The Dawn of a New Day for Autos

A lot has changed in the two years since I made my first visit to the Washington Auto Show. Back then, gas prices averaged $2.68 per gallon and the Nissan LEAF looked like a “car of the future” compared to the other vehicles on the showroom floor. Now, prices at the pump are 25 percent higher, averaging $3.50 per gallon in 2011, and fuel costs are eating up the largest share of the average American’s income in over 30 years. Meanwhile, the auto industry is adapting their product line to their new environment and cooperating more closely with regulators. The 2012 auto show includes many more alternative vehicles like the all-electric Ford Focus and the Prius V, a 42 mile per gallon hybrid station wagon.

Many automakers hope to make this claim soon about one of their alternative technology vehicles.

The U.S. auto industry has made a dramatic turnaround in the last 4 years. Back in 2008, some pondered whether we’d be able to even have an auto industry in the United States. The U.S. government, including Congress and the Bush and Obama Administrations, bet on American workers and they did not disappoint. The Big Three thrived in 2011 with billions in profits and sales of over 6 million vehicles.

It’s not all roses, however. The Chevy Volt and other plug-in electric vehicles have recently taken an undeserved beating in the media. The contrarians took advantage of “lower than expected” sales in 2011 in an attempt to bury the electric car, again. But the facts tell a different story. The National Highway Traffic Safety Administration recently declared electric vehicles are among the safest cars on the road and sales are 50 percent higher than hybrid sales were when they first entered the U.S. market in 2000. Compared to many cars available now, electric vehicles offer significant fuel savings, a smaller environmental footprint, and even a more fun and responsive driving experience.

Hopefully, consumers will look at a car’s total value proposition—including stubbornly high gasoline costs—when making their next purchase. Looking at travel data from 2011, consumers may be responding to higher fuel prices by driving less. Although lowering vehicle miles traveled is one of the key strategies for saving oil and reducing greenhouse gas emissions, our research shows increased fuel economy can have an even greater impact, especially in the near term. Increased efficiencies can come from improvements to conventional technology and other options, like electric drivetrains.

The Washington Auto Show of 2010 showed the auto industry on the cusp of a new era – one in which gas guzzlers are going out of style. At the 2012 auto show, an environment of high gas prices, increased vehicles standards, and a shift in consumer preferences has quickly accelerated this change in the auto landscape.The model year 2012-2016 federal vehicle standards and the proposed 2017-2025 standards will bring to the mass market many technologies automakers currently limit to niche vehicles. In 2012, each of more than 10 cars on the road achieve a combined city and highway fuel economy of 40 miles per gallon. In 2009, only two such vehicles existed – the Toyota Prius and the Honda Civic Hybrid. Clearly, much has changed in a short time.

Nick Nigro is Manager of Transportation Initiatives at C2ES.