ŁEPA
  United States
  Environmental Protection
  Agency
Office of Transportation                  EPA420-S-05-001
and Air Quality                    July 2005
           Light-Duty Automotive
           Technology and Fuel Economy
           Trends: 1975 through 2005

           Executive Summary

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                                                       EPA420-S-05-001
                                                              July 2005
        Light-Duty Automotive Technology and
       Fuel Economy Trends: 1975 Through 2005

                      Executive Summary
                         Robert M. Heavenrich

                      Advanced Technology Division
                   Office of Transportation and Air Quality
                   U. S. Environmental Protection Agency
                              NOTICE
  This Technical Report does not necessarily represent final EPA decisions or positions.
It is intended to present technical analysis of issues using data that are currently available.
       The purpose in the release of such reports is to facilitate an exchange of
       technical information and to inform the public of technical developments.

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                                  Executive Summary

Introduction

This report summarizes key fuel economy and technology usage trends related to model year
1975 through 2005 light-duty vehicles sold in the United States. Light-duty vehicles are  those
vehicles that EPA classifies as cars or light-duty trucks (sport utility vehicles, vans, and pickup
trucks with less than 8,500 pounds gross vehicle weight ratings).

Since 1975, the fuel economy of the combined car and light truck fleet has moved through four
phases:

       1.  a rapid increase from 1975 continuing to the mid-1980s

       2.  a slow increase extending into the late 1980s

       3.  a gradual decline until the mid-1990s

       4.  a period of relatively constant fuel economy since then

Model year 2005 light-duty vehicles are estimated to average 21.0 miles per gallon (mpg). The
MY2005 average is the highest since 1996 and at the midpoint of the 20.6 to 21.4 mpg range that
has occurred for the past dozen years, and five percent below the 1987-88 peak of 22.1 mpg.

The fuel economy values in this report are based on 'real world' estimates provided by the
Federal government to consumers and are about 15 percent lower than the fuel economy values
used by manufacturers and the Department of Transportation (DOT) for compliance with the
Corporate Average Fuel Economy (CAFE) program. Since MY 1990, the CAFE standards for
cars has been the value  set by Congress, i.e.,  27.5 mpg. In 1996, DOT, as authorized by
Congress, set a standard of 20.7 for light trucks and this standard remained the same until March
31, 2003, when DOT issued new light truck fuel economy standards increasing the standard from
20.7 to 21.0 mpg for MY2005, to 21.6 mpg for MY2006, and to 22.2 mpg for MY2007.

For model year 2005, light trucks are projected to account for 50 percent of all light-duty
vehicles. After over two decades of steady growth, the market share for light trucks has been
about half of the  overall light-duty vehicle market since 2002. Most of this growth in the light
truck market has  been led by the increase in the popularity of sport utility vehicles (SUVs), which
now account for more than one-fourth of all new light-duty vehicles.

Model year 2005 light-duty vehicles are estimated to be heavier, faster and more powerful than in
2004. This continues a twenty-plus year trend of increasing weight and power, and faster
acceleration.

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Importance of Fuel Economy

Fuel economy continues to be a major area of public and policy interest for several reasons,
including:

       1. DFuel economy is directly related to energy security because light-duty vehicles
          account for approximately 40 percent of all U.S. oil consumption, and much of this
          oil is imported.

       2. DFuel economy is directly related to the cost of fueling a vehicle and is of great interest
          when crude oil and gasoline prices rise.

       3. DFuel economy is directly related to emissions of greenhouse gases such as carbon
          dioxide. Light-duty vehicles contribute about 20 percent of all U.S. carbon dioxide
          emissions.
                         Characteristics of Light-Duty Vehicles
                                for Three Model Years
       Adjusted Fuel Economy (mpg)

       Weight (pounds)
       Horsepower
       O-to-60 Time (seconds)

       Percent Truck Sales
1975

13.1

4060
 137
14.1

19%
1987

22.1

3220
 118
13.1

28%
2005

21.0

4089
 212
 9.9

50%
                                          11

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Highlight #1: Fuel Economy Has Been Relatively Constant For Many Years.
   After a decline from 22.1 mpg in 1988 to 21.0 mpg in 1994, fuel economy has been
   relatively constant for a decade. The average fuel economy for all model year 2005 light-
   duty vehicles is estimated to be 21.0 mpg, the same value as achieved in 1994 and the
   highest since 1996, but five percent lower than the peak value achieved in 1987-88.
   Average model year 2005 fuel economy is 24.7 mpg for cars and 18.2 mpg for light
   trucks.
Since 1975, the fuel economy of the combined car and light truck fleet has moved through
several phases: (1) a rapid increase from 1975 to the mid-1980s, (2) a slow increase extending
into the late 1980s, (3) a decline from the peak in the late 1980s until the mid-1990s, and (4)
since then a period of relatively constant overall fleet fuel economy. Viewing new cars and trucks
separately, since 1996, the three-year moving average fuel economy for cars has ranged from
24.2 to 24.7 mpg, while that for trucks has ranged from 17.6 to 18.0 mpg, and that for all light-
duty vehicles from 20.7 to 21.1 mpg.
                        Adjusted Fuel Economy by Model Year
                              (Three-Year Moving Average)
                          MPG
                       30
                       25
                       20
                       15
                       10
                                  Cars
                              Trucks
                        1975   1980   1985   1990   1995   2000  2005
                                       Model Year
                                          ill

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Highlight #2: Trucks Represent About Half of New Vehicle Sales.
   Sales of light trucks, which include sport utility vehicles (SUVs), vans, and pickup trucks,
   are now projected to make up about 50 percent of the U.S. light-duty vehicle market —
   nearly twice their market share in 1985.
Growth in the light truck market has been led recently by the increase in the market share of
SUVs. The SUV market share increased by more than a factor often, from less than two percent
of the overall new light-duty vehicle market in 1975 to over 25 percent of the market since 2002.
Over the same period, the market share for vans increased by about five percent, while that for
pickups remained relatively constant. Between 1975 and 2005, market share for new passenger
cars and station wagons decreased by over 30 percent. For model year 2005, cars are estimated to
average 24.7 mpg, vans 20.4 mpg, SUVs 18.1 mpg, and pickups 17.1 mpg. The increased market
share of light trucks, which in recent years have averaged more than six mpg less than cars,
accounted for much of the decline in fuel economy of the overall new light-duty vehicle fleet
from the peak that occurred in 1987-88.
                            Sales Fraction by Vehicle Type
                                (Three-Year Moving Average)
                       100%
                        80%
                        60%
                            Market Share
                        40%
                        20%
                           1976 1980 1984 1988  1992  1996  2000  2004
                                         Model Year
                                           IV

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Highlight #3: As a Result of Technological Innovation, Vehicle Weight Has Increased and
Performance Has Improved, While Fuel Economy Has Remained Constant.
   Automotive manufacturers continue to apply technological innovations to the new light-
   duty vehicle fleet to increase light-duty vehicle weight and acceleration performance.
   EPA estimates that had the new 2005 light-duty vehicle fleet had the same distribution of
   performance and the same distribution of weight as in 1987, it could have achieved about
   24 percent higher fuel economy.
Improved engine, transmission and powertrain technologies continue to penetrate the new light-
duty vehicle fleet. The trend has clearly been to apply these innovative technologies to
accommodate increases in average new vehicle weight, power, and performance while
maintaining a constant level of fuel economy. This is reflected by heavier average vehicle weight,
rising average horsepower, and faster average 0 to 60 mile-per-hour acceleration time.
                                Weight and Performance
                                (Three Year Moving Average)
                             Weight (Ibs.)          0 to 60 Time (sec.)
                        4500 T	r 15
                        4000
                                                              -14
                        3500
                        3000
                           1975  1980  1985   1990  1995   2000  2005
                                         Model Year

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Important Notes With Respect to the Data Used in This Report

Unless otherwise indicated, the fuel economy values in this report are based on laboratory data
and have been adjusted downward by about 15 percent, so that this data is equivalent to the real
world estimates provided to consumers on new vehicle labels, in the EPA/DOE Fuel Economy
Guide, and in EPA's Green Vehicle Guide. These adjusted fuel economy values are significantly
lower than those used for compliance with CAFE standards as, in addition to the 15 percent
downward adjustment for real world driving, they also exclude credits for alternative fuel
capability and test procedure changes that are included in the CAFE data reported by the DOT.

The data presented in this report were tabulated on a model year basis, but several of the figures
in this report use three-year moving averages which effectively smooth the trends, and these
three-year moving averages are tabulated at their midpoint. For example, the midpoint for model
years 2002, 2003, and 2004 is model year 2003. All average fuel economy values were calculated
using  harmonic, rather than arithmetic, averaging.

The source database used to generate the tables and graphs in this report for all years was frozen
in November  2004. When comparing data in this report with those in previous reports in this
series, please  note that revisions are made in the data for some recent model years for which
more complete and accurate sales and fuel economy data have become available.

Through model year 2003, the fuel economy, vehicle characteristics, and sales data used for this
report were obtained from the most complete databases used for CAFE and "gas  guzzler" tax on
cars compliance purposes. For model year 2004, EPA used data that included confidential sales
projections submitted to the Agency by the automotive manufacturers, but updated the sales data
to take into account information reported in trade publications. For model year 2005, EPA has
exclusively used confidential projected sales data that the auto companies are required to submit
to the Agency.

Over the last five years, the final fuel economy values have varied from 0.1 mpg  lower to 0.3
mpg higher compared to the original estimates based exclusively on projected sales.
                                           VI

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For More Information

Light-Duty Automotive Technology and Fuel Economy Trends: 1975 through 2005
(EPA420-R-05-001) is available on the Office of Transportation and Air Quality's (OTAQ) Web
site at:

       www. epa. gov/otaq/fetrends.htm
Printed copies are available from the OTAQ library at:

      U.S. Environmental Protection Agency D
      Office of Transportation and Air Quality Library D
      2000 Traverwood Drive D
      Ann Arbor, MI 48105 D
      (734) 214-431 ID
A copy of the Fuel Economy Guide giving city and highway fuel economy data for individual
models is available at:

      www. fueleconomy. gov

or by calling the U.S. Department of Energy at (800) 423-1363.
EPA's Green Vehicle Guide providing information about the air pollution emissions and fuel
economy performance of individual models is available on EPA's Web site at:

       www. epa. gov/greenvehicles

For information about the Department of Transportation (DOT) Corporate Average Fuel
Economy (CAFE) program, including a program overview, related rulemaking activities,
research, and summaries of individual manufacturer's fuel economy performance since 1978,
see:

       www.nhtsa.dot.gov/cars/rules/cafe/index.htm
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