"New fuel economy labels will provide simple, straightforward updates to inform consumers about their choices in a rapidly changing market," said the U.S. Environmental Protection Agency Administrator Lisa Jackson.

The EPA and the Department of Transportation have proposed that such labels be displayed on the windows of new cars in showrooms to compare both mileage and greenhouse gas emissions. The scheme would start with the 2012 model year.

Currently there is only a single energy efficiency label required on all new cars and light trucks.

The letter grades would range from 'A+' - the most efficient - to 'D', the least, reflecting the grading system in US schools. No vehicle would get a failing grade.

Gina McCarthy, an EPA assistant administrator, said all-electric vehicles would get the top grade while plug-in hybrid cars, which are charged with an electric power cord and have small engines, would get an 'A'.

The top performing traditional hybrid cars such as the Prius, made by Toyota, and the Fusion hybrid, made by Ford, would get an 'A-'.

The second label on cars in the showroom would include miles per gallon, an annual fuel cost for driving the car, and how it compares among all types of vehicles.

The EPA is in talks with car manufacturers on standardising an equivalent to 'miles per gallon' to measure the efficiency of all-electric and mostly electric cars.

In April, the EPA finalised the first US limits on greenhouse gas emissions from cars and light trucks and the Department of Transportation strengthened fuel economy standards for model year 2012 to 2016 passenger vehicles to on average 35.5 miles per gallon by 2016. This would be a poor figure in Europe but in the US represents a 42 percent increase.

American passenger vehicles are responsible for about 20 percent of the country's greenhouse gas emissions and for consuming about 44 percent of its oil.

The car industry is ambivalent about the labels. Dave McCurdy, the president and CEO of the Auto Alliance, praised the idea of giving consumers more information, but said "the proposed letter grade falls short because it is imbued with school-yard memories of passing and failing."

It's also possible some people might deliberately buy high-emitting cars, as has happened in California.

> www.epa.gov/fueleconomy