Miles per gallon (MPG) requirements refer to federal mileage requirements. The leading federal mileage requirement is the Corporate Average Fuel Economy (CAFE) standard requiring car manufacturers to meet specific mileage standards averaged across their fleet of passenger cars, light trucks, and medium-duty passenger vehicles (MDPV). CAFE standards and requirements are intended to improve national fuel efficiency and reduce greenhouse gas (GHG) emissions from mobile sources.   

The Environmental Protection Agency (EPA) and the National Highway Traffic and Safety Administration (NHTSA) share the responsibility for administering the CAFE values, requirements and thresholds. The EPA is chiefly responsible for measuring fuel economy as well as for testing and reporting the individual results for car manufacturers to the NHTSA. The NHSTA is responsible for evaluating the test results, determining if the car manufacturers have met CAFE requirements, metering out penalties and fines as required, and adjusting and changing CAFE standards and values on a periodic basis.

When Congress originally enacted CAFE standards, much attention was given to the complex and involved challenge of re-engineering cars and production facilities for increased fuel efficiency. In response to the expense and challenge of re-engineering, Congress noted that CAFE standards and values could only be set as high as the maximum level of technological feasibility and economic expense.   

Stakeholders most often learn about their vehicle's CAFE MPG level on their vehicle's fuel economy label. The EPA and the NHSTA began redesigning the consumer fuel economy label in 2010 to provide more information to consumers. Fuel economy information facilitates comparisons across all vehicle types including conventional fuel vehicles, electric vehicles (EV) and plug-in hybrid electric vehicles (PHEV).

There is significant debate surrounding CAFE standards. Supporters of CAFE believe that reducing fuel consumption, through increased vehicle efficiency, is associated with a low carbon economy and US energy independence. Opponents of CAFE cite cost, safety and ineffectuality as reasons to end the program.   

The regulatory environment surrounding miles per gallon requirements is increasingly strict. Due to the intensity of the regulatory environment surrounding miles per gallon requirements, non-compliance is treated quickly and severely. Consequences for CAFE non-compliance by car manufacturers include an extensive system of fines. Car manufacturers whose vehicles fleets do not meet CAFE levels are subject to civil penalties and fines figured by multiplying total number of vehicles in the fleet times $55 per 1 MPG under CAFE levels. Car manufacturers paid $618 million in CAFE fines from 1983 through 2004.

 

Foreign car manufacturers who import to the US are also subject to CAFE standards and penalties. That said, foreign car makers - particularly Asian and European car makers - tend to pay small CAFE fines in comparison to American car makers because most large car making countries have significantly higher MPG requirements than the United States. The United States is behind the European Union, Canada, South Korea, China, and Japan in miles per gallon requirements.