54.5 miles per gallon. That is the target fuel efficiency for all light-duty vehicles by model year 2025. Yet if you’ve gone car shopping lately, you’ve noticed that the combined mpg is nowhere near that target. The average fuel economy of all new cars sold was 25.6 mpg as of July 2014.
That’s a huge gap. While average fuel economy continues to improve, the target benchmark seems impossible to reach.
That’s because we’re looking at two different measurements of fuel economy.
The lofty 54.5 mpg target that is commonly understood and reported by media is the UNADJUSTED value. The real number we see on window stickers and that are reported by our fuel gauges is the ADJUSTED value.
For those of you keeping score at home, the ADJUSTED target—the one that matters to us—is approximately 40 mpg, not 54.5 mpg.
Our 25.6 mpg average means that we as a post-industrial automotive culture are much closer to reaching a more sustainable level of emissions and fuel use.
WHY: A BRIEF HISTORY ON CAFE
The goal for automotive fuel efficiency has been 40 years in the making.
Enacted in 1975 and finalized in 2012, the Corporate Average Fuel Economy (CAFE) standard agreed on by the U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration aims to impose incremental increases in fuel economy in an effort to decrease greenhouse gas emissions and limit our dependence on foreign oil.
In October, 1973, after a series of tit-for-tat moves led to the Yom Kippur War, the OPEC oil embargo caused oil prices to quadruple. The resulting shortages blocked America’s love affair with the automobile and “spun the economy into a severe and extended recession,” according to the Center for Strategic and International Studies.
While the economic implications of energy dependence are never out of sight, the specter of global warming in the 70s has manifested into a pressing reality.
Cars, or light-duty vehicles that weigh less than 8,500 pounds, are responsible for more than half of the greenhouse gas emissions produced by the transportation sector, which makes up 28 percent of total energy consumption in the United States, according to data from the Energy Information Administration.
Since we’re unwilling to give up our cars, it makes sense to make them as fuel-efficient as possible.
It appears to be working.
There has been an 87 percent reduction in smog-forming tailpipe emissions since 2000, according to the Union of Concerned Scientists. Global warming emissions from the average vehicle have decreased by nearly 20 percent over the same time. Moreover, domestic oil production is at a record high; 84 percent of energy used in the United States is produced in the United States.
We should be cheering a landmark initiative that is the result of political will, industry innovation and consumer demand. Our cars are more efficient, our economy more resistant, and our energy consumption is more protected.
Yet the 54.5 mpg goal feels like we’re carrying an oil tanker on our backs.
THE GREAT DIVIDE
“We’re trying to educate folks on this,” said Jeff Alson, a senior policy advisor for the EPA.
There are two main components in the difference between UNADJUSTED and ADJUSTED fuel economy.
The first, and most complicated, are credits issued to automakers by the government. There are flex fuel credits, electric vehicle credits, and credits for other technologies that reduce greenhouse gases. The biggest credit, however, accounting for an average 4 to 5 mpg, will come from automakers using more “climate-friendly” refrigerants in air conditioning units.
“We’re highly confident the great majority of automakers will use these credits to take their 54.5 mpg target down to about 50,” Alson said. The refrigerants are more cost-effective to implement than fuel-saving technology.
The second difference in UNADJUSTED and ADJUSTED fuel economy is historical. When CAFE was enacted in 1975, automakers and the EPA used two laboratory tests to measure fuel economy: the city test and the highway test.
In 2007, for model year 2008 cars, the EPA added three additional tests and utilized greater technological sophistication to arrive at the EPA-estimated values. The three new tests include a high-speed test that maxes out at 80 mph, the air condition test under “hot ambient conditions,” and a cold temperature city test conducted at 20 degrees.
“We’re capturing a much broader range [of driving conditions],” Alson said of the testing.
Despite the caveat that “your mileage may vary,” the EPA test cycle is as accurate as it’s ever been.
Factoring in the variances that come from individual drivers and conditions, the EPA discounts its findings by 20 percent and that is what is shown on the window sticker. That discount, along with credits, is what is meant by ADJUSTED values.
Since the law was passed in 1975, automakers can still use the UNADJUSTED value in their reporting but none of them do because it is not nearly as accurate and, for marketing purposes, it would be a clear violation of FCC guidelines.
“It’s not because we want there to be a disconnect,” Alson said. “Our hands are tied by the law.”
CAFE EFFECT
Automakers that don’t reach the 2025 target for average fuel economy across their entire light-duty product line will be penalized.
But why is the target important at all? The EPA and NHTSA have forecasted that the targets will cut 6 billion metric tons of greenhouse gas over the lifetime of vehicles sold in model years 2012 to 2025. The U.S. generated 6.5 billion metric tons of greenhouse gas in 2012 alone.
The targets include gains to foreign policy as well, with a projected reduction of foreign oil imports by 2 million barrels per day by 2025.
The most immediate and enduring effect, however, is at the pump. The EPA estimates that improvements in fuel economy will save American families more than $1.7 trillion in fuel costs.
“American car buyers’ choices are influenced by what they’re paying at the pump,” wrote Matt Schmitz, of Cars.com. “Still, despite sometimes-wild fluctuations in gas prices, once car shoppers at large have made up their minds to ‘go greener,’ the tendency is to stick with it.”
Consumers have been going greener with their wallets.
Light-duty vehicles that average more than 30 mpg combined have made up 11.6 percent of new car sales in 2014, according to the Consumer Federation of America. In 2007, it was barely half a percent. For the first time in history, the majority of vehicles exceed 23 mpg.
Dozens of hybrid and plug-in models—and one gas-powered model–already get 40 mpg or more combined.
While the average cost of a new car exceeds $33,000 for the first time in history, light-duty vehicles are also safer and more fuel-efficient than they’ve ever been.
The average increase year-over-year since the five-cycle test was implemented in 2007 is about 1 mpg, according to data assiduously tracked by researchers Michael Sivak and Brandon Schoettle of the University of Michigan Transportation Research Institute.
This bears repeating: The average ADJUSTED fuel economy of all cars sold as of July 2014 is 25.6 mpg; the ADJUSTED fuel economy target by model year 2025 is 40 mpg combined.
With 40 mpg in our sights, it’s no time to let off the fuel-efficient gas.
