Will cheap gas, soaring SUV sales sink fuel economy goals?

It's possible consumers are no longer as interested in increased fuel economy as they once were.

Mark Lennihan/AP/File
Low gas prices displayed at a station in Newark, Del.

US emissions regulations are forcing carmakers to make their products more efficient over the next decade.

Corporate Average Fuel Economy (CAFE) standards require carmakers to achieve a fleet average of 54.5 mpg by 2025.

That's equivalent to roughly 40 mpg on the window sticker.

But while manufacturers seek efficiency gains, it's possible consumers are no longer as interested in increased fuel economy as they once were.

Low gas prices are rekindling consumer interest in SUVs and other less-efficient vehicles, which could weaken carmakers' resolve to push the most efficient cars, says the Financial Times (subscription required).

Gas prices have stayed down for about the past 18 months, removing some of the financial incentive for car buyers to choose fuel-efficient models.

SUV sales have increased in that same period, as consumers take advantage of cheap fuel.

The average fuel economy of new vehicles sold in the U.S. was 25 mpg, according to the University of Michigan Transportation Research Institute (UMTRI), which monitors new-car fuel economy.

That's down 3 percent from a peak of 25.8 mpg recorded in August 2014.

Shifts in new-car average fuel economy related to gas prices have led some analysts to question whether CAFE alone will produce the real-world emissions reductions needed.

The U.S. doesn't tax transportation fuel as heavily as other countries. That makes retail prices somewhat more volatile, as they are tied to underlying commodity prices.

One option could be pricing fuel to more accurately reflect the impact of carbon emissions, said Charles Komanoff, director of the Carbon Tax Center, a non-governmental organization.

Right now, gas taxes don't even cover the costs of maintaining roads cars drive on.

A spike in SUV sales also doesn't automatically mean carmakers will abandon their long-term efficiency goals.

BMW still expects a global trend toward dense urbanization to place emphasis on more-efficient cars--and to possibly remove many cars from the roads.

MORE: Electric-Car Drivers Don't Pay Their Share? Actually, No One Does

"Personal mobility" could shift towards heavier use of car sharing and public transportation, said Jose Guerrero, North American product manager for BMW i.

Toyota hopes to cut carbon emissions from its vehicles 90 percent by 2050.

Meanwhile, no matter what types of vehicles people are buying, CAFE standards ensure that they will get increasingly efficient.

Whether it's an SUV or a subcompact hatchback, new versions of cars are at least somewhat more efficient than the ones they replace--so some efficiency gains are still being realized.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.