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Fuel Efficiency Continues to Improve/ Stiff MPG Standards Adopted in the U.S. (CAFE Rules) and Abroad, Business and Industry Trends Analysis

The light truck market, including pickups and vans, is of vital importance due to several factors.  To begin with, for auto manufacturers, gross profits per light truck unit can be many times higher than the profits made from small, highly fuel-efficient cars.  However, light trucks burn more fuel than smaller cars, having an effect on both a manufacturer's total CAFE average fuel efficiency and on the total demand for gasoline.
CAFE (corporate average fuel economy) standards were first issued by U.S. federal regulators in the 1970s as a method of setting average fuel economy standards for carmakers.  Previous standards under the Obama administration called for manufacturers to sell a portfolio of light-duty cars and trucks averaging 54.5 miles per gallon (mpg) by 2025.  In March 2020, the Trump administration replaced the Obama fuel standards with a new rule that calls for fuel economy and emission standards to increase by 1.5% per year (compared to the roughly 5% increases in Obama’s 2012 rule).  In late 2021, the Biden administration raised vehicle mileage standards to 40 miles per gallon by vehicle model year 2026.  However, CAFE rules may eventually become less important since many of the world’s top auto manufacturers have pledged to release many more electric vehicles over the next several years, with some firms promising soon to be all-electric.  General Motors stated it will stop selling gasoline-powered vehicles by 2035, while Volvo plans to do so by 2030.  BMW expects one-half of its new vehicles to be all-electric by 2030.  Volkswagen is investing in standardizing electric components such as batteries and software across its brands, including Audi and Porsche.  The net effect will eventually be a dramatic reduction on the number of gasoline cars and light trucks on the road.
The state of California maintains its own, more stringent mpg regulations, which require cars to achieve 51 miles per gallon in fuel efficiency by 2026.  Many other U.S. states and the District of Columbia have adopted California’s rules.
In the EU, new, stricter standards took effect as of January 1, 2020.  The EU had already voted in 2018 to cut carbon-dioxide emissions from new cars and vans by 20% through 2025 and 40% by 2030.  To reach these goals, many more hybrid and electric vehicles must be manufactured and sold.
When considering the effect of CAFE rules, bear in mind that they are an average of sorts (a “harmonic mean”) for a manufacturer’s entire line of cars and light trucks, and that number is arrived at by a circuitous calculation, with separate considerations for a company’s domestic cars, imported cars and light trucks.  The more that a car maker offers ultra-efficient cars, such as electrics and hybrids, the closer it comes to meeting the rules.  As with all federal regulations, CAFE rules (at 700 pages published in one year alone) are immense and intricate.  For example, firms can earn various “credits” that enable them to temporarily avoid penalties if they do not meet the standards.
In general, meeting such high average fuel efficiency requires a combination of several things.  To begin with, manufacturers are being forced to build much lighter vehicles.  This means that in some cases they will go so far as to eliminate the heavy spare tire and wheel in order to save pounds.  At the same time, they engineer lighter engines, use plastic where possible as a replacement for metals, and look for weight savings in everything from seats to bumpers. 
Ford offers an aluminum-bodied F-150 pickup truck.  The lighter metal cuts the popular truck’s weight by a very significant 700 pounds, making it much more fuel efficient.  Other light weight material alternatives include carbon fiber composites (BMW’s i3 electric car has a carbon fiber composite frame) and magnesium, which is 50% lighter than steel and 30% lighter than aluminum.
A proven gas-saving measure is an inexpensive upgrade from a five-speed to a six- or even eight-speed automatic transmission.  The cost for the enhancement is in the neighborhood of $400 to $800, but the measure can add as much as two miles per gallon in efficiency.
Tough fuel efficiency standards are also affecting the heavy duty truck industry.  The EU adopted new rules in 2019, requiring big rigs to emit 30% less greenhouse gas by 2030 than in 2020.  The European Union is working on establishing a system of credits for the production of zero-emission freight vehicles.  Liquified natural gas (LNG) may be a fuel alternative to diesel that will help cut emissions, while Daimler is working on fuel cell technology for its Freightliner brand.

Internet Research Tip: Hybrid Commercial Trucks:
Hybrid trucks and buses will soon be in high demand by major truck fleet operators such as UPS. For the latest information on pilot projects, technologies and fleet purchases, see Calstart’s web site at
SPOTLIGHT: Motor Scooters
Don’t be surprised to see more and more of your neighbors zipping around on stylish motor scooters.  The motor scooter dates back to post-war Europe, where Piaggio made the first Vespa in 1946.  While scooters have long been extremely popular in densely populated cities outside the U.S., such as Rome and Bangkok, Americans have rarely been scooter buyers, turning instead to cars, light trucks and powerful motorcycles.
However, the difficulty of parking in some U.S. cities and attractive new scooter models are lighting a fire under U.S. consumers.  For example, the Vespa has extremely peppy new models that have room for two people and perhaps a shopping bag, get more than 60 mpg and cost about $4,400.  Honda and Yamaha have jumped into the market with scooters that feature storage compartments for groceries or helmets along with engines that are powerful enough for highway cruising.  Lighter, new scooters with small engines that get up to 120 mpg are offered by other makers for about $3,000.
Electric scooters are also proliferating.  The Swagtron Swagger is a 17-pound carbon fiber scooter with a range of 15 miles and a top speed of 15 mph.  A Taiwanese startup called Gogoro ( is marketing a stylish electric motorbike called the SuperSport.  The bike has an electric motor roughly equivalent in power to a 10 horsepower gasoline engine, can accelerate from zero to 30 mph in 3.9 seconds and has a top speed of 60 mph.  Riders can purchase the bikes but don’t own the batteries.  Instead, portable batteries are swapped out as-needed from a charging station network of “GoStations” for a monthly fee.  Batteries must be authenticated using a smartphone app in order to work.

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