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EIA: fuel economy improvements bring diminishing returns in fuel savings

15 July 2014

Improving fuel economy exhibits diminishing returns in fuel savings, according to a brief analysis by the US Energy Information Administration (EIA). For example, switching from a 10-mile-per-gallon (mpg) vehicle to a 15-mpg vehicle saves more fuel and results in greater fuel cost savings than switching from a 25-mpg vehicle to a 75-mpg vehicle. Similarly, the fuel and cost savings of improving fuel economy from 12 mpg to 15 mpg are the same as increasing from 30 mpg to 60 mpg.

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Much of the reduction in fuel consumption and fuel cost comes from incremental fuel economy improvement at the relatively low fuel economy levels. For a consumer who drives 12,000 miles per year and pays $3.50 per gallon for gasoline, increasing fuel economy from 10 mpg to 11 mpg saves $382 in annual fuel cost and from 30 mpg from 31 mpg saves $45; raising fuel economy from 40 to 41 mpg saves just $26 and from 60 to 61 saves $11.

Vehicles that use fuels other than gasoline, such as diesel or electricity, will have different fuel savings and fuel cost. Diesel vehicles often have higher fuel economy than standard gasoline vehicles, but they also must use diesel fuel, which is more expensive than gasoline. Plug-in electric vehicles, which achieve high fuel efficiency and take advantage of relatively inexpensive electricity (compared to gasoline), can accrue significant fuel cost savings, albeit at higher incremental vehicle cost, the EIA analysis noted.

As light-duty vehicle fuel economy continues to increase because of more stringent future greenhouse gas emission and Corporate Average Fuel Economy (CAFE) standards through model year 2025, standard gasoline vehicles are expected to achieve compliance fuel economy levels of around 50 mpg for passenger cars and around 40 mpg for light-duty trucks.

Diminishing returns to improved fuel economy make standard gasoline vehicles a highly fuel-efficient competitor relative to other vehicle fuel types such as diesels, hybrids, and plug-in vehicles, especially given the relatively higher vehicle prices projected for these other vehicle types.

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So what? The point is always to use less gasoline. They are trying to say that getting really good gasoline mileage is not worth it to the individual with regards to their money. There are numerous other reasons to use less gasoline that this selfish individualistic view does not incorporate. I'd like to have cleaner air to breath. I'd like to have fewer excuses for the wars we have. I'd like us to go down a path that includes less dependence on foriegn resources. I'd like to kill the industries that make our politicians corrupt.

On a side note, the cost of implementing the alternate technologies for fuel efficiency will always get less expensive as they are more widely adopted. Some are already cost effective for certain commuters or other users. The down side is that you pay more up front but save overall. It's a hard thing for the TV nation to fathom. The repeated brainwash from the media clouds the weaker minds and they give in to their masters, as good sheeple do. They are not trouble makers like those that think for themselves.

Amen Brother.

The curve you are showing, although accurate, is misleading as it expresses distance per unit of fuel. Using the same data but expressed as fuel needed to travel a given distance, one would get a very different graph, one that shows that every bit of gain in efficiency contributes to reduce consumption. But the final goal should be to consume zero petroleum based fuel - as the real cost of using these fuels far exceed their price at the pump.

In general, increase in MPG will result in significant saving in fuel cost that will more than compensate for the higher purchase price.
A Ford Fusion with 28 mpg will cost $0.125/mi with gasoline at $3.5/gal. A Fusion hybrid at 47 mpg will cost $0.0744/mi, for a saving of $0.0505/ mi. Over 200,000 mi life span of the car, the saving will be $10,100 just on fuel alone. Adding a few thousands of savings on repairs due to the lack of transmission, brakes usage, accessory belts, lack of alternator and starter and belt-driven water pump and AC compressor in the hybrid version, which may add up to be comparable to the cost premium of the hybrid version, then the $10,000 saving in fuel cost may well be the net saving for owning a fuel-saving hybrid version!

The real point is that if you trade in a car for a more efficient model, it is more cost effective to drive the old gas guzzler into the ground and hold out for the latest efficient model, than to trade in for 10% efficiency increments. Too much engineering, marketing, and production is spent for too few MPG gains. The costs of new designs and retooling must be astounding. Imagine how not sticking with tried and true key ignition switches and foot pedals has cost Detroit in liabilities alone!

And Roger, I really wonder what the big deal is with that Ford Fusion, after depreciation (including suboptimal performance due to aging and dirty parts), maintenance and warranty costs (including manufacturer's defects), repairs due to accidents (which increase in proportion to speed and the inverse presence of traffic signals and intersections), vandalism, administrative costs (inspection and moving violations) --you feel confident that you'll get 200,000 miles?

@Roger: 200,000 miles? Very few owners are willing to keep a car for 200,000 miles. And with a hybrid, whose battery is going to be significantly degraded by the end of that time? Not likely. A typical car buyer is not going to analyze the tradeoffs between a more-expensive hybrid and a less-expensive, more traditional ride assuming such high mileage. For most people 200,000 miles means owning the same car for 15-20 years. Even a cheapskate like me wants a newer car after 12-15 years.

All the Money earned and saved in this life will not buy one a place in Heaven, nor a decent placement in the next life! Only good deeds can reserve a place in Heaven, not money. Good deeds such as helping humanity and preserving the environment are the minimum required for spiritual salvation. This life is very short, but is a preparation for what to come after. Those with the means to do good deeds for humanity should do so instead of piling up the money yet cannot even bring a single penny in this life into the next!

Many places in the world are already so hot that is causing brain damage and stifling economic and intellectual development, as well as rampant violence and social unrest due to the unbearable heat! Just a few degrees hotter and life will be over for billions of people in the third world! Yet when they tried to fled the heat and misery by boat to a largely unpopulated place in the first world like Australia, and they are treated worst than the lowest of animals such that many refugees took their own life in the refugee camp in Australia.

The first world are releasing GHG unsustainably to support their opulent and immoral life style while turning up the heat in the third world into a hell on earth that these people cannot escape! When comes the time to buy a car, there much more important issues at stakes than just trying to save a few bucks, or getting an opulent ride to nowhere good nor decent!

@RP:

Tks for pointing out more reasons to burn less liquid fuels.

Camry and Ford Hybrids are available in Canada at no extra cost over equivalent non-Hybrid models.

I averaged 6L/100Km (year round) with my 2013 Camry XLE Hybrid instead of 10L/100Km with my old ICE Camry. That represents a saving of about 720L/year or 260 US gal/year. At $5.25/US gal it represents about $1,370/year.

Since gasoline price is going up every year, the fuel savings will soon reach $1,500+/year.

The new Camry Hybrid requires very little maintenance. Two 'synthetic' oil change a year so far.

Too bad the Camry Hybrid is not equipped with a larger (2X) quick charge lithium battery and a lighter body. It could be 10% to 20% more efficient. Otherwise, it is a fine car.

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