Design incentives to increase vehicle size created from the U.S. footprint-based fuel economy standards

► New U.S. fuel-economy standards may create an incentive to increase vehicle size. ► We model firms as choosing vehicle designs and prices in oligopolistic equilibrium. ► Vehicle size increases 2-32% for 20 out of 21 scenarios of consumer preferences. ► Increases in size reduce fuel economy gains from 5-13%, resulting in 5-15% higher CO2 emissions. ► Incentive is larger for trucks than cars, which may increase traffic safety risks.