The 2025 Deadline

As the chief economists at Ford mentioned several times Congress has put in place the seemingly unreasonable legislation that by 2025 car fleets must have an average fuel economy of 54.5 mpg. At Federal Mogul we saw how engineers are working hard to increase the efficiency of technology to make new more frictionless coatings, parts that can withstand more heat. But at some point more breakthroughs in technology will be essential to moving fleets to 54.5 mpg from where they are currently, around 20.

Below is how the top eight manufacturers fared comparing overall MPG, broken out by car and truck MPG:

Average MPG Average Car MPG Average Truck MPG
Manufacturer Apr-13 Apr-12 YoY Apr-13 Apr-12 YoY Apr-13 Apr-12 YoY
Chrysler 21.2 20.1 1.0 24.3 23.1 1.2 19.8 18.4 1.4
Ford 23.2 22.2 1.1 29.1 26.4 2.6 20.1 19.6 0.4
GM 21.5 21.5 -0.1 25.6 25.1 0.4 19.1 19.1 0.0
Honda 25.9 25.3 0.6 29.7 28.0 1.7 22.7 22.6 0.1
Hyundai 27.3 26.9 0.3 28.8 28.5 0.3 22.7 23.2 -0.5
Nissan 25.1 23.2 1.8 29.9 26.5 3.4 20.7 19.9 0.8
Toyota 25.0 25.4 -0.5 30.4 30.9 -0.6 19.9 19.5 0.4
Volkswagen 25.9 26.1 -0.2 26.7 27.1 -0.4 22.0 21.7 0.3
Industry 23.7 23.3 0.4 27.7 26.9 0.8 20.3 19.8 0.5

The list above shows the average mpg of new car sales for the company. The focus on sales rather than averaging the make is important because it helps us combine product offering with consumption patterns. Yearly increases of .4 mpg have tapered off but at the same time a car that has more money poured into its technology to make it more efficient is more expensive. This graph helps illustrate the frustration the Ford economists had. By forcing the producers to change and not the consumers there is going to be conflict between fuel economy and car price leading to an inefficient market. Raising gas prices to change preferences would help car companies reach the 2025 deadline faster.

http://www.foxnews.com/tech/2013/05/09/far-future-tech-trends-2025/

2 comments to The 2025 Deadline

  • The fuel economy regulations will be footprint specific, rather than for cars / trucks or the entire fleet of a manufacturer. So I’m not sure that averaging across all new vehicles will actually capture this regulatory shift, but I’ve not tried to read through the (lengthy) details. However, it’s not just the US that pushes for fuel economy…again, there’s a huge amount on this issue in the engineering and in the public policy literature.

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