Recent advances in automotive technology and the cost-effectiveness of fuel economy improvement

The potential for improving the fuel economy of conventional, gasoline-powered automobiles through optimized application of recent technology advances is analyzed. Results are presented at three levels of technical certainty, ranging from technologies already in use to technologies facing technical constraints (such as emissions control problems) which might inhibit widespread use. A fleet-aggregate, engineering-economic analysis is used to estimate a range of US new car fleet average fuel economy levels achievable given roughly 10 years of lead time. Technology cost estimates are compared to fuel savings in order to determine likely cost-effective levels of fuel economy, which are found to range from 39 miles per gallon to 51 miles per gallon depending on technology certainty level. The corresponding estimated increases in average new car price range from $540 to $790 (1993$). Estimated fuel savings payback times average less than 3 years and the cost of conserved energy averages $0.50 per gallon, indicating that these levels of fuel economy improvement are cost-effective over a vehicle lifetime. A vehicle stock turnover model is used to project the reductions in gasoline consumption and associated emissions that would follow if the estimated fuel economy levels are achieved. Potential trade-offs regarding vehicle performance, safety, and emissions are also discussed.