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Friday, November 28, 2008

Car Efficiency--What can it do for US? For you?

I hear a lot about fuel efficiency, but it always seems to be in the context of global warming, or some sort of larger debate. Let's strip that away, and just look at some raw facts here. I wanted to see what kind of impact fuel efficiency alone could have in retail car and truck sales. The result? A little troubling.

Okay, so here's what I have learned:

-The average person drives 12,500 miles per year
-The average automobile gets 25 miles to the gallon
-Each year there are about 16 million new cars purchased in America (although 2008 is shaping up to be a significant decrease to 14 million new cars. The first one of this size in at least 10-12 years).
-The average automobile has a 17 year life (that sounded a little high, but when trucks, and other vehicles are factored in, it didn't sound unreasonable. I still know people with a 1991 Taurus kicking around...)

The average driver looks a little like this:




Let's assume that we can get mileage standards up THIS YEAR alone 5 miles, from 25 to 30 mpg. But let's assume that some people will continue to purchase cars like the Toyota Prius (with a 45 MPG average) or the Toyota Camry Hybrid (35 MPG average).









What does that mean for the average consumer? Let's see:

Not bad, but that may be a little pricey, especially in these times. People may not want to buy cars and trucks unless they HAVE to. Can the government provide incentive? Stronger tax breaks? Tax exemptions, even? Possibly. It couldn't hurt, given where we already are.





So let's say, 70% of all new cars are sold with a 30 MPG average, and the rest are between 35-45 MPG. Let's get a little aggressive here.


Here's what we would save in a year--roughly 38 million barrels of oil. Which would be something we could build on each year, and significantly cut into that demand. Not bad, right? But what does this mean about our dependence on foreign oil? Check out this site

http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption

You will see that the US uses 20.8 million barrels of oil a DAY. All this effort would lead to about 2 days of oil saved a year. Not exactly the stuff of legends here.

It's a little disconcerting, when you break it down. But there is a silver lining here.

1. The US IMPORTS 10.4 million barrels a day, which means we would really be saving about 4 days a year of oil if we continued to push towards higher CAFE standards.

2. The 4 days a year savings would represent a yearly savings, so next year it would be 8, then 12, then 16, and so forth. I recognize that this assumes the car inventory will stay flat, which it won't. However, the hope is that trends like 2008 will persist over the next few years on new purchases (down 14%) and heightened awareness of fuel usage continues to increase.

3. We have got to start somewhere. Every little bit helps.

2 comments:

Anonymous said...

A! ask your Senators and Congresspeople
WHY did the worlds greatest military power FAIL to defend even its own HQ?

Anonymous said...

It's a nice thought. What is the bigger driver in oil prices though (from the demand standpoint?) Is it gasoline? Oil we use to heat our homes? Or.. emerging market demand increases from US consumer demand of foreign products?

Also... one key factor is innovation. The more the consumer buys based on efficiency, the more efficient the vehicle become. Remember when having a 30MB hard drive was standard on an IBM PC in your house? Obviously fue efficiency is not going to grow in multiples of hard drive capacity. However, I wouldn't be suprised if there is a 100mpg car in the future.