With the introduction of plug-in hybrid electric vehicles, the US Environmental Protection Agency developed a rule to calculate "miles per gallon equivalent" (MPGe) for electric vehicle window stickers and the US Department of Energy created a separate procedure for calculation of fuel economy for use in the federally mandated corporate average fuel economy (CAFE) standards. The EPA rule fails to account for inefficiencies in or emissions resulting from the production of electricity and as a result greatly overestimates the life cycle efficiency of covered vehicles, which would be evident using "exergy analysis." The DOE rule accounts for conversion efficiencies, but includes a long-standing, policy based factor (originally developed to reduce oil consumption by promoting alternatively fueled vehicles). This factor disproportionately raises the calculated performance of electrically powered vehicles. As a result, both the EPA and DOE rules incentivize policies that are not substantiated by the immediate technical merits. (C) 2014 Elsevier Ltd. All rights reserved.