Definitions for "Corporate Average Fuel Economy"
Keywords:  cafe, fleet, mpg, gvwr, truck
regulation enacted in 1975 which requires a motor vehicle manufacturer to classify its U.S. vehicle fleet sales as either domestic or import for the purpose of fuel economy averaging.
Corporate Average Fuel Economy (CAFE) is the sales weighted average fuel economy, expressed in mpg, of a manufacturer's fleet of passenger cars or light trucks with a gross vehicle weight rating (GVWR-see below) of 8,500 lbs. or less, manufactured for sale in the United States, for any given model year. For more information see:
Originally established by Congress for new automobiles, and later for light trucks. CAFE standards require automobile manufacturers to produce vehicle fleets with a composite sales-weighted fuel economy that meets or exceeds the CAFE standards in a given year. For every vehicle that does not meet the standard, a fine is paid for every one-tenth of a mpg below the standard.