June 21, 2012

The fuel economy of new cars, May 2012

The good news: New cars sold in the US in May 2012 have an average fuel economy of 23.3 mpg, according to the ongoing survey by TrueCar.com. That's down a bit from the high of 24.1 mpg attained last March, but 6% higher than the 21.9 mpg reported a year ago for May 2011.

Meanwhile, across the Atlantic new cars bought in 2011 are about 3% more frugal than those purchased in 2010. In Europe they like to measure fuel efficiency in terms of CO2 emission (after all, that's what the emissions standards are mostly about): in 2011, new cars averaged 136 g CO2/km, which translates to 40 mpg for cars running on gasoline, and 46 mpg for diesel cars.

This means that my diesel-fueled 2012 VW Golf TDI, which is giving me close to 40mpg around town, is on the guzzler side of the European average for 2011, even accounting for the fact that the European test standard overestimates the fuel efficiency.

In a few years my car will be embarrassingly short of the EU standard, which is set to go, in steady decrements, to 95 g CO2/km by 2020. That corresponds to 57 mpg for gasoline, and 66mpg for diesel cars.

Predictably, European carmakers are grumbling about this, and warn about the cost of those future gas sippers. But a 2011 study by the CARS21 Group has found that the vehicle price increase threatened by carmakers in the past, have not materialised, while CO2 emissions did get curbed.

European consumers, on the other hand, are happy with the lower CO2 emission requirement, because it means that more gas-frugal cars will be made available which will save them big at the pump. Indeed, EU consumer groups are sanguine about a 70 g CO2/km standard proposed for 2025.

Interestingly, European trade unions have also welcomed the stricter standards: they reason that if carbuilding technology in the EU gets left behind by the rest of the world, it's bad news for EU manufacturing and development, and bad for the people working in those sectors.

Just look at what has happened in Detroit since the 1980s, when the CAFE standard got stuck at 26 mpg (inched up to 27.5mpg between 1990 and (2010).

These same reasons are cited by groups in Japan, as it is also working to update its fuel economy standards, from 16.3 km/L (38 mpg) in 2011 to 20.3 km/L (48 mpg) in 2020.

In the US, the CAFE rules require new cars and light trucks to average 54.5 mpg in 2025 (100 g CO2/km). Here as in Europe, carmakers have warned that those requirements would make cars a lot more expensive. But consumers know better, and realise that with the number of miles logged here every year, we will feel the benefit of every improvement in fuel economy right in our wallets - especially since we've seen the price of gas go up the last few years, even if it is still nowhere near European levels. The Consumer Federation of America can list 10 reasons why the CAFE2025 standard will benefit drivers. And CelloMom shares a few tricks for buying a gas sipper for less.

By the way, even though the price of gasoline has eased in the last few weeks, don't count on the price of gas to go way down in the long run. The price of oil is currently well below $100 per barrel, but as the world's large economies work themselves out of the current doldrums, demand will send it up again: Because the marginal production cost, the cost to produce an extra barrel of oil, is now approaching $100 per barrel.

Finally, I hope you realise that all the numbers bandied about by these governments are overstatements of the actual on-the-road fuel efficiency you can get in real life. Even the 54.5 mpg quoted everywhere for the US CAFE2025 rules is higher than the EPA numbers you see on the stickers on new cars (which are accurate).


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