2013 Could Be a Record Breaker for Fuel Efficiency and Electric Vehicles

Looking forward to 2013, I see good news for new car buyers. Showrooms will have an unprecedented number of fuel-efficient models of both the gasoline and electric varieties. Plug-in electric vehicles are set to reach new records for sales and fleet average fuel economy will be at all-time high levels.

Also in 2013, I expect the U.S. auto industry to continue to invest in fuel-saving technologies and create jobs.

Continuing the Trend from 2012

Before looking forward, though, it’s helpful to take stock of our recent past. I recently wrote that model year 2012 was the greenest new automobile fleet ever. 2012 was the Year of the Green Car.

Automobiles from model year 2012 (which ended in September 2012) hit a new record high fuel economy level, approximately 1 mpg higher than 2011. Compared to the previous model year, hybrid sales grew by 55 percent and plug-in electric vehicles sales jumped 228 percent.

Government action played a role. State and federal governments continued to support the up-take of plug-in electric vehicles with purchase incentives such as tax breaks. Last August, the Obama Administration finalized strong fuel-efficiency standards that will reach the equivalent of 54.5 mpg by 2025. These standards, which build upon standards covering model years 2012 to 2016, provide the auto industry with the certainty it needs to invest in fuel-saving technologies.

As the standards continue their gradual ramp-up to higher fuel economy, we can be assured that the future will be bright for auto consumers. 2012 was just the first year of green car; 2013 will be the second.

New in 2013

Under the fuel efficiency standards, fleet average fuel economy is expected to reach a new record level by climbing about 0.8 mpg from model year 2012[1] to model year 2013, the predominate cohort sold in calendar year 2013.

Automakers are expected to hit the 2013 target because of the strong consumer demand for efficiency, long-term high gasoline prices[2] and a growing abundance of fuel-efficient vehicles across segments.

In particular, 2013 will feature the first full-year sales of popular vehicles recently upgraded in terms of fuel efficiency, including the Ford Fusion, Honda Accord, Nissan Altima and Chevy Malibu. High-volume pickup trucks from Ford and Ram have also recently upgraded their fuel economy and the companies will be competing for efficiency-minded consumers. GM plans to claim some efficiency high-ground when it releases its re-vamped model year 2014 trucks in 2013.

The progress in efficiency over the last three years has been remarkable. From model year 2009 to model year 2013, the number of fuel-efficient compacts, midsize cars and crossover vehicles more than doubled from 28 to 61. 

Among more advanced technologies, automakers are also expected to increase the number of hybrid, plug-in hybrid and battery electric vehicles available in 2013. According to auto analysts at Baum and Associates, showrooms in 2013 will have at least 6 more hybrid models and 8 more plug-in vehicle offerings than last year. Compared to 2009, 2013 will have more than twice as many hybrid models (going from 24 to 50) and a huge jump in plug-in electric models (going 1 to 28, including both plug-in hybrids and pure battery electrics). Baum and Associates project that hybrid sales over the next year will improve by at least 25 percent and plug-in electric vehicle sales will double 2012 levels.

More MPG = More Jobs

The quest for higher miles per gallon requires new technologies and more workers to develop and build those technologies. In 2012, auto industry suppliers and vehicle manufacturers announced a series of new fuel-efficiency investments and the resulting jobs. As fuel efficiency standards continue to ramp-up and drive investment, we can expect 2013 to include more job growth announcements. Below are a few recent announcements that will deliver better fuel efficiency and jobs:

Fuel efficiency also drives job creation outside the auto industry. Owners of more fuel efficient vehicles save money at the pump. When those savings are spent in the broader economy, more jobs can be created.

Overall, 2013 is expected to be another banner year of record-setting fuel efficiency. Choices continue to grow for drivers of cars and trucks who are striving to meet their transportation needs using less fuel. That’s good news for consumers, for our nation’s energy security and for the environment. And worthy of a cheer in the New Year!

[1] Researchers at the University of Michigan recently estimated a model year 2012 window sticker average of 23.6 mpg (compliance test value of 28.9 mpg). The official numbers from U.S. EPA will be released in early 2013.

[2] The Energy Information Administration’s Annual Energy Outlook 2013 projects prices gradually rising to $4.32 per gallon by 2040.

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