The most common type of fuel level sensor is the Resistive/Float Sensor. This is basically a float on a long lever. The float always sits at the fuel level, which moves a contact on the other end that’s touching a resistor. This is much like how dimmer switches work, where you change the part on a resistor that the switch contact rests. Depending on the spot the contact is touching the resistor, the resistance of the circuit changes, and the vehicle’s onboard computer can thus derrive how high or low the float sits, and thus the fuel level.
But you’re right, the fuel dows slosh around, so how does it accurately measure the fuel level? Short answer, it doesn’t. If you park on an incline, it’s possible to get a wildly different reading than what your true fuel level is. In general while some measures are taken to ensure accurate readings, ultimately the reading is never 100% accurate, and it becomes especially innacurate the lower the fuel level gets.
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