Quote:
Originally Posted by megeebee
No, it was the first CAFE standards set in the mid-70's. There would be even fewer "tiny cars" to buy if it weren't for that.
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I believe what I stated was true but you are correct as well that it does encourage them to make smaller cars. But they wouldn't sell in many numbers if people don't want to buy them. CAFE does not encourage people to buy smaller more fuel efficient cars.
Another affect of CAFE is to encourage car companies and consumers to get around the rules. One more reason large cars and station wagons disappeared and SUV's and minivans took their places. With cheap gas people were more than willing to drive inefficient SUV's and car makers found it easy with the lower standards for trucks. It helped fuel the disappearance of cars that were more capable of hauling people and trailers.
Fuel prices have the biggest affect of all. Little else matters. High fuel prices will drive demand and auto makers will try and meet demand. Luckily congress never pushed 35 mpg. standards when gas was super cheap. It would be a disaster. Car makers trying to build vehicles nobody wants. It will work out fine this time because consumer preference (due to gas prices) is actually ahead of the CAFE curve.