CAFE standards represent a crucial regulatory tool employed by governments globally. They compel automotive manufacturers not just to produce some efficient vehicles but to ensure that
the average fuel efficiency across their entire fleet of newly manufactured and sold vehicles meets a progressively stringent minimum threshold each year. This average is not a simple mean; it is a sales-weighted average, meaning high-volume models have a greater impact on a manufacturer’s overall CAFE score than niche vehicles. The core principle is straightforward: regulate the fuel economy or fuel consumption.