For Better or for Worse: The Impact of Corporate Average Fuel Economy (CAFE) Standards on Electric Vehicle Market

The purpose of Corporate Average Fuel Economy (CAFE) Standards is to enhance the fuel efficiency of passenger vehicles in the United States. The National Highway Transportation Safety Administration (NHTSA) set increasing CAFE standards in 2011 based on vehicle’s footprint, requiring vehicle manufacturers to improve the fuel economy of the vehicles they produce. This resulting improvement in vehicle fuel economy is likely to influence consumers’ decisions regarding new vehicle purchases, while the stringent CAFE standards are also likely to affect manufacturers’ production costs and benefits. In addition, the government provides various incentives to support the adoption of alternative fuel vehicles (AFVs), including electric vehicles (EVs), which influences consumers’ decisions regarding purchasing a new vehicle. An agent-based model is developed in this paper to estimate the potential future market shares of EVs considering the existing inherent uncertainties under different policy scenarios, including the footprint-based CAFE regulation. The results show that, if implemented effectively in conjunction with the available government incentives, the CAFE regulation can accelerate EV market penetration and help the U.S. to move away from conventional vehicles, thus reducing fossil fuel dependency. The findings indicate that consumers positively respond to the government’s policies both aiming to increase the fuel economy of vehicles and promote fossil-fuel independent, alternative-fuel vehicles.

  • Supplemental Notes:
    • This paper was sponsored by TRB committee ADC70 Standing Committee on Transportation Energy.
  • Authors:
    • Sen, Burak
    • Noori, Mehdi
    • Tatari, Omer
  • Conference:
  • Date: 2018


  • English

Media Info

  • Media Type: Digital/other
  • Features: Figures; References;
  • Pagination: 9p

Subject/Index Terms

Filing Info

  • Accession Number: 01660044
  • Record Type: Publication
  • Report/Paper Numbers: 18-04984
  • Files: TRIS, TRB, ATRI
  • Created Date: Feb 14 2018 10:47AM