Corporate Average Fuel Economy Standards

CAFE standards were originally established by Congress for new automobiles, and later for light trucks, in Title V of the Motor Vehicle Information and Cost Savings Act (15 U.S.C. 1901, et seq.) with subsequent amendments. Under CAFE, automobile manufacturers are required by law to produce vehicle fleets with a composite sales-weighted fuel economy which cannot be lower than the CAFE standards in a given year, or for every vehicle which does not meet the standard, a fine of $5.00 is paid for every one-tenth of a mpg below the standard. (DOE6)