Corporate Average Fuel Economy

Corporate average fuel economy (CAFE) standards are regulations in the United States, first enacted by the United States Congress in 1975, after the 1973–74 Arab Oil Embargo, to improve the average fuel economy of cars and light trucks produced for sale in the United States. More recently, efficiency standards were developed and implemented for heavy-duty pickup trucks and commercial medium-duty and heavy-duty vehicles. CAFE neither directly offers incentives for customers to choose fuel efficient vehicles nor directly affects fuel prices.

Rather, it attempts to accomplish the goals indirectly, by making it more expensive for automakers to build inefficient vehicles by introducing penalties.

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