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New Gas Mileage Standard:
54.5 MPG by 2025

Hold onto your hats. The United States Department of Transportation (DOT) and Environmental Protection Agency (EPA) have finally pulled the curtain on their proposed rule for the Obama Administration’s new gas mileage standard. An average of 54.5 miles per gallon (MPG) by 2025 may seem like a huge leap in a short time, but the numbers are not what they appear.

The 54.5 MPG figure is the EPA number for passenger vehicles, not what you’ll see on the window sticker. It’s a fudge factory powered by greenhouse gas emissions. The automakers will be able to use a range of technology incentives in one place to offset their numbers in another, including flex fuel, hybrid, and electric power trains. In real world terms, we might expect a sticker average of 40 MPG for cars that run on liquid fuel. That’s not all that extraordinary, considering all the cars with gas mileage ratings around 40 MPG highway that we can buy today.

And they wonder why so many Americans are so skeptical of what goes on in Washington.

Light trucks (including SUVs, minivans, and pickup trucks) will be treated separately from passenger cars, with a target of 40.3 MPG (EPA). While achieving that goal will likely be far more challenging, it stands to reason that light trucks will, in fact, become lighter than the present day overall. The commercial vehicle downsizing trend that began with the Ford Transit Connect will accelerate, with numbers enhanced by Electric and Natural Gas-powered variants. Say Aloha to the Econoline. We can expect to see competition appear from Ram before long.

There are a lot of numbers being tossed about as to the increased costs of the next generation of fuel-efficient vehicles, but it’s all mud being thrown at the side of the barn. The government is wagering that higher acquisition costs will be quickly offset by savings at the pump. But highway mileage isn’t so much about expensive hybrid systems and battery packs as it is about drive train optimization, lowering rolling resistance and improved aerodynamics. How much does it cost to make a significant change in aerodynamics, from year-to-year?

We have yet to see a modern clean-diesel engine in a highly aerodynamic vehicle here in the United States. With that combination, real-world highway mileage of certain models will exceed 60 MPG highway. With the advent of electric power steering and highly-efficient alternators, parasitic drag is lessened. Advanced stop-start with engine-off gliding will become commonplace.

Forces that argue that the administration has aimed too high are off the mark. A CAFE standard of 54.5 for passenger vehicles is easily obtainable. The automakers and their suppliers know this. While light trucks will present a larger challenge, that too should not be considered a Moon Shot. Consider the motives of those who would tell you otherwise.

Gasoline/Alcohol and Diesel-powered vehicles will dominate sales for the foreseeable future, with the sales of diesel vehicles poised to grow faster than the hybrid-electrics. Take-rates tell the story. The pure electric-powered vehicle niche will grow slowly, although incentives may evaporate if the White House changes hands in the upcoming election.

The biggest change will come from the source of the fuel used, as our nation ramps up ethanol production from sources other than corn kernels. Subsidies may disappear, but overall volume is poised to leap. Renewable diesel fuel production is set to rise, as well.

While the initiatives are noble, the new fuel economy standard ignores the hundreds of millions of passenger vehicles on the road today. Used vehicles outsell new vehicles at a ratio in the neighborhood of 3-to-1.

If America wants to make an immediate change, we must look at common-sense, cost-effective ways to both improve the gas mileage of our existing fleet and to create new jobs. We cannot expect new car sales to recover without a turnaround in the economy, nor can we afford more government incentives.

Sources: NRDC, GigaOm

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