Amid record high oil prices and concerns about climate change, cars and light trucks sold in the United States hit a new mileage record for the 2007 model year, with average fuel economy improving almost 1 mile per gallon.
According to a report by the National Highway Traffic Safety Administration released late last month, fleet-wide fuel economy in the United States averaged 26.6 mpg, up 3.5 percent from the 25.7 mpg averaged in the 2006 model year. Passenger cars averaged a new high of 31.2 mpg, while light trucks averaged a separate record of 23.1 mpg.
So which companies paid fines for going over US government mandates for Corporate Average Fuel Economy (CAFE) standards? Not American ones. Of course not Japanese ones. Germans: Daimler, VW, BMW, Porsche. They don't have the high European fuel taxes to incentivize their American customers to buy more of their smaller cars. Yes, even VW sells less fuel efficient cars in the US than the American big three. Also, Maserati and Ferrari paid fines too.
That average fuel economy on new cars was based on buying patterns over the whole year. I'm expecting a bigger shift in buyer preferences for the 2008 model year because where gasoline prices are at the start of 2008 and where they are likely to go by summer. Normally gasoline prices hit their bottom in winter and their top in summer. See this chart of weekly US gasoline prices from mid 2005 thru 2007. Note how starting in March each year gasoline prices surge into the summer driving season.An LA Times article shows why we should expect higher prices this spring and summer:
Kloza said that nationally for the last 25 years, the difference in the price of gas from the winter low to the spring high has been about 59%.
"I don't think we will see a typical surge, and we don't have to," Kloza said. With an increase of just 30%, he said, "you're talking about 75 cents a gallon more from where they are now."
A 59% surge would take California over $5 and Alaska over $6. I'm expecting demand destruction to start becoming a lot more visible though. So prices will probably stay under $5 per gallon in the lower 48 American states. But however high they go they'll serve as a wake-up call to the American car buying public. Expect to see a lot more hybrids, diesels, and subcompacts sold.
While fuel efficiency increases will help what we need as a more permanent solution is to stop using oil entirely. The first real step in that direction (and, no, corn ethanol doesn't count) will come in the form of pluggable hybrid electric vehicles (PHEVs). General Motors will probably be the first car company to release a mass market PHEV in the American market with their Chevrolet Volt. But GM chairman Richard Wagoner isn't sure that GM can get the Volt design done and into production by the end of 2010.
"We continue to put massive resources into production as soon as possible," said Wagoner, responding in writing during an online chat session to kick off the automaker's 100th anniversary. "2010 would be great, but (we) can't guarantee that at this time. We'll keep you posted regularly on our progress."
GM vice chairman Bob Lutz told Jerry Flint of Forbes a similar story on the timing of the Volt introduction. GM is not sure they will get the Volt out by the end of 2010.
GM's current schedule calls for production in late 2010 or early 2011.
"It probably won't be a flawless launch," Lutz warns. Interpretation: Expect delays and possible teething problems.
On a scale of 1 to 10, he says his confidence level is a 9.5 that GM can build the Chevy Volt, the name of this hybrid electric car. The production date is another matter; Lutz's confidence drops to a 5.5. "We're holding people's feet to the fire for the very end of 2010 into 2011. But that can slip, depending on how the development goes."
I think it extremely likely GM will produce this car. It normally takes 3 to 4 years to develop a new car design. They are trying to develop one that includes radical innovations. So a schedule slip is to be expected under the circumstances. They sound pretty committed.
DETROIT — General Motors is down to the details on the production version of the Chevrolet Volt, says Edward T. Welburn Jr., the automaker's vice president of global design. Welburn told Inside Line on Thursday that the "Volt is our absolute highest priority."
My worry: world oil production might start declining before PHEV vehicles become available in the millions. We live in a world where the development of problems and the development of solutions are in a race. How big will the problems get before the solutions reach maturity? When it comes to Peak Oil the answer is still not clear to me. But I expect things will get worse for at least several years before getting better.
|Share |||Randall Parker, 2008 January 05 02:47 PM Energy Transportation|