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April 17, 2012

Sales Push Automakers to Build More Fuel Efficient Cars

Ford_Escape_HybridThe Detroit 3 automakers- G.M., Ford, and Chrysler- were caught off guard when gas prices sky rocketed in 2008 and most of us were quick to dump our gas guzzlers for more fuel efficient cars. Since then, it looks like these automakers have abandoned their “bigger is better” mantra and are focusing on giving us cars and trucks that won’t drain our wallets at the pump.

Most Americans delayed buying a new car because of the recession – right now the average car on the road is a record 11-years-old.  A stronger economy and more fuel efficient vehicle choices are leading to new car and truck purchases despite rising gas prices. Industry analysts predict higher than expected car and truck sales this year.  Researchers at the University of Michigan found that new vehicle purchases in March had a combined fuel economy of 24.1 mpg, up from 20.1 mpg in Oct 2007.

Many models that were redesigned to improve fuel efficiency are now the top sellers. The Prius C’s monthly sales more than doubled in March 2012. Ford F series truck sales are up due to Ford’s breakthrough EcoBoost technology that increases engine efficiency.  G.M. is scrambling to meet demand for the more fuel efficient four cylinder Equinox, forcing dealers to order the six cylinder Equinox that may not sell in the face of rising gas prices.

The Chevy Volt hybrid electric car saw high sales in March 2012 as well.  The good news came after G.M. announced a temporary hold on Volt production that would temporarily lay off employees.  It’s clear that advanced technology cars like the Volt are providing much needed relief at the pump.

G.M. is also expanding its business into the small car market and offering a number of different models including the Chevy Spark, Sonic and Cruz,  the Cadillac ATS, and the Buick Verano, to name a few.  The company leads in mild hybrids that are cheaper to make but offer improvements in fuel efficiency, such as the Buick Lacrosse and the Regal and Chevy Malibu.  Mild hybrids typically have a smaller battery and a weaker motor than a regular hybrid.

Ford, a leader in powertrain technology, plans to offer its Ecoboost technology in 90 percent of its U.S. products within a year or two.  The automaker also leads in start-stop technology that turns the engine off when you’re at a complete stop and restarts the engine when you push down on the accelerator. 

While past lessons are helping, the main force pushing automakers to innovate is the national program developed by the Obama administration to improve fuel efficiency and reduce the carbon pollution emitted by new cars and trucks.

The first phase of the program from 2012 through 2016 require automakers to meet a 250 grams per mile carbon pollution standard, equivalent to a fleet average fuel economy of 35.5 mpg, while the second phase - due to be finalized this summer – sets a carbon pollution standard of 163 grams per mile, which is equivalent to a fleet average fuel economy of 54.5mpg (which will deliver an on road fuel efficiency of about 40mpg).  

A report by Ceres - a network of investors, companies and public interest groups- found that meeting the standards will likely boost sales for the auto industry as a whole leading to billions in profits.  Still the National Automobile Dealers Association (NADA) continues to oppose standards even though dealers are already selling more fuel efficient vehicles this year that were produced to meet standards. 

Let’s hope NADA will stop blocking savings at the gas pump, and that increased profits is enough incentive for automakers to keep delivering the more fuel efficient and money-saving cars and trucks that we want.

-- Kesaaraa Wijeyewickrema, Sierra Club Green Transportation Campaign


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