Ask Autosavant: Who or what is CAFE?

Sometimes, with our minds almost completely immersed in the car business, we forget that not everyone reading this site pays as much attention to cars and the car business as we at Autosavant tend to do.  This reality landed in my inbox this morning with a comment pointing out that I referred to the acronym CAFE without defining it in the article about the 2015 F-150 moving to a mostly aluminum body.  Let’s take a step back and explain what CAFE is, in the context of the auto industry.  (If you want to know what it is in the context of a place to eat lunch, you’re on the wrong website).

CAFE stands for Corporate Average Fuel Economy.  It’s a set of standards implemented in the U.S. starting in 1978 that required that each manufacturer’s fleetwide fuel economy (sales-weighted) reach a minimum level.  As with so many regulations, there are loopholes (for instance, E85 ethanol-capable vehicles count only the gasoline portion of their theoretical fuel – 15% – toward meeting their CAFE numbers, despite that fact that almost nobody actually uses E85, and economy with E85 is worse than with gasoline).  More info on the E85 loophole (which has now been partially closed)  But now there are EV loopholes, giving extra CAFE credits to manufacturers

The CAFE number for cars had been 27.5 mpg from 1990 through 2010 (and for trucks, it ranged from 20 to 23.5 during the same period).  But since then, the requirements are getting more strict.  The standards have been inching upward, and by 2025, the fleetwide average will have to be 54.5 miles per gallon.

Critics of CAFE liken it to combating obesity by outlawing large clothing.  Regulations like CAFE tend to distort the market; for instance, when large passenger cars were no longer available, consumers flocked to large SUVs instead, where the fuel economy standards were less stringent.  They still got their body-on-fram vehicles with V8 engines, except in the form of an SUV instead of a sedan or station wagon.

If the goal is to improve the efficiency of the auto fleet in the U.S., several of us at Autosavant have advocated for a higher gas tax.  After all, at no time in recent history have the sales of small cars been so strong as when the price of gasoline spiked above $4.00 per gallon for the first time in mid-2008. 

However, with nearly every new car showing significant mileage improvement vs. its predecessor, it is possible that CAFE is taking hold and actually improving the fleetwide averages.  As a result of these requirements, we will be seeing a shift to smaller, forced-induction (supercharged or turbocharged) engines, transmissions with more than six forward ratios, and a shift to lighter materials (such as the F-150’s future aluminum construction) in order to meet these requirements.

One effect of improving fleetwide fuel economy is that gasoline taxes that are earmarked to improve highways have been resulting in less revenue for federal and state governments.  Because in some ways, apparently cars can be too efficient (from a revenue-generating standpoint, at least), some states such as Oregon have proposed a miles-driven tax to replace their gasoline taxes.  Washington state tried to push through its own gas tax alternative before that.  After all, what politician could possibly avoid the allure of “additional revenue?”

Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

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