The U.S. Government is making structural changes to the Corporate Average Fuel Economy (CAFE) requirements, but it is only a symbolic move. The country needs a real catalyst to spark innovation in fuel efficiency technology.
For those unfamiliar with CAFE requirements, these rules govern the minimum average fuel standards that each automotive company must meet with the vehicles it creates. While the government has made minor adjustments to the requirements for each category of vehicles, these rules are far out of sync with the original intentions.
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The time has come for our politicians to drastically increase the CAFE requirements on new vehicles. The technology is available for at least a 10% to 20% increase in current standards. A significant increase in the standards would encourage the core parts of the industry to further increase funding in engine technologies and would offer a real opportunity for new technology firms.