The National Highway Traffic Safety Administration on June 7 issued final Corporate Average Fuel Economy (CAFE) standards for U.S. passenger cars and light- and heavy-duty pickups for model years 2027 to 2031, with the goal of cutting gasoline consumption by 70 billion gallons and carbon dioxide emissions by 710 million metric tons by 2050. 

The CAFE standard regulates how far a vehicle must be able to travel on a gallon of gas and represents the “maximum feasible level that the agency determines vehicle manufacturers can achieve in each [model year], in order to improve energy conservation,” the final rule says. 

The rule sets regular 2% increases in fuel efficiency for passenger cars ― sedans and SUVs ― per year between the 2027 and 2031 model years, rising from 60 miles per gallon in 2027 to 65.1 mpg in 2031, the same as set in the proposed CAFE standards NHTSA issued in July 2023. 

But the final standards for light- and heavy-duty pickups are less stringent than the proposed rules. A 2% fuel efficiency increase for light-duty pickups will not go into effect until 2029, starting at 42.6 mpg in 2027 and 2028, then rising to 43.5 mpg in 2029 and hitting 45.2 mpg in 2031. (See NHTSA Proposes 66.4-mpg Fuel Efficiency for Passenger Cars by 2032.) 

The current CAFE standards are 48.7 mpg for passenger cars and 35.2 mpg for light-duty pickups, according to NHTSA, and are set to rise to 58.1 mpg and 41.5 mpg, respectively, in 2026.  

The CAFE standard for heavy-duty pickup trucks and vans ― weighing between 8,501 and 14,000 pounds ― is measured in the gallons required to drive 100 miles. The new standards cover the 2030 to 2035 model years and are slightly less rigorous than those in the proposed rule. For example, the 2030 standard in the final rule is 4.503 gallons per 100 miles versus 4.427 gallons in the proposed rule.  

The NHTSA notes “real-world fuel economy is generally 20 to 30% lower than the estimated required CAFE level” and that some automakers are “over-complying” with the standards due to electric vehicles in their fleets achieving higher anticipated levels of fuel efficiency than required. The potential “achieved” 2031 efficiency for passenger cars could be 70.8 mpg versus the 65.1 mpg that is required.  

But the NHTSA says some manufacturers are not complying with existing CAFE standards for light trucks and are choosing to pay resulting penalties. According to the manufacturers, “they cannot stop manufacturing large fuel inefficient light trucks while also transitioning to manufacturing electric vehicles,” and the NHTSA says it will no longer require them to pay penalties.  

The final rule also stresses that the standards are “footprint target curves for passenger cars and light trucks … [which] means that the ultimate fleet-wide levels will vary depending on the mix of vehicles that industry produces for sale in those model years.” 

But the NHTSA said in its announcement that it “does not consider electric and other alternative fuels when setting standards; manufacturers may use all available technologies ― including advanced internal combustion engines, hybrid technologies and electric vehicles ― for compliance.”  

Administration officials framed the final standards as a win-win for consumers economically and environmentally. 

“Not only will these new standards save Americans money at the pump every time they fill up, they will also decrease harmful pollution and make America less reliant on foreign oil,” Transportation Secretary Pete Buttigieg said in the NHTSA press release.   

Buttigieg estimated $600 savings on gasoline over the lifetime of a vehicle. 

“When Congress established the Corporate Average Fuel Economy program in the 1970s, the average vehicle got about 13 miles to the gallon,” NHTSA Deputy Administrator Sophie Shulman said. “These new fuel economy standards will save our nation billions of dollars, help reduce our dependence on fossil fuels and make our air cleaner for everyone. Americans will enjoy the benefits of this rule for decades to come.”  

EPA vs. CAFE

Based on 2022 figures from EPA, the transportation sector pumps out the largest portion of U.S. greenhouse gases ― 28% ― with light-duty vehicles accounting for 57% of that total.  

While President Joe Biden wants 50% of all new car sales to be electric by 2030, the impact of the CAFE standards on transportation electrification is an open question.  

The final standards were developed to complement EPA’s recent update to limits on vehicle tailpipe emissions, which EPA Administrator Michael Regan hailed as “the strongest vehicle pollution technology standard ever finalized in the United States.” 

The EPA has estimated that to comply with the rule, about 56% of new car sales will have to be EVs by 2032, while 13% will need to be plug-in electric hybrids. (See Automakers Get More Time, Flexibility in EPA’s Final Vehicle GHG Rule.)  

The EPA rule could also cut total CO2 emissions by 7.2 billion MT by 2054, more than 10 times the estimated reductions for the NHTSA standard. 

The NHTSA takes a more incremental view, stating that “although the vehicle fleet is undergoing a significant transformation now and in the coming years, for reasons other than the CAFE standards, … a significant percentage of the on-road (and new) vehicle fleet may remain propelled by internal combustion engines (ICEs) through 2031.” 

Rather, NHTSA argues, “The final standards will encourage manufacturers producing those ICE vehicles during the standard-setting time frame to achieve significant fuel economy, improve energy security, and reduce harmful pollution by a large amount.” 

Just days before the release of the NHTSA rule, Toyota, Subaru and Mazda made a joint announcement that they had each committed to developing new ICEs that are smaller and more energy efficient and will use alternative fuels ― such as synthetic and biofuels and liquid hydrogen ― to cut their carbon emissions to zero.  

John Bozzella, CEO of the Alliance for Automotive Innovation, noted the alignment between the EPA and NHTSA standards. “The left hand knew what the right hand was doing,” he said, in a statement on the organization’s website.  

But Bozzella also questioned whether the U.S. will need CAFE standards in the future “in a world rapidly moving toward electrification.” 

”CAFE’s a relic of the 1970s ― a policy to promote energy conservation and energy independence by making internal combustion vehicles more efficient,” he said. “But those vehicles are already very efficient. And EVs? They don’t combust anything. They don’t even have a tailpipe!”