It's easy to meet expectations when they're low enough.

When it comes to Corporate Average Fuel Economy (CAFE), car makers are exceeding expectations--but are still behind the curve--a report from the University of Michigan Transportation Research Institute (UMTRI) says.

In 2011, the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) issued new CAFE standards that--essentially--require car makers to achieve a fleet-wide average of 54.5 mpg by 2025.

So how are they doing?

Over the first two years of the new regime, fuel economy averages have slightly surpassed NHTSA's expectations.

The agency estimated 2012-model-year vehicles would achieve 28.7 mpg, but the actual average was 28.9 mpg.

For the 2013 model year, NHTSA expected the average to be 29.7 mpg, but the fleet returned 29.8 mpg.

However, confusingly, exceeding expectations does not equate to actually meeting the requirements.

Car makers missed the actual CAFE targets, which were 30.1 mpg for the 2012 model year and 31.1 mpg for the 2013 model year.

Old Gas Pumps

Old Gas Pumps

Why would the NHTSA and EPA have such low expectations? The agencies together don't think that car makers will be able to reach the 54.5 mpg mark solely by improving fuel efficiency.

That number assumes that certain car makers will earn additional CAFE credits for producing zero or near-zero emission vehicles, or sell those credits to other car makers, to average things out to 54.5 mpg.

Some car makers may also simply pay non-compliance fines.

It's worth noting that CAFE scoring is not the same as the gas-mileage ratings on new-car window stickers.

The window sticker ratings are calculated by applying "adjustment factors" to the CAFE test results, resulting in considerably lower fuel-efficiency numbers that are meant to reflect real-world consumer results.

The fleet average gas mileage that reflects the window-sticker numbers that consumers see for the 2012 model year was 23.8 mpg, according to UMTRI researchers. That was a record high.

One worrisome trend: Real-world mileage is getting further away from EPA ratings.

There's been a lot of doom and gloom over the 54.5 mpg standard and what it could mean for consumers.

But while the math may seem complicated, 2025 is still a long way away.


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