Market News

 May 07, 2013
We Were Promised Flying Cars, Instead Fuel-Efficient Cars Are Flying Off The Lots

 Flying cars may be a few more decades off --- or relegated to a permanent niche by their inherent inefficiency --- but how are we doing on a post-gasoline future?

When President Obama announced Charlotte Mayor (and streetcar fan) Anthony Foxx as his pick to be the next Transportation Secretary this week, current Secretary Ray LaHood said that the improved fuel economy standards he helped achieve were a "big deal."

These Corporate Average Fuel Economy standards have been improved such that the cars sold in American will get an average of 54.5 miles per gallon by 2025. That is much stronger than the 35 mpg by 2020 goal set in the energy law signed by President Bush in 2007.

How is that working out? Last month, the average fuel economy reached a record high:

According to the University of Michigan's Transportation Research Institute, the average fuel-economy value of vehicles sold nationally during March reached a record high of 24.6 mpg --- a 0.2 mpg increase from the revised value for February 2013.

This brings the efficiency value up 4.5 mpg from October 2007, the starting point for the institute's monitoring, the institute's director and project manager noted in a joint statement. In October 2012, the institute recorded the value at 24.1 mpg.

In model year 2012, car makers made record improvements and beat the first year targets. The year's fleet-wide CO2 emissions dropped to 296 grams per mile, a 13 percent improvement from 2007. It is not only the growth in hybrid and electric vehicles that is driving this trend: SUVs are getting more efficient, direct-injection systems have grown from zero to 24 percent of all models, turbochargers and variable-speed transmissions are more prevalent, and vehicles are becoming lighter. A quarter of model year 2012 vehicles already meet the 2016 standards.

It might seem like these changes are moving too fast for the public, but the reality is that huge majorities support the new standards (92 percent of Democrats, 87 for Independents, and 77 for Republicans).

As the gasoline-based fleet starts to use less gasoline, electric cars continue to make a stronger and stronger case for their incorporation into the fleet --- and the grid.

In 1991, Amory Lovins invented the concept of "vehicle-to-grid" systems, where parked-and-charging electric cars would use their batteries as massive banks of distributed energy sources and stores for the grid. An owner of an electric car usually only drives it for a few hours a day. When it is not being driven, charging away at work or home, it does not need every hour to charge. So vehicle owners could choose to use the time to both charge and supply the grid with energy during peak hours and second-by-second variations in demand, known as "frequency regulation. "

Utilities see this as an asset, and will pay for the privilege of using an electric car's battery like this. New technology from researchers at the University of Delaware allows American electric cars to both charge and discharge --- right now, most do not have the technology for this. The cost would be $400 per car, but because the electric company would pay about $5 per day (almost $1800 per year) for the privilege of connecting to an electric vehicle, owners would earn back that cost in less than 3 months. Stronger chargers still in development would allow a fleet of cars move beyond frequency regulation into operating as "spinning reserve" --- which means replacing a natural gas-fired turbine spinning and waiting to pick up utility load within seconds. The military is even trying out vehicle-to-grid in a pilot project on domestic bases.

Electric cars are powered by the current grid, which is generally composed of well over three-quarters fossil fuel-based energy. However, as renewables become a larger part of the electricity charging our vehicles, the gasoline-free fleet would become an actual carbon-free. As it releases its new i green car brands, BMW is beginning to offer a discount on installation of a rooftop garage solar microgeneration system.

More prosaically, states are still grappling with the fact that a growing share of the cars on their roads are using either less or no gasoline. Virginia's new transportation law cuts the gas tax but levies a fine on electric cars. A California bill looks to cut the sales tax on plug-ins. There are few laws on the books protecting car charging parking spots for electric cars. "Range anxiety," which means concern over having enough charge to continue driving, is one of the barriers electric cars face to wide adoption. As the infrastructure gets installed nationwide to support electric cars, it does little good if a gasoline-powered car is blocking the spot, like a stagecoach parked in a gas station.