Rising Gasoline Costs Vs. Fuel Efficiency
How much would drivers save if passenger vehicles already met fuel economy standards that will be in place in 2025?
In 2012, American drivers spent an average of about $1,870 over the course of the year on gasoline to fuel their cars. That is close to the highest level ever.
We wonder: How much less would each driver spend if today’s passenger vehicles were already as efficient as the fuel economy standards set by the U.S. government for 2025?
If the entire U.S. personal vehicle fleet today were already at the fuel economy standard of 54.5 miles per gallon (MPG) set by the Obama Administration in August 2012 for 2025, the average driver’s fuel costs would be 55% less, according to calculations by the Environmental Defense Fund.
That would mean a savings of $1,036 — equivalent to about 2% of the median U.S. household’s annual income.
If the U.S. car fleet were similarly efficient as Europe’s is today, at around 40 MPG, the average U.S. driver would spend a total of $982 each year on fuel — or 48% less than they currently do. EU regulations are set to rise to 42 MPG by 2015.
Europeans often drive smaller cars, use subways and commuter trains to get to work and rely more on trains for longer-distance trips than Americans do.
But the issue before Americans is pretty straightforward: If European car makers can build cars that are so fuel efficient, there is no reason why U.S. manufacturers should not be able to do the same. It would clearly save U.S. households a great deal of money.
The 247 million passenger vehicles on U.S. roads today have an average fuel economy of 21.0 MPG. Of that total, 137 million are passenger cars. The remaining 110 million are light-duty trucks, which include sport-utility vehicles, pickup trucks and minivans.
The 54.5 MPG U.S. fuel economy standard to be met by car manufacturers by 2025 is close to three times the current level of fuel efficiency.
However, that target will only apply to all new vehicles sold at that time. Since personal vehicles are typically in use for about 17 years, it will take quite a while before every driver in the United States has a much more fuel-efficient vehicle.
It is reasonable to assume a fuel economy of around 25.6 MPG for the entire passenger vehicle fleet in the United States in 2025. Each driver would thus spend 16% less a year on gas on average (or $304) in 2025.
Since 2009, the fuel economy of the average U.S. passenger vehicle has improved by almost 3% — from 20.4 MPG to 21.0 MPG.
A key part of the reason is that car manufacturers are using lighter materials to build new cars. Lighter cars mean moving around less weight, which improves their fuel economy and reduces raw material consumption.
That has helped U.S. drivers to spend 1.5% less (about $30) a year on gasoline, according to calculations by the Environmental Defense Fund.
This assumes that the 11,218 miles that American drivers drive on average each year does not change and that the price of gas remains around the recent national average of $3.50. When gas prices rise above this level, the incentive to drive more fuel-efficient cars naturally increases.
Editor’s note: This Globalist Quiz is based on data and analysis provided by Gernot Wagner and Beia Spiller of the Environmental Defense Fund.
To listen to The Globalist’s Stephan Richter discuss this quiz with Marketplace Morning Report host Jeremey Hobson, click here to open a pop-up media player.