How Could New CAFE Standards Affect the Auto Industry

New corporate average fuel economy standards will make EV and hybrid battery technology even more important in the effort to decarbonize

In June, the National Highway Traffic Safety Administration (NHTSA) finalized new Corporate Average Fuel Economy (CAFE) Standards for 2027-2031 model year vehicles sold in the U.S. While the new fuel economy standards aren't as strict as originally proposed in 2023, they will still have significant impact on the automotive industry in the coming years. The new standards require an industry-wide fleet average of approximately 50.4 miles per gallon (mpg) by model year 2031 for passenger cars and light trucks.