The US Corporate Average Fuel Economy (CAFE) standards regulate the fleet fuel economy of automakers that manufacture and sell automobiles in the US. CAFE standards will increase by 24% (for the passenger car fleet) - 35% (for the light-truck fleet) over the period 2011-2025 leading to a renewed interest in the role that advanced technologies will play in enabling CAFE compliance. This study compares the effects of 2 designs of plug in hybrid electric (PHEV) to estimate the cost of CAFE compliance with PHEVs as a component of the domestic passenger car fleet and as a component of the domestic light truck fleet. Results show that for many of the US automakers and for a variety of incremental cost scenarios, the introduction of PHEVs into the vehicle fleet reduces the costs of CAFE compliance relative to baseline scenarios. Over-all, results show that PHEVs can contribute to a reduction in the costs of CAFE compliance for domestic automakers and should be more thoroughly considered in near-term regulatory and industrial analyses of CAFE compliance strategies. (C) 2013 Elsevier Ltd. All rights reserved.