Are fuel economies getting better?

This again has become a long post. Skip to the conclusion if busy.

CAFE

After watching Ray Kurzweil's presentation at TED, I started to wonder if automotive technological parameters are growing exponentially too. Kurzweil's thesis (what I gather from watching his TED talk) is that technological parameters, such as processing power (flops), are growing exponentially independent of the implementation (vacuum tubes, transistors, etc.). He lists many examples during his talk but none were automotive related so I decided to look into it further. In exploring historical fuel economy of cars, I came across CAFE.

"Corporate Average Fuel Economy (CAFE) is the sales weighted average fuel economy, expressed in miles per gallon (mpg), of a manufacturer’s fleet of passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8,500 lbs. or less, manufactured for sale in the United States, for any given model year. Fuel economy is defined as the average mileage traveled by an automobile per gallon of gasoline (or equivalent amount of other fuel) consumed as measured in accordance with the testing and evaluation protocol set forth by the Environmental Protection Agency (EPA)."

In short, CAFE represents the average fuel economy of all passenger cars (under 8,500 lbs) sold in the US at any given year. Further more, CAFE was created as part of the "Energy Policy Conservation Act" of 1975 which in response to the oil crisis of the early 70s, set a goal to double the fuel efficiency of cars by 1985 and there were financial penalties for manufacturers who failed to meet the goal.

Here is the tell all chart:

I took the above plot from Wikipedia since it's cleaner than anything DOT had and interestingly included the gasoline prices from the past too (source). Note, it only shows the CAFE for passenger cars, which is separate from light trucks which also has it's more lenient CAFE standard.

As you can see, fuel efficiency practically stalled since the mid 80s, when the CAFE standard was not changed. Automotive companies simply did not have the motivation to keep creating new technology for fuel efficiency. What's also interesting is that while no Japanese or US company incurred any penalties, European automakers habitually fall below the CAFE standard and chose to pay the fines instead (I presume this is to avoid selling small cars and risk their luxury brand image, which is why 1-series, A-class, B-class is not sold in the US).

Automotive trends

The DOT also keeps numerous data on vehicles sold in the US, and this may break a lot of the notions about current trend of automobiles.


We (or at least I) had this notion that cars are getting bigger and bigger recently with all the SUVs on the road, but surprisingly, they used to be a lot bigger (and roomier). We're slowly returning to the pre-oil shock days, but not quite there yet.

On the Engine side, displacement decreased significantly in the late 70s and remained that way, but horse power has been climbing ever since. Put two and two together:

And you can see that cars are becoming more and more powerful for their size and engine displacement.

So it's not so much the fuel efficiency that is increasing, but the engine efficiency that's improving. This may have a significant impact in the next few years since engines are much more powerful for their displacement, companies have room to decrease the engine size and vehicle weight and achieve better fuel efficiency (same thing that happened in the late seventies, notice the drop in engine size and power).

Of course as seen by the earlier graph, companies don't have any incentive to increase fuel efficiency unless motivated (and there is some market motivation now), which brings up the question of CAFE in the future.

Next step in CAFE standard

For the first time in 32 years, new CAFE standards were written into law pushing required fuel economy up to 35 miles per gallon by 2020. If history is any indicator, this should spur another increase in fuel economy that has stagnated since the mid-80s. As for Ray Kurzweil, not all technological parameters are increasing exponentially (though I remember reading somewhere that technological shifts happen in small S-curve jumps, and we may be seeing another jump in fuel economy coming with this new law).

Conclusion

• After the early 70s oil shock, US law passed that required automakers double fuel economy and accomplished just that.
• However, with the CAFE standard not changing, fuel economy has stagnated since the mid 80 to this day.
• In the mean time, cars have gradually become bigger but more notably engines have become more efficient (more horsepower per displacement) while their size remained about the same.
• New law passed in Dec. 2007 will again raise the CAFE standard to 35 mpg by 2020, giving the automakers financial motivation to increase fuel economy.

Side note: Another reason why I should wait to buy a new car, to add to the list I've grown while working in the auto industry.