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CAFE standard set at 54.5 mpg by 2025

Wed, 29 Aug 2012

The final version of the new corporate average fuel economy (CAFE) standard was released today and, as expected, automakers will need to attain a fleet average of 54.5 mpg by 2025. The rules include electric and hybrid vehicles and—as of today—natural gas vehicles.

The Environmental Protection Agency and the National Highway Traffic Safety Administration proposed the rules in November, after reaching an agreement with automakers last July. The original deadline to announce a plan was Aug. 15, but the rule was attacked by U.S. Rep. Darrell Issa. Some foreign-based automakers say the rule unfairly benefits the Detroit Three.

The rules take into account the impact that plug-in electric, hybrid and natural gas vehicles will have on a company’s average.

To keep up with the changing average, automakers will need to improve fuel economy by about five percent annually. If automakers don’t comply with the new rules, they can be fined by regulators.

By Jake Lingeman