Four years after the strict Corporate Average Fuel Economy (CAFE) standards for 2025 were established, a study finds that the goals will be easier and less expensive for automakers to implement than originally anticipated.
The National Highway Traffic Safety Administration (NHTSA) commissioned the study, evaluating the cost and effectiveness of many fuel saving technologies to see how well the industry is progressing towards these goals.
The results aren’t necessarily surprising – NHTSA Administrator David Strickland said two years ago that less than 3 percent of vehicle sales would need to come from plug-in electrified vehicles to meet the fuel economy guidelines.
But the new analysis provides an important temperature check of how the industry is managing the costs and technologies associated with increased fuel economy and lower emissions.
“This is a good early indication that things are on track to meet the fuel efficiency goals on time and at a reasonable cost. There were lots of claims flying back and forth early on about how much this would cost, and now we know it’s going to be very affordable by comparison,” said Roland Hwang, director of the energy and transportation program for the Natural Resources Defense Council.
Fewer Electrified Vehicles Required
In its report, NHTSA acknowledged that battery-electric, plug-in, fuel cell and hybrid powertrains are an ideal way to reach the 2025 standards.
“Electrification of the powertrain is a potentially powerful method to reduce fuel consumption and hence greenhouse gases,” said the study.
But significant improvements in other technologies will reduce the industry’s reliance on electrification alone, said NHTSA. Lighter materials, turbochargers and more efficient transmissions are a few examples given by the study as technologies that can help gasoline and diesel powered vehicles become more fuel efficient.
Costs Lower Than Predicted
When NHTSA studied per vehicle costs in 2011, it estimated that automakers would need to spend more than $3,000 to ensure a midsize car will meet the 2025 guidelines. These same costs are now expected to be cut in half, with NHTSA’s calculations falling between $1,200 and $1,700 per car.
Automakers Disagree With NHTSA’s Optimistic Outlook
The number crunchers for various automakers aren’t as optimistic about the ease of reaching CAFE standards, and several have argued that the 2025 regulations will still be a challenge to meet.
“Today, automakers are using every technology available that can improve mileage and still keep vehicles affordable for Americans,” said Mitch Bainwol, a spokesperson for carmaker trade group Auto Alliance. He noted that carmakers need to analyze the study’s results to “see how they square with the real-world challenges faced by engineers in our testing labs.”
“Looking ahead, we will need to see much greater sales of our most energy-efficient vehicles, including electric vehicles, to meet the steep fuel economy standards,” said Bainwol.
The difficulty in posting enough EV sales, along with complaints that electrified vehicles have a low profit margin, are two grievances commonly raised by car manufacturers.
But evaluations like NHTSA’s suggest that automaker’s issues with the CAFE regulations may be diminishing. If so, their protests may lose weight during the midterm review.
“[The study] shows that you can achieve these fuel economy targets with a conventional vehicle, using normal engines, and to do so cost effectively,” said Dan Becker with Center for Auto Safety, an advocacy organization.
“The industry keeps saying we need to change the rules at the midterm review because no one wants to buy an electric car,” he added. “But the rules don’t require selling electric cars, and this report shows you really don’t need them to get there.”