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The introduction of semiautomated vehicles designed to operate with manually driven vehicles is a realistic near-term objective. The purpose of this paper is to analyze the effects on traffic-flow characteristics and environment when semiautomated vehicles with automatic vehicle following capability (in the same lane) operate together with manually driven vehicles. We have shown that semiautomated vehicles do not contribute to the slinky effect phenomenon when the lead manual vehicle performs smooth acceleration maneuvers. We have demonstrated that semiautomated vehicles help smooth traffic flow by filtering the response of rapidly accelerating lead vehicles. The accurate speed tracking and the smooth response of the semiautomated vehicles designed for passenger comfort reduces fuel consumption and levels of pollutants of following vehicles. This reduction is significant when the lead manual vehicle performs rapid acceleration maneuvers. We have demonstrated using simulations that the fuel consumption and pollution levels present in manual traffic can be reduced during rapid acceleration transients by 28.5% and 1.5%-60.6%, respectively, due to the presence of 10% semiautomated vehicles. These environmental benefits are obtained without any adverse effects on the traffic-flow rates. Experiments with actual vehicles are used to validate the theoretical and simulation results.