All AutoMeter fuel level gauges and most OEM fuel level gauges operate on the same principle. They operate the same way as an ohm meter and measure resistance to ground, but only within a calibrated range and direction. Power & ground is supplied to the gauge to power the meter. A signal is produced on the “S” terminal, which is then connected to the fuel tank sending unit. The fuel tank sender then receives that signal and varies resistance to ground. The sender can be thought of as nothing more than a variable resistor. This is why the sender also needs to have a 2nd wire going to a common chassis ground, otherwise the sender would not have the ability to vary resistance to ground.