CAFE standards don't do anything approaching that. They mandate a target that the industry must meet, to achieve a greater social good, and allow the marketplace to determine how that target is achieved. Setting standards is a legitimate role for the federal government. Here is where the free marketers and I part company. I believe it is the legitimate role of government to remain vigilant toward protecting the long term interests of its citizens.
CAFE standards are no different.
Markets are often slow to respond to issues which may be more than a few quarters into the future. We know that the greatest use of petroleum in this country is in the transportation sector. Instead people tend to buy gas-guzzling SUVs. That's fine, people should be able to buy what they want. But now we have spiking gas prices for a variety of reasons, not all of which may be innocent, and many people are being inconvenienced in the pocketbook.