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2016 CAFÉ standards will challenge OEMs, repairers

Monday, March 4, 2013 - 06:25
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Back when Americans paid a few cents a gallon for gasoline, nobody worried much about fuel efficiency. All that changed with the Arab Oil Embargo of 1973.

Greg Horn

The Organization of Petroleum Exporting Countries (OPEC) cartel reduced the flow of crude to a trickle, driving up costs. This led to mile-long lines at the pump and gas rationing unseen since World War II. Congress reacted in 1975, with the Corporate Average Fuel Economy (CAFE) standard. They've been tinkering with it ever since.

Historically, the CAFE standard has been the sales-weighted harmonic mean fuel economy, expressed in miles per U.S. gallon (mpg of a manufacturer's fleet of current model year passenger cars or light trucks with a gross vehicle weight of 8,500 pounds or less, manufactured for sale in the United States).

The harmonic mean is used because it is appropriate for situations when the average of rates is desired, and it tends strongly toward the lowest numbers on the list. Compared to the arithmetic mean, it may mitigate the influence of large outliers and increase the influence of small values.

The original intent of the CAFE standard was to improve the average fuel economy for cars and trucks sold in the United States.

It works this way: if the average fuel economy of a manufacturer's annual fleet of vehicle production falls below the defined standard (currently 30.2 mpg for passenger cars and 24.1 mpg for light trucks), a built-in penalty is assessed. The penalty requires the manufacturer to pay $5.50 for every 0.1 mpg below the standard, multiplied by the manufacturer's total production for the U.S. domestic market. Several manufacturers are paying it.

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