAFE mpg for the smallest car did not have to exceed 31, while even the largest car was required to hit 24 mpg. For 2025, the CAFÉ standards increase to much higher numbers; 61 small cars and and 46 for larger sedans. Truck mpg is calculated in similar fashion using a different formula. Because the CAFE requirements are based on size, every car company actually ends up with a different CAFE requirement.  This, of course, varies because each company sells a different mix of cars and trucks.

For every model year, each manufacturer must calculate the CAFE requirement for all its models and then determine the sales-weighted average for its actual mix. Therefore, says Kayser Used Cars of Madison, WI,  a company such as Chrysler, with its heavy share of large pickups and sedans, will have a lower CAFE requirement than Honda, which primarily produces smaller cars and crossovers.

Just in case you are wondering, CAFE mpg is very different from fuel economy label that is posted on the windshield of each car sold. That’s because the CAFE figures are based on different test conditions. The window-sticker numbers are calculated with emissions tests to produce mpg figures that better-match real-world driving. In general, the combined mpg on a vehicle’s label is some 20 percent lower than the CAFE mpg.