Costs and benefits of automotive fuel economy improvement: A partial analysis

Greene, Daniel L.; Duleep, K G

doi:10.2172/5203062

Cited by 5 publications

(6 citation statements)

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“…For a discussion of the cost of these potential technologies and their impact on fuel economy see, for example,Greene and Duleep (1993),DeCicco and Ross (1996) andDeCicco, An, and Ross (2001).…”

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confidence: 99%

Automobiles on Steroids: Product Attribute Trade-Offs and Technological Progress in the Automobile Sector

Knittel

2011

American Economic Review

215

130

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This paper estimates the technological progress that has occurred since 1980 in the automobile industry and the trade-offs faced when choosing between fuel economy, weight, and engine power characteristics. The results suggest that if weight, horsepower, and torque were held at their 1980 levels, fuel economy could have increased by nearly 60 percent from 1980 to 2006. Once technological progress is considered, meeting the CAFE standards adopted in 2007 will require halting the trend in weight and engine power characteristics, but little more. In contrast, the standards recently announced by the new administration, while attainable, require nontrivial "downsizing." (JEL: L50, L60)

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confidence: 99%

Automobiles on Steroids: Product Attribute Trade-Offs and Technological Progress in the Automobile Sector

Knittel

2011

American Economic Review

215

130

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“…scrappage payments, a fee imposed on the purchase of a dirty vehicle and a rebate applied to the purchase of a clean vehicle) may reduce regulated emissions (i.e. criteria pollutants including CO, NO x , and non-methane hydrocarbons (NMHC)) and improve fuel economy (Greene and Duleep, 1993;BenDor and Ford, 2005), but may increase greenhouse gases from a vehicle life-cycle perspective (i.e. from the production of the vehicle to the operations of the vehicle and eventually the dismantling of the vehicle).…”

Section: Discussionmentioning

confidence: 99%

Making an Informed Vehicle Scrappage Decision

Chen

Lin

2006

Transport Reviews

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According to the US Federal Highway Administration (FHWA), the number of publicly owned vehicles in the USA reached 3 913 999 in 2003. In order to maintain a stable vehicle fleet, government agencies must repeatedly make vehicle scrappage decisions because older vehicles must first retire to make room for newer vehicles. Typically, these decisions are made based on a deterministic ranking evaluation model to select candidate vehicles for replacement. The paper applied an objective and probabilistic method to a vehicle dataset collected by the DuPage County Forest Preserve District ((DCFPD), in the state of Illinois). A Weibull-form survival model with time-varying covariate and unobserved heterogeneity was estimated on the dataset. The results suggest that in addition to the fact that vehicle age is negatively related to the vehicle's survival probability, there are other variables that also appear influential. The survival probabilities of alternative fuel vehicles are similar to those of reformulated unleaded gasoline vehicles. The results suggest that a probabilistic and objective model can benefit government agencies in their vehicle scrappage decisions.

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“…Increases at 7% per year Note: For initial fuel prices of fuel, please see Table 4 or source [43]. Note: For fuel price rates of change, annual rates of increase (or decrease) are inferred based upon EIA long-term oil price forecast in 7 years: high case ($165/bbl), reference case ($110/bbl), low case ($75/bbl) [49,50]. Note: For simplicity and to clarify the independent impacts of the sensitivity variables, only one parameter is set to its low (or high) limit at a time, while the other two are held at their baseline values.…”

Section: Sensitivity Analysismentioning

confidence: 99%

A benefit-cost assessment of new vehicle technologies and fuel economy in the U.S. market

et al. 2015

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Increasingly stringent fuel economy and emissions regulations alongside efforts to reduce oil dependence have accelerated the global deployment of advanced vehicle technologies. In recent years, original equipment manufacturers (OEMs) and consumers have generally been successful in mutually deploying cleaner vehicle options with little sacrifice in cost, performance or overall utility. Projections regarding the challenges and impacts associated with compliance with mid-and long-term targets in the U.S., however, incur much greater uncertainty. The share of existing new vehicles that is expected to comply with future regulations, for example, falls below 10% by 2020. This article explores advanced technologies that result in reduced fuel consumption and emissions that are commercially available in 2014 Model Year compact and midsize passenger cars. A review of the recent research literature and publicly available cost and technical specification data addressing correlations between incremental cost and fuel economy is presented. This analysis reveals that a 10% improvement in the sales-weighted average fuel economy of passenger cars has been achieved between 2011 and 2014 at costs that are at or below levels anticipated by the regulations by means of reductions in weight, friction, and drag; advancements in internal combustion efficiency; turbocharging combined with engine downsizing; transmission upgrades; and the growth of hybrids. Benefit-cost analyses performed on best-selling models in the selected classifications reveal that consumers thus far are not substantially incentivized to purchase fuel economy. Under baseline conditions, benefit-cost ratios are above a breakeven value of unity for only 6 of 28 models employing improved fuel-economy technologies. Sales-weighted data indicate that the "average" consumer that elected to invest in greater fuel economy spent $1490 to realize a 17.3% improvement in fuel economy, equating to estimated savings of $1070. Thus savings were, on average, insufficient to cover technology costs in the baseline scenario. However, a sensitivity analysis reveals that a majority of new technologies become financially attractive to consumers when average fuel prices exceed $5.60/gallon, or when annual miles travelled exceed 16,400. The article concludes with techno-economic implications of the research on future fuel economy regulations for stakeholders. In general, the additional cost consumers incur in exchange for a given level of fuel economy improvement in the coming years will need to be steadily reduced compared to current levels to ensure that the expected benefits of fuel savings are financially warranted.

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Costs and benefits of automotive fuel economy improvement: A partial analysis

Cited by 5 publications

References 1 publication

Automobiles on Steroids: Product Attribute Trade-Offs and Technological Progress in the Automobile Sector

Automobiles on Steroids: Product Attribute Trade-Offs and Technological Progress in the Automobile Sector

Making an Informed Vehicle Scrappage Decision

A benefit-cost assessment of new vehicle technologies and fuel economy in the U.S. market

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