Saturday, September 8, 2012

Update on The More You Pay, the More You Save

    I just found some fascinating information on those new fuel efficiency standards that I just recently wrote about.  An August 28th article in USA Today reports the following about the 54.5 MPG fuel efficiency standards set to take effect in 2025:
What you won't see is anything close to 54.5 mpg on the window sticker of 2025-model cars and trucks.
Why your real-world mileage will vary:
The government mileage rating on the new vehicle window stickers will be in the high 30s to around 40 mpg in combined city/highway driving. The window-sticker mileage rating is arrived at using a formula meant to match real-world driving. By contrast, the federal mileage rule -- so-called CAFE, for corporate average fuel economy -- is based on lab tests for combined city and highway driving...
The new regulation isn't strictly a fuel-consumption rule. Rather, it limits the amount of carbon dioxide a vehicle may emit to 163 grams per mile, Hwang noted. The amount of carbon dioxide coming out the tailpipe, however, is directly related to the amount of fuel burned, and translates to the 54.5 mpg standard.
But there are credits automakers can use to reduce the actual laboratory-tested mpg it must achieve. For instance, a credit of as much as 5 mpg is available for making more efficient air conditioning that uses coolant expected to be more benign environmentally than the HFC now used. It, in turn, was expected to have been better than the CFC -- freon -- it replaced in the 1990s...
Not each new vehicle has to hit the regulatory number. Instead, all the vehicles an automaker sells must average at least the government number. Thus, a company that specialized in small cars would have an easier time reaching an average of 54.5 mpg than a company that sold mostly bigger, heavier vehicles.
    Isn't that great?  I suppose it should not surprise me that 54.5 = 40 in governmentese.  And at the lower mileage of 40 MPG, gallons saved over the life of a vehicle drops from 2,247 to 917, bringing the $8,000 savings the government trumpeted to about $3,000.  Hmmmm... and why does $3,000 sound familiar?  Oh, yes.  That's about how much extra the average car will cost in order to achieve the increased fuel efficiency.  And people say the government doesn't know how to break even.

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