Cato Podcast How Fuel Economy Rules Made Cars Bigger, Pricier, and Less Safe
21 snips
Dec 23, 2025 Join Peter Van Doren, a Senior Fellow at the Cato Institute specializing in energy policy, and Brent Skorup, a legal expert in transportation regulations, as they dissect the unintended consequences of CAFE standards. They explain how these regulations have favored larger vehicles like SUVs at the expense of small cars, raising costs and reducing safety. The discussion highlights the complexities of electric vehicle mandates, market impacts on vehicle prices, and the ongoing policy flip-flops that frustrate automakers. A revealing look into the car industry's regulatory challenges!
AI Snips
Chapters
Transcript
Episode notes
Original Rationale Fails Empirical Test
- CAFE was created in 1975 to correct assumed consumer myopia about fuel savings.
- Subsequent research shows consumers largely value fuel savings correctly, undermining the original rationale.
Fleet Averaging Rewards Bigger Vehicles
- CAFE applies to a manufacturer's fleet average and sets laxer targets for larger vehicles.
- That structure penalizes small cars and incentivizes trucks and SUVs, reducing small-car availability.
CAFE's De Facto EV Mandate
- EVs aren't legally mandated but count as extremely high mpg equivalents in compliance math.
- That creates a de facto electric-vehicle mandate because EVs greatly improve fleet averages.