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Corporate Average Fuel Economy (CAFÉ) Standards Anticipated Impacts on Future Revenues.

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Presentation on theme: "Corporate Average Fuel Economy (CAFÉ) Standards Anticipated Impacts on Future Revenues."— Presentation transcript:

1 Corporate Average Fuel Economy (CAFÉ) Standards Anticipated Impacts on Future Revenues

2 Corporate Average Fuel Economy (CAFÉ) Standards History First enacted by US Congress in 1975 to improve the economy of cars and light vans after the 1973 Arab Oil Embargo. Based on a weighted average of a manufacturers current model year passenger cars or light trucks with a Gross Vehicle Weight under 8,500 pounds. If the manufacturer exceeds the standard, a penalty is assessed. $ mpg under the standard X Manufacturers Total Production for the US Domestic Fleet

3 CAFÉ Standards National Highway Traffic Safety Administration (NHTSA) regulates the CAFÉ standards US Environmental Protection Agency measures vehicle fuel efficiency. US Congress specifies that CAFÉ standards must be set at the maximum feasible level with consideration for: Technological feasibility Economic practicality Effect of other standards on fuel economy Need of the nation to conserve fuel NHTSA must issue new standards eighteen (18) months in advance of model year production.

4 Proposed CAFÉ Standards The new standards are presented not simply as passenger vehicles and light duty trucks. Standards are now expressed in terms of the vehicles footprint (Wheel Base X Average Track Width) For passenger vehicles the two categories are: 41 square feet or smaller (Honda Fit) 55 square feet or bigger (Mercedes-Benz S-Class) For light trucks the two categories are: 41 square feet or smaller (Nissan Juke) 75 square feet or bigger (Ford F-150)

5 Proposed CAFÉ Standards for Larger Passenger Vehicles Model YearPassenger Car Standard mpg mpg mpg mpg mpg mpg mpg 2012 *28.0 mpg 2016*31.0 mpg 2020*36.0 mpg 2025*46.0 mpg * Indicates new footprint standard.

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8 Factors Influencing Driving Habits Distance to Destination Presence of Passengers Personal Value of Time Comfort Cargo/Freight Needs Interim Stops / Destinations Roadway Congestion Safety Cost of Fuel Cost of Vehicle

9 Impacts of An Increase in CAFÉ Standards Slight increase in vehicle miles traveled Slight decrease in the gallons of gasoline consumed Commensurate decrease in motor fuel revenues related to gasoline consumption at the State and National level Increased costs to society in the form of additional crashes, fatalities, injuries, and property damage

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13 Strategies to Offset the Fiscal Impacts of Increased CAFÉ Standards Advocate revenue option other than Motor Fuel- based tax Increase Motor Fuel taxes Reduce expenditures Cost Savings Reduce System Miles Accept lower pavement conditions as the norm Allow more severe congestion along major corridors

14 Anticipated Implementation Schedule Originally expected the proposed standards to be officially released September 30, Indication from the US DOT and US EPA that a proposal is expected no sooner than November Delays are reportedly linked to preparing detailed of the official proposal to ensure it covers issues likely to be voiced during the comment period. The administration is expected to remain on track to issue final guidance by July 2012.

15 Shrinking Highway Dollar

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20 If you have any questions please contact us through our website or by at: or


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