In 1923, the average vehicle managed 14 mpg and, for the next 50 years, fuel efficiency went downhill.
By 1973, the average was 11.9 mpg. Disappointing, but understandable. This was an era of cheap and plentiful oil. However, the industry's gas-guzzling ways spun the image of a voracious and wasteful business.
While that image was grounded in fact 40 years ago, something different is true today. A recent study by the University of Michigan Transportation Research Institute shows fleet-wide fuel economy began to improve after 1973. By 1991, it hit 16.9 mpg, and while it then stalled for a decade and a half, fuel economy across the automotive fleet has taken a dramatic turn for the better since 2007.
This is not coincidence. In 2008, U.S. President Barack Obama began to push for dramatic improvements in fuel economy. His White House initiated a drive for a fleet-wide standard of 35.5 mpg by 2016. This year, Obama unveiled an agreement with 13 major auto makers that next sets the standard at 54.5 mpg or 163 grams/mile of CO2 by 2025.
Of course, Obama wrapped the announcement in the national security/economic savings blanket sure to appeal to a notable chunk of voters. He said that the latest agreement to almost double fuel economy represents "the single most important step we've ever taken as a nation to reduce our dependence on foreign oil," with the added benefit of saving U.S. consumers $1.7 trillion at the pump by 2025, or $8,000 per vehicle.
Yes, he's a politician; he has to sell fuel economy not on altruistic terms – as a struggle against human-influenced climate change – but instead as a great benefit to the health, safety and prosperity of regular folks. But that should not undermine this sea change in the car business since 2007.
The U.S. Environmental Protection Agency reports that it expects 2014 model year cars to hit on average 28.5 mpg. Every car company I ask says it will meet the 2016 standard and most do not seem worried about the 2025 number, either.
The University of Michigan estimates the cumulative amount of fuel saved since 2007 in new vehicles is 15.1 billion gallons or the equivalent of all the fuel used by U.S. vehicles for about 33 days this year. So the Corporate Average Fuel Economy (CAFE) rules this year will save more than a month's fuel.
This reduction comes with a cut in emissions. Since 2007, says the university, 297 billion pounds of carbon dioxide has not been pumped into the atmosphere thanks to CAFE. The researchers add that the new fuel economy standards "will continue to accelerate this progress."
Here is the often unrecognized or at least under-appreciated "green" story of the car business. After ignoring or stalling on squeezing more out of a litre of fuel, the world's auto companies have reinvented themselves and the vehicles they build. A big, throaty, thirsty V-8 used to be the pinnacle of automotive greatness. Not now.
At the Automotive News World Congress this year, car makers said they are confident they can reach the 54.5 mpg target without introducing high volumes of electric cars and plug-in hybrids. Instead, Brian Kesseler, president of Johnson Controls Inc.'s battery division, told Automotive News that a mix of start-stop systems, turbochargers, direct injection and other cutting-edge technology have allowed auto makers to make dramatic fuel efficiency leaps.
The genius of the CAFE rules is that they have fostered numerous realistic innovations by not pushing any one particular technology – precisely the opposite of what the California Air Resources Board (CARB) is doing. By 2025, CARB has mandated that 15 per cent of the vehicles car companies sell must be zero-emission, specifying battery cars, plug-in hybrids or fuel-cell powered vehicles. In other words, CARB has picked the green technology for car companies. This is a mistake.
Unless there is a massive breakthrough in battery technology and EV infrastructure, auto companies will not likely hit CARB's targets. On the other hand, the White House's CAFE rules are attainable. Obama got this one right.
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