“.. past performance does not necessarily predict future industry trends” – sounds like advice from your stock broker? Nope, this is the EPA, talking about light-duty fuel economy and greenhouse gas (GHG) emissions. Download the reports here (there is also an executive summary).
This is a very well written document. Beyond the basic information on the trends in fuel consumption, it provides a good primer on how fuel economy is measured (compliance vs. real-world), the various credits, and the averaging, banking & trading (ABT) program which allows OEMs to make up for CO2 deficits. Perhaps most informative is the information on various technologies that are being pursued to improve ICE efficiencies.
Briefly, OEMs have continued to innovate and exceed the standards while delivering improved performance : Real-world CO2 continues to decline at ~ 1.7% per year averaged over 2004 – 2017, while simultaneously improving vehicle power by 11% over the same time. And yet, there are several technologies which have yet to be widely adopted. Turbocharging is currently only deployed on 31% of vehicles, direct injection on ~ half the vehicles, CVT on 22% and cylinder deactivation on only 12%, to give a few examples.
Looking ahead, the < 2% reductions in CO2 are not going to cut it. CO2 targets in most major automotive markets will require 3 – 6% reductions every year. Still, there is reason to believe the 2030 limits can be met through ICE improvements and some electrification. At the SAE WCX last year, EPA presented a good study on their benchmarking on the Honda 1.5L turbo engine and used it to project further improvements possible. See this SAE paper. The simulations predict that a 2025 mid-size car could achieve an additional 20 – 30% improvement in fuel economy through the deployment of advanced engine technologies, lowering of aerodynamic and rolling resistance by 10%, start-stop technologies, weight reduction by 7%, and higher efficiency accessories. Note that the list does not even include mild hybridization, although that would certainly help even further. And it certainly does not include some of the more advanced combustion technologies either recently introduced (e.g. variable compression ratio, spark assist charge compression ignition) or in development (lean burn, water injection, octane on demand, two-stroke opposed piston, dedicated EGR, etc).
A comparison with Europe: Cars in the EU averaged at 119 g/km on the NEDC cycle in 2017, ~ 12% lower than the corresponding U.S. figure of 135 g/km. When adjusted from the New European Drive Cycle (NEDC) to the World-Harmonized Light-Vehicle Test Procedure (WLTP, the new test procedure), the CO2 figures are expected to increase by ~ 10%, so the fuel economy is likely similar across the continents despite differences in the footprint vs weight-based standards. Another trend to note is that SUVs continue to gain market share across the world (43% in the US), so cheap gas and improving efficiency seems to be driving consumer choice to larger vehicles. See this article.
Finally, something that is out of scope of the EPA document but should be highlighted is that tailpipe emissions of hydrocarbons, NOx and particulates have continued to decline to near-zero levels (the SULEV30 limits are 30 mg/mi of combined HC and NOx, vehicles are already certified to this level). See our annual review on the topic, which also covers engine technologies and heavy-duty as well. We provided an update at the SAE World Congress this past April.
The EPA is right after all, the future is difficult to predict and extrapolating the efficiency gains ad infinitum may be impractical. The low hanging fruits are taken and the incremental costs of improving efficiencies are increasing. But the auto industry has shown that it is super innovative and will continue to meet the standards and deliver to customer and societal demands. No matter where you stand with regard to fuel efficiency standards, electrification and the debate with national vs. California standards, it is clear that once standards are set, the industry gets working to meet them.
Ameya Joshi is Director of Emerging Technologies and Regulations at Corning Incorporated.