USA: Light-Duty Vehicles: Fuel Economy (1978-2011)

Background

The 1975 Energy Policy Conservation Act added Title V, Improving Automotive Efficiency, to the Motor Vehicle Information and Cost Savings Act and established Corporate Average Fuel Economy (CAFE) standards for passenger cars and light-duty trucks (LDT). The Act, passed in response to the 1973-74 oil crisis, had a near term goal to double new car fuel economy from 13.6 miles per gallon (mpg) in 1974 to 27.5 mpg by model year (MY) 1985. However, since 1985 the standards remained almost unchanged through MY 2011. New, more stringent CAFE and GHG emission standards, adopted under the 2007 Energy Independence and Security Act, became effective from MY 2012.

The CAFE regulations require each car manufacturer to meet a standard for the sales-weighted fuel economy for the entire fleet of vehicles sold in the USA in each model year. Fuel economy—expressed in miles per gallon (mpg)—is defined as the average mileage traveled by an automobile per gallon of gasoline or equivalent amount of other fuel.

The 1978-2011 CAFE standards were administered by the National Highway Traffic Safety Administration (NHTSA), an agency within the US Department of Transportation (DOT). NHTSA was responsible for establishing and amending the CAFE standards; promulgating regulations concerning CAFE procedures, definitions and reports; enforcing fuel economy standards and regulations; and all other aspects of CAFE. The Environmental Protection Agency (EPA) was responsible for calculating the average fuel economy for each manufacturer.

CAFE fuel economy testing was performed over two EPA laboratory test cycles: FTP-75 (weighted at 55%) and HWFET (45%).

CAFE Standards

The CAFE fuel economy standards since the beginning of the program through MY 2011 are listed in Table 1. Two sets of standards were established: those for passenger cars and for light trucks. The latter category included vehicles of gross vehicle weight rating (GVWR) from 6,000 to 8,500 lbs, such as pickup trucks, minivans, or SUVs. In the initial years, separate standards existed for 2-wheel and 4-wheel drive LDTs, which were later replaced by one combined standard. For passenger cars, a manufacturers’ domestic and import fleets had to meet the applicable CAFE standard separately.

Alternative Fueled Vehicles. The CAFE fuel economy of an alternative fueled vehicle was calculated by dividing its real fuel economy by a factor of 0.15. For instance, a 15 mpg natural gas vehicle would be rated as a 100 mpg gasoline vehicle. For bi-fuel vehicles, this calculation was applied to the expected percentage of alternative fuel use.

Reformed CAFE Standards

Effective 2011, a reformed CAFE program was adopted for light trucks. During a transition period 2008-2010, manufacturers had the choice of complying either with the unreformed CAFE standards shown in Table 1, or with the reformed CAFE rules.

The reformed CAFE regulation also applied to medium-duty passenger vehicles (MDPVs) of GVWR up to 10,000 lbs as part of the MY 2011 regulated light truck fleet. Thus, the regulation captured nearly all larger size pick-up trucks and SUVs which were excluded from the unreformed CAFE fleet.

Under reformed CAFE, each manufacturer’s required level of CAFE was based on target levels set according to vehicle size—an approach that was maintained for MY 2012 and later CAFE standards. The targets were assigned according to a vehicle’s “footprint”, defined as the product of the average track width (the distance between the centerline of the tires) and wheelbase (the distance between the centers of the axles). Each vehicle footprint value was assigned a target specific to that footprint value. Compliance was determined by comparing a manufacturer’s fleet average fuel economy in a model year with a required fuel economy level calculated using the manufacturer’s actual production levels and the category targets.

The target values were determined from the following continuous mathematical equation, based on the vehicle footprint and four parameters (a ... d) which were adopted for each model year, Table 2.

T = [1/a + (1/b - 1/a) e^(x-c)/d/(1 + e^(x-c)/d)]^-1

where:
T - fuel economy target, mpg
a - maximum fuel economy target, mpg
b - minimum fuel economy target, mpg
c - footprint value at which the fuel economy target is midway between a and b, ft²
d - parameter defining the rate at which the value of targets decline from the largest to smallest values, ft²
e = 2.718
x - footprint of the vehicle model, ft²

The resulting CAFE target curve was an elongated S-shape, with fuel economy targets decreasing from a to b as the footprint increased. An example target function is shown in Figure 1.

The DOT estimated that the average light truck target required of manufacturers under the reformed CAFE rule in MY 2011 would be 24.0 mpg.

Compliance

Achieved CAFE fuel economy through MY 2004—for the total US market fleet of cars, light trucks, and the combined cars and LDT—is compared with CAFE standards in Figure 2. CAFE standards were met if the achieved fuel economy level is higher than the respective standard.

CAFE fuel economy figures achieved over the period 2000-2004 are also listed in Table 3 (in mpg and in the metric units of liters per 100 km).

Manufactures whose fleets failed to meet CAFE standards were liable for a civil penalty of $5.50 per each tenth of a mpg under the target value times the total volume of vehicles manufactured for a given model year. From 1983 to 2004, manufacturers paid more than $618 million in civil penalties. Most European manufacturers regularly paid CAFE civil penalties ranging from less than $1 million to more than $27 million annually. Asian and US manufacturers had never paid a civil penalty.