Corporate Average Fuel

Economy (CAFE) Standards

November 2016

Copyright 2012 Mahindra & Mahindra Ltd. All rights reserved.

Content slide with Agenda

Description / sub-title

What is CAFE
CAF Administers
CAFE Calculation
Medium and Heavy-duty Vehicle Fuel Efficiency Standards for beyond 2018
Passenger Car and Light Truck Standards for 2017 and beyond
CAFE Standards and Sustainability
Alternate Fuel-Hybrid/ Electric

What is CAFE?
Corporate Average Fuel Economy (CAFE) Standards
Cafe Standard is:
-a performance standard specifying a minimum level of average fuel
economy applicable to a manufacturer in a model year
--49 USC 32901(a)(6)

Applicable for: cars and light trucks produced for sale in the United States.
First enacted by the United States Congress in 1975, after the 1973-74 Arab Oil
Embargo.

Source: Arial, 10 points, sentencecase

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CAFE Administers
National Highway Traffic and Safety Administration
(NHTSA) sets and enforces the CAFE standards
------ under the Energy Policy and Conservation Act
(EPCA) of 1975, as amended by the Energy Independence
and Security Act (EISA) of 2007.

The Environmental Protection Agency (EPA) calculates

average fuel economy levels for manufacturers and also sets
related GHG(green house gas) standards
------ under the Clean Air Act.

CAFE Calculation
For a fleet composed of three different kinds of vehicle A, B, C produced

Fuel economy is calculated using 3 sets of calculations.

NHTSA
EPA (dynamometer testing)
EPA (adjusted on road)

Passenger Car and Light Truck

Standards for 2017 and beyond
In 2012, NHTSA established CAFE standards for model years 2017-2021
--- on an average, a combined fleet-wide fuel economy of 40.3-41.0 mpg.

EPA issued GHG standards, harmonized with NHTSAs fuel economy

standards
--- projected to require 163 grams/mile of carbon dioxide (CO2) in model
year 2025.

Medium and Heavy-duty Vehicle Fuel

Efficiency Standards for beyond 2018
"Phase 2" of medium- and heavy-duty vehicle fuel efficiency standards and
greenhouse gas (GHG) standards by March 2016.

NHTSA proposals: badges, labels and owners manual information

for new passenger cars, low-speed vehicles (LSVs) and light-duty trucks
< 8,500 pounds gross vehicle weight,
Objective
Increase consumer awareness regarding the use and benefits of alternative fuels.

CAFE Standards and Sustainability

Reduce petroleum consumption.
Increase the availability of alternative fuel vehicles.
Promote the advancement of innovative technologies.
Lower greenhouse gas emissions both helping to mitigate climate change
and improve air quality.

Alternate Fuel-Hybrid/ Electric

Alternate Fuel, Hybrid
a gallon of alternative fuel is considered to have 15% fuel
CAFE is ratio of alternate fuel economy divided by 0.15

Electric
Power consumed for electricity generation
Equivalent fuel consumption is considered
Incentives are provided for electric vehicles, plug-in hybrid electric vehicles,
and fuel cells vehicles.

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