US FederalWhat fuel economy standards must automakers meet?
Automakers must meet Corporate Average Fuel Economy (CAFE) standards set by the National Highway Traffic Safety Administration (NHTSA), which require fleet-wide average fuel economy targets that rise over time — currently aiming for approximately 49 mpg for passenger cars and light trucks by model year 2026.
What the Law Says
The Corporate Average Fuel Economy (CAFE) program, established under federal law, requires automobile manufacturers to meet minimum average fuel economy levels across their entire fleet of vehicles sold in the U.S. These standards are set annually by the National Highway Traffic Safety Administration (NHTSA) and vary by vehicle type and model year.
The legal foundation is found in 49 U.S.C. § 32901, which defines key terms and authorizes NHTSA to prescribe fuel economy standards. The statute directs that standards 'shall be the maximum feasible average fuel economy level' considering technological feasibility, economic practicality, and other factors.
Standards apply separately to passenger cars and light trucks (including SUVs, vans, and pickup trucks), with distinct targets that have increased over time. Recent final rules (e.g., the 2024 NHTSA rule for model years 2024–2026) set a combined industry target of approximately 49 mpg by MY 2026 — up from about 40 mpg in MY 2021.
Statutory Text‘average fuel economy’ means the number derived by dividing the total number of vehicle miles traveled by the total number of gallons of fuel consumed by all automobiles of a manufacturer
— 49 U.S.C. § 32901 — Definitions
Statutory TextThe Secretary shall, by regulation, prescribe… corporate average fuel economy standards… for each model year… at the maximum feasible average fuel economy level
— 49 U.S.C. § 32901 — Definitions
What to Do
Determine your company’s fleet composition (passenger cars vs. light trucks) for the model year.
Calculate projected fleet-wide average fuel economy using NHTSA’s official methodology.
Submit required annual reports to NHTSA by March 31 following the model year.
If below standard, purchase or bank fuel economy credits—or face civil penalties of up to $14 per 0.1 mpg shortfall per vehicle.
Stay updated on NHTSA rulemakings, as standards are revised periodically (e.g., MY 2027+ standards are under development).
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.