Top 5: Americans Are Falling in Love with CUVs

08.30.18 | Blog | By:

Hello friends! Here’s my monthly take on the five most interesting developments in future fuels and vehicles trends. Items I selected include: 

  • America has fallen out of love with the sedan and in love with the cross utility vehicle (CUV).
  • Japan is getting behind the concept of flying cars in a big way — it wants to demonstrate, commercialize and deploy them in the country within a decade.
  • Shifting from road freight to rail may hold potential for decarbonization in this sector, according to a new study.
  • The California state legislature is about to approve and present to Governor Jerry Brown for signature a bill that would require a 100% carbon-free electricity by 2045. The state’s at 29% right now.
  • Dirty air can literally make you dumber, according to the findings of a study just published in the Proceedings of the National Academy of Sciences.

1. The Wall Street Journal: America Has Fallen Out of Love With the Sedan (Subscription Required) — This article discusses in depth a trend we’re all experiencing, which is the consumer preference shift from sedans to sport-utility vehicles (SUVs). While less than five years ago there was an even split between the two, today SUVs and light-duty trucks make up over 60% of sales. That number continues to climb. The shift has the auto industry scrambling, the article notes, while also highlighting Ford’s and FCA Chrysler’s moves to eliminate sedan models from their line ups.

But wait, it’s not exactly traditional SUVs as you might think of them that are really growing. A Fuels Institute study released last month found that actually, there is more of a shift toward cross utility vehicles (CUVs) than larger SUVs. CUVs now represent 35% of the light-duty market, and the Fuels Institute expects this trend to continue. Pick up sales are actually declining and the SUV market has been cut in half, shown in the figure below.

“Americans have found ‘cars’ that better suit their needs in the form of CUVs. While many are technically classified as a ‘light truck,’ CUVs are built on a car frame and boast many of the economic advantages of a car,” the Fuels Institute noted. That has implications for emission standards, but in particular, fuel economy standards.

And speaking of which, the National Highway Traffic Safety Administration and EPA released their joint proposal on fuel economy/GHG standards in the Federal Register this month. No surprises there: the agencies propose to hold fuel economy standards to model year 2020 levels until 2026. However, they also offered another seven alternatives they are also considering and are going to take comment on that range from holding the standards the Obama Administration approved in place (unlikely) to a range of improvements in between those standards and what the Trump Administration is proposing.  My guess is that it will be one of those options and not what has been proposed.

As we all know by now, the Administration, apparently emboldened by how the judiciary is shaping up and what it sees as bright prospects for confirming Brett Kavanaugh to the Supreme Court, also decided to revoke California’s waiver to set its own fuel economy/GHG standards. I’ve reviewed the lengthy, frankly tortuous and very legalese analysis, and my conclusion is the Administration has a tough road ahead of them in court.

2. Bloomberg: Uber and Airbus Enlist in Japan’s Flying-Car Plan — It looks like Japan will be one of the first countries to get behind the development of flying cars and is putting together a consortium including Uber, Boeing, Toyota, ANA Holdings, Japan Airlines, among others to commercialize and deploy the vehicles within the next decade.  The government is holding meetings this week to chart the pathway forward. If Japan can get behind the development of the flying car, setting safety and other specifications and demonstrating that it works, other governments will quickly follow. Check out the story for a video demonstrating the technology.

3. Kaack, et al., Environmental Research Letters: Decarbonizing Intraregional Freight Systems with a Focus on Modal Shift — I’ve written on numerous occasions (see e.g. posts May 9, 2018; July 17, 2017; Jan. 31, 2017) about the growing (really spiraling in the future) demand for heavy-duty trucking but the difficulty of decarbonizing that sector. While most of the focus on decarbonizing transport has been on the light-duty sector, the real challenge, as IEA has also noted will come from freight, aviation and the marine sectors. This open-access paper takes on the question of decarbonization in freight, presenting five strategies (including low carbon fuels) but settling on a modal shift to rail as a the best potential option for decarbonization, and of course, there’s much more to the analysis than what I briefly highlight here. The authors note:

“Rail intermodal transportation holds great potential for replacing carbon-intense and fast-growing road freight, but it is essential to have a targeted design of freight systems, particularly in developing countries. Modal shift can be promoted by policies targeting infrastructure investments and internalizing external costs of road freight, but we find that not many countries have such policies in place.”

The current world road and rail modal split is around 60:40, and most countries are experiencing strong growth in road freight and a shift from rail to road (not the other way around). The figure below shows the split by country. The authors say rail intermodal transportation “holds great potential” for replacing carbon-intense and fast-growing road freight, but they say it is essential to have a targeted design of freight systems, particularly in developing countries. A modal shift can be promoted by policies targeting infrastructure investments and internalizing external costs of road freight, but not many countries have such policies in place. 

Modal Shares of Road-Rail Globally

Notes: The color gradient indicates the fraction of road transportation of total land freight activity, with median values of the ranges given in the legend. Orange corresponds to a larger share of road freight. For the grey-colored countries, only the rail freight activity is available. Black indicates countries that do not have a rail system and do not report road freight activity data. Countries with no data are in white. Source: Lynn H Kaack et al 2018 Environ. Res. Lett. 13 083001.

4. gtm: On to Governor Brown’s Desk: What 100% Clean Energy Means for California — This story details legislation passed 44-33 in the California Assembly this week that would require 100% carbon-free electricity by 2045, but also the challenges and opportunities the measure is going to present for the state. A similar measure passed the Senate in May 2017, and authored by Senator Kevin DeLeón (D), who is currently challenging U.S. Senator Dianne Feinstein (D) in this year’s federal mid-term elections.

The Senate and Assembly must still reconcile the two bills, but that is expected to happen with final legislation presented to Governor Jerry Brown (D) for signature by the time the legislative session closes tomorrow, and he is expected to sign it.  The state already had a mandate in place to generate 50% of its electricity from renewable sources by 2030. Last year, the state got 29% of its power from renewables with another 9% from nuclear and 15% from hydropower. Natural gas provides another 34%.

5. The Guardian: Air Pollution Causes ‘Huge’ Reduction in Intelligence, Study Reveals The research for this study, published in the Proceedings of the National Academy of Sciences, shows that “dirty air” (presumably but also nitrogen dioxide (NO2)and sulfur dioxide (SO2), but the article isn’t entirely clear) may impede peoples’ cognitive abilities, and the impacts become more pronounced as people age. The impacts are also greater on low-income men.

The study analyzed language and arithmetic tests conducted as part of the China Family Panel Studies on 20,000 people across the nation between 2010 and 2014. The scientists compared the test results with records of NO2 and SO2 pollution. The longer people were exposed to these pollutants, the bigger the damage to intelligence, with language ability more harmed than mathematical ability and men more harmed than women. Transport was cited as a source that needs transformation through cleaner conventional fuels and vehicles, among other solutions.  That wasn’t the only air pollution-related study released this month. Check out these headlines from this month alone:


Tammy Klein is a consultant and strategic advisor providing market and policy intelligence and analysis on transportation fuels to the auto and oil industries, governments, and NGOs. She writes and advises on petroleum fuels, biofuels, alternative fuels, automotive fuels, and fuels policy.