What is CAFE (Corporate Average Fuel Economy)?

Vehicle manufacturers are required to maintain an average fuel economy for the fleet of new vehicles they sell each year In the United States. Vehicle manufacturers must pay a penalty if their annual vehicle fleet uses too much fuel.

The Corporate Average Fuel Economy (CAFE) identifies the required miles per gallon for cars (sports cars, coupes, sedans and station wagons), as well as for light trucks (includes minivans, vans, most pickup trucks and sport utility vehicles). However, because it's an average fuel economy, in order to sell large cars or trucks that use more fuel the vehicle manufacturer must also sell small cars and trucks that are more fuel-efficient.

CAFE is so important to most vehicle manufacturers that they demand their suppliers develop low rolling resistance tires to be used as Original Equipment on their new vehicles. In order to meet these demands, these tires are often designed with a priority on reducing weight and rolling resistance and are molded with slightly thinner sidewalls, shallower tread depths and use low rolling resistance constructions and tread compounds.

CAFE tests are conducted in a laboratory and not on the highway. Many aspects that affect fuel economy in the real world are reduced to constants incorporated into the formulas specified.