Fuel Economy

Despite technological advances, average fuel economy of new cars and light trucks has declined from its peak of about 26 mpg in 1988 and has remained below 25 mpg since 1993 due to increasing vehicle size and power, the rising market share of light trucks, and the lack of tougher CAFE standards. The original standards for cars were adopted in 1975 and reached their maximum level in 1985.

On April 1st, 2010 the U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) issued harmonized fuel economy and greenhouse gas (GHG) emissions standards for cars and light trucks of model years 2012 through 2016. The joint rulemaking marks the first major increase in fuel economy standards in three decades, and the first national GHG standards for vehicles. Under the agencies’ projected sales mix, cars and light trucks together would achieve an average of 34.1 miles per gallon by 2016, up 30 percent from the 2008 average of 26.3 miles per gallon. The rule will accelerate achievement of the 35-miles-per-gallon level mandated for 2020 by the Energy Independence and Security Act of 2007.

To facilitate compliance with the higher standards, recent fuel economy legislation should be complemented by a combination of policies, including: implementing tax credits for purchasers of innovative, highly efficient vehicles; expanding taxes on gas-guzzling vehicles; increasing labeling and consumer education efforts; and continuing vigorous R&D on fuel-efficient, low-emissions vehicles.