CAFE credits

CAFE credits, or Corporate Average Fuel Economy credits, are incentives that auto manufacturers earn by producing vehicles that meet or exceed fuel efficiency standards. If a company manufactures more fuel-efficient vehicles than required, they accumulate credits. These credits can then be used to offset the fuel economy requirements for other vehicles they produce, or sold to other manufacturers who may need them to comply with regulations. Essentially, CAFE credits encourage automakers to develop more fuel-efficient cars and provide flexibility in meeting government standards while promoting environmental benefits and consumer savings.