Is 54.5 mpg achievable... and what will it cost?
Ask the average driver whether he or she would like better fuel economy from they car they're driving now, and the answer will, of course, be "Yes!" Ask whether the feds should continue forcing automakers to improve fuel economy on a very aggressive schedule, and most will, again, agree. But many people have little real understanding of what that will take... or what it will cost.
The lasting legacy of America's first major fuel crisis in 1973 remains the federal government's response to it: Corporate Average Fuel Economy (CAFE) laws. The first one required automakers' 1978-model "sales-weighted fleet averages" to be at least 18 miles per gallon. This was no challenge for imports selling mostly small cars, but a tall order for domestics at the time. It meant U.S. makers would have to balance sales of profitable larger vehicles with (usually loss-making) smaller ones, whether or not anyone wanted to buy them. Light truck standards followed for 1979, beginning at 17.2 mpg for 2WD and 15.8 for those with 4WD.
Then, on May 19, 2009, President Obama announced a new "national fuel economy program" mandating a fleet average of 35.5 mpg for by 2016 – a daunting 29-percent increase that moved the requirements of an existing 2007 law forward by four full years. Since 2012 models were essentially done, automakers would have just four model years to achieve it.
A year later, Obama ordered the National Highway Traffic Safety Administration (NHTSA) – which (for some reason) manages CAFE – and the Environmental Protection Agency (EPA) to jointly mandate much tougher standards for 2017-2025. They laid out four scenarios of three-, four-, five- and six-percent annual increases over that 35.5-mpg 2016 level. The six-percent-per-year schedule would have resulted in a CAFE of 62-mpg by 2025, but they later settled on a somewhat more reasonable 54.5 mpg mandate.
Using prices for an array of fuel-efficiency technologies projected by a 2010 National Research Council (NRC) study commissioned by NHTSA, the Center for Automotive Research (CAR) predicted a retail cost of meeting a (then proposed) 56-mpg CAFE at $6,714, which (when added to an estimated $1,500 increase for future safety requirements) would result in 2025-model vehicle stickers that are $8,214 higher, on average, than 2016 prices.
The only good news for automakers is that these new requirements move from a straight fleet average to a much more complex but more rational footprint-based formula, which comprehends the basic law of physics that larger vehicles will consume more energy than smaller ones. A vehicle's footprint is its wheelbase times its average tread width.
And it's important to note that CAFE-compliance fuel-economy numbers (from EPA emissions tests) are higher than the ones in ads, articles and window stickers because the feds mathematically adjust them downward to publishable ones that are better predictors of real-world efficiency. For 2012, for example, a subcompact Honda Fit with a 40-sq.-ft. footprint must achieve an EPA combined test fuel economy of 36 mpg, equivalent to a published 27 mpg, while a Ford F-150 with a 65-75 sq.-ft. footprint must test at 22 mpg for a 17-mpg sticker.
For a feature on this subject for the March/April issue of Motor Trend's Truck Trend magazine, I asked industry experts what this means to full-line automakers. "There is no fixed number that we will have to hit," Jeff Lewis, head of Ford's vehicle energy management engineering group, told me. "[Compliance] will be tied to the footprints and overall mix of our products.
"The input we have been providing [internally] is, 'Here is our cycle plan, here are the footprints of those vehicles, and here is the predicted sales mix.' Our CAFE planning team comes back and says, 'Here is what each of our vehicles needs to deliver to be compliant."
"A given vehicle is assigned a target," explained Gary Oshnock, Chrysler's manager of fuel economy and regulatory affairs. "What a manufacturer does to reach compliance is sales weight – each model will have X, Y or Z number of sales – to come up with an average footprint for its fleet. For a given model year, that average footprint determines the fleet-average fuel economy requirement."
He added that, because the 2012-16 rules require a very aggressive four- to 4.5-percent annual increase, "with five-year product cycles between major changes, every major change will require more than a 20-percent increase in fuel economy. What technologies will get you a 20 percent increase? And what will you need for your next 20 percent?"
The current rules for 2017-25 also require roughly four percent annual increases for cars, while full-size trucks get a "breather" (no increase) through 2020, then annual increases of about four percent for 2021-25. "And there are yet-to-be-defined bonus credits for full-size hybrid pickups," Love explained.
"There is a lot of available technology, but the biggest question is cost," he continued. "All the cheap technology has already been adopted, we're moving into much more expensive technology, and there's always a debate about what those costs will be – huge differences of opinion between costs as estimated by the government and as estimated by the manufacturers – and therefore a big question about whether the public will be willing to pay for it."
"No doubt it's a great challenge," said Chrysler vehicle line executive, Ram Trucks and regulatory affairs, Mike Cairns. "Do we know how to do it today? Not really. There is technology that can get us there, but not cost-effectively. We have to invent things, come up with new creative ideas, as well as improvements and cost reductions to known technologies, plus the weight reductions and aero improvements we have been doing over the years."
"In one sense, it's a very simple formula to improve fuel economy," Ford's Lewis adds. "Get weight out, improve rolling resistance, get better aerodynamics, get rid of parasitic losses in the systems and get as much efficiency as possible out of your powertrains. I think we can figure out how to do it, but it will be costly. Technology needs to be developed. I believe we're capable of developing it, but how much investment and variable cost can we put into it? So the bigger challenge is figuring out how to stay in business while implementing it."
Is future CAFE compliance even achievable? How expensive will it be, and how big a role will vehicle electrification play? My next few columns will report comments and opinions on these questions from more than a dozen industry leaders – engineers, designers, marketers, even one CEO – whom I chatted with at Detroit's North American International Auto Show recently.
Ask the average driver whether he or she would like better fuel economy from they car they're driving now, and the answer will, of course, be "Yes!" Ask whether the feds should continue forcing automakers to improve fuel economy on a very aggressive schedule, and most will, again, agree. But many people have little real understanding of what that will take... or what it will cost.
The lasting legacy of America's first major fuel crisis in 1973 remains the federal government's response to it: Corporate Average Fuel Economy (CAFE) laws. The first one required automakers' 1978-model "sales-weighted fleet averages" to be at least 18 miles per gallon. This was no challenge for imports selling mostly small cars, but a tall order for domestics at the time. It meant U.S. makers would have to balance sales of profitable larger vehicles with (usually loss-making) smaller ones, whether or not anyone wanted to buy them. Light truck standards followed for 1979, beginning at 17.2 mpg for 2WD and 15.8 for those with 4WD.
Critics contend CAFE is a sorry substitute for reducing fuel usage through higher fuel taxes, as other countries have done, because it puts the onus on automakers, regardless of market demand, and drives up vehicle prices. Still, CAFE was toughened each year through the early 1980s, softened slightly in the mid-'80s, then leveled off at 27.5 mpg for cars for 20 years, from 1990 to 2010. The truck number accelerated slowly to 20.7 mpg (combined for 2WD and 4WD) for 1996, stayed there through 2004, then climbed again to 23.5 mpg for 2010.Critics contend CAFE is a sorry substitute for reducing fuel usage through higher fuel taxes.
Then, on May 19, 2009, President Obama announced a new "national fuel economy program" mandating a fleet average of 35.5 mpg for by 2016 – a daunting 29-percent increase that moved the requirements of an existing 2007 law forward by four full years. Since 2012 models were essentially done, automakers would have just four model years to achieve it.
A year later, Obama ordered the National Highway Traffic Safety Administration (NHTSA) – which (for some reason) manages CAFE – and the Environmental Protection Agency (EPA) to jointly mandate much tougher standards for 2017-2025. They laid out four scenarios of three-, four-, five- and six-percent annual increases over that 35.5-mpg 2016 level. The six-percent-per-year schedule would have resulted in a CAFE of 62-mpg by 2025, but they later settled on a somewhat more reasonable 54.5 mpg mandate.
Using prices for an array of fuel-efficiency technologies projected by a 2010 National Research Council (NRC) study commissioned by NHTSA, the Center for Automotive Research (CAR) predicted a retail cost of meeting a (then proposed) 56-mpg CAFE at $6,714, which (when added to an estimated $1,500 increase for future safety requirements) would result in 2025-model vehicle stickers that are $8,214 higher, on average, than 2016 prices.
The only good news for automakers is that these new requirements move from a straight fleet average to a much more complex but more rational footprint-based formula, which comprehends the basic law of physics that larger vehicles will consume more energy than smaller ones. A vehicle's footprint is its wheelbase times its average tread width.
And it's important to note that CAFE-compliance fuel-economy numbers (from EPA emissions tests) are higher than the ones in ads, articles and window stickers because the feds mathematically adjust them downward to publishable ones that are better predictors of real-world efficiency. For 2012, for example, a subcompact Honda Fit with a 40-sq.-ft. footprint must achieve an EPA combined test fuel economy of 36 mpg, equivalent to a published 27 mpg, while a Ford F-150 with a 65-75 sq.-ft. footprint must test at 22 mpg for a 17-mpg sticker.
For a feature on this subject for the March/April issue of Motor Trend's Truck Trend magazine, I asked industry experts what this means to full-line automakers. "There is no fixed number that we will have to hit," Jeff Lewis, head of Ford's vehicle energy management engineering group, told me. "[Compliance] will be tied to the footprints and overall mix of our products.
"The input we have been providing [internally] is, 'Here is our cycle plan, here are the footprints of those vehicles, and here is the predicted sales mix.' Our CAFE planning team comes back and says, 'Here is what each of our vehicles needs to deliver to be compliant."
"A given vehicle is assigned a target," explained Gary Oshnock, Chrysler's manager of fuel economy and regulatory affairs. "What a manufacturer does to reach compliance is sales weight – each model will have X, Y or Z number of sales – to come up with an average footprint for its fleet. For a given model year, that average footprint determines the fleet-average fuel economy requirement."
"Previously, when a manufacturer had a single number target, you had two choices of how to improve fuel economy to hit that target," said Michael Love, Toyota USA's national manager of regulatory affairs and powertrain planning. "You could apply technology to a given-size vehicle to make it more efficient, or you could build smaller vehicles. Under this new footprint-based program, your only option is applying technology and making vehicles lighter.""Under this new footprint-based program, your only option is applying technology and making vehicles lighter."
He added that, because the 2012-16 rules require a very aggressive four- to 4.5-percent annual increase, "with five-year product cycles between major changes, every major change will require more than a 20-percent increase in fuel economy. What technologies will get you a 20 percent increase? And what will you need for your next 20 percent?"
The current rules for 2017-25 also require roughly four percent annual increases for cars, while full-size trucks get a "breather" (no increase) through 2020, then annual increases of about four percent for 2021-25. "And there are yet-to-be-defined bonus credits for full-size hybrid pickups," Love explained.
"There is a lot of available technology, but the biggest question is cost," he continued. "All the cheap technology has already been adopted, we're moving into much more expensive technology, and there's always a debate about what those costs will be – huge differences of opinion between costs as estimated by the government and as estimated by the manufacturers – and therefore a big question about whether the public will be willing to pay for it."
"No doubt it's a great challenge," said Chrysler vehicle line executive, Ram Trucks and regulatory affairs, Mike Cairns. "Do we know how to do it today? Not really. There is technology that can get us there, but not cost-effectively. We have to invent things, come up with new creative ideas, as well as improvements and cost reductions to known technologies, plus the weight reductions and aero improvements we have been doing over the years."
"In one sense, it's a very simple formula to improve fuel economy," Ford's Lewis adds. "Get weight out, improve rolling resistance, get better aerodynamics, get rid of parasitic losses in the systems and get as much efficiency as possible out of your powertrains. I think we can figure out how to do it, but it will be costly. Technology needs to be developed. I believe we're capable of developing it, but how much investment and variable cost can we put into it? So the bigger challenge is figuring out how to stay in business while implementing it."
Is future CAFE compliance even achievable? How expensive will it be, and how big a role will vehicle electrification play? My next few columns will report comments and opinions on these questions from more than a dozen industry leaders – engineers, designers, marketers, even one CEO – whom I chatted with at Detroit's North American International Auto Show recently.
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