Technical Options for Improving the Fuel Economy of U.S. Cars and Light Trucks by 2010-2015

June 2001

Technology progresses continually in the automotive industry. Engineering and design abilities have expanded greatly in recent years, stimulated by the computer, electronics, and materials revolutions; public policies; and the industry's recognition of the need for technological solutions to meet future market and societal challenges. At the same time, growing income and wealth create seemingly insatiable demands for customer-satisfying amenities that command designers' priorities and product planners' budgets. Just what is the automobile industry's capability to redesign cars and light trucks for higher fuel economy as a way to address concerns about global warming and petroleum dependence? Answering this question involves not only identifying technical options available to automotive engineers, but also addressing how such options can be applied to raise fuel economy as well as enhance other vehicle amenities.

Our study estimates the car and light truck design outcomes feasible over the next 10-15 years if the industry's capabilities were redirected toward improving average fuel economy. We also estimate the corresponding impacts on vehicle price. Technical measures considered range from efficiency-optimized applications of current and emerging technologies to initial deployments of "next-generation" technologies such as advanced materials substitution and hybrid drive. We evaluated these options using computer simulations to examine the improvements feasible for a set of representative models spanning the principal vehicle classes. In order to evaluate designs at varying degrees of ambition, we defined technology packages that represent moderate to advanced evolutions of conventional powertrains as well as hybrid drive.

This summary highlights results for a fleetwide fuel economy scenario based on our Moderate Package of conventional technology improvements plus a small share of hybrid electric vehicles (HEVs). Figure ES-1 illustrates this Moderate Package applied to the set of representative vehicles. Fuel economy improvements range from 37% for a full-size pickup truck to 70% for a midsize, standard-performance sport utility vehicle (SUV). The associated retail price impacts amount to 4-7% of today's vehicle prices. The full-size pickup shows the greatest relative challenge, given the need to maintain torque and power capabilities; nevertheless, the Moderate Package brings the pickup's fuel economy up to the level of today's midsize cars. We find that a midsize car can be improved by 56%, from 26 to 41 miles per gallon (mpg), at a 5% increase in price. Other technology packages provide greater efficiency improvements, as listed in Table ES-1. The first part of this table shows the representative vehicles we selected for analysis along with their baseline Model Year (MY) 2000 fuel economy and price. The relative cost/benefit pattern among vehicle types with other design packages is similar to that of the Moderate Package.

Figure ES-1. Fuel Economy and Price Increase Estimates for Moderate Technology Package of Design Improvements Achievable by 2010-2015

To extrapolate potential improvements for the overall new car and light truck fleet, we created scenarios that blend vehicles designed according to the different technology packages. Scenario A assumes a fleet of 98% Moderate Package vehicles with the remaining 2% being an average of mild and full hybrids (as defined below). This scenario implies potential for a 50% increase in average new light vehicle fuel economy, from the 2000 level of 24 to 36 mpg (EPA CAFE test values). The corresponding average new vehicle price increase is $1,300. Given the design changes included and the time needed to implement them across all model lines, this level of improvement is achievable fleetwide by 2010-2015. It would cut average vehicle carbon dioxide (CO2) emissions by 34%, from the current average of 228 grams/kilogram (g/km) down to 151 g/km. For comparison, the European automakers' voluntary commitment aims for a 25% reduction, from 186 g/km down to 140 g/km by 2008, although these values are based on European test cycles.

Greater improvements are possible using other technology packages. The Advanced Package pushes conventional technology toward its limits using engine technologies already known to be capable of meeting upcoming emissions standards if put into widespread use. The results for representative vehicle types with the Advanced Package are also shown in Table ES-1. The Advanced Package improvements average 70% across the fleet, at an average 8% price increase. Hybrid vehicles go further yet, offering upwards of doubled fuel economy but at a greater cost, averaging 20-30% higher than current vehicle prices. However, hybrids are happening for reasons beyond direct fuel savings, so we incorporate some hybrids into all of our fleetwide scenarios. Scenario C assumes a fleet of 98% Advanced Package conventional vehicles and 2% hybrids, yielding a 72% fuel economy improvement overall, from 24 to 41 mpg. Scenario B is intermediate between A and C; all scenarios are described below when we discuss fleetwide energy consumption and carbon emissions results.

Technology Packages

Engineering simulation analysis of the representative vehicles was done for four technology packages: moderate and advanced conventional technology sets and mild and full hybrid electric vehicles built on platforms already improved to the advanced conventional technology level.

Table ES-1. Summary of Fuel Economy and Price Estimates by Vehicle Type

In all cases, our technology packages as applied to different vehicle types were designed for enhancing fleetwide safety as well as fuel economy while holding size and performance largely constant. Mass reduction through improved design and substitution of lightweight materials is a fundamental efficiency improvement strategy. What is unique in our study is that we target the degree of mass reduction according to vehicle size, with today's heaviest vehicles loosing the most weight, rather than assuming across-the-board levels of mass reduction. Average vehicle size is fixed except for small cars, which we assume are wider (for better side-impact protection) and strengthened by focusing new materials and structural designs to enhance safety without adding weight. The result is a fleet that would be made safer overall by having improved the crash compatibility among vehicle types. Although formally modeling crash involvements is beyond the scope of this study, such a conclusion is supported by the literature on safety.

The Moderate Package entails the following measures:

• Mass reduction: zero net reduction for small cars; 10% for midsize cars; and 20% for minivans, pickups, and SUVs
• Aerodynamic streamlining, reduced tire rolling resistance, and accessory improvements
• High-efficiency, lightweight, low-friction, precision-controlled gasoline engine
• Integrated starter-generator (ISG) with 42 volt (V) system
• Improved transmissions depending on vehicle type

All of the technologies in this package are either already in use or slated for near-term production. The curb weight reductions range from 0-20% and average to a 14% reduction fleetwide. In addition to the mass reduction and high-efficiency engine, the ISG is a notable aspect of our redesign strategy. This device has multiple benefits, allowing the engine to be turned off during idling, smoothing torque to complement the high-efficiency engines and transmission, plus more and better vehicle accessories served by a 42 V electric subsystem (not all of its cost need be charged to fuel economy, although we do so here). Fuel economy improvement results vary with vehicle type, as illustrated earlier in Figure ES-1, and average 47% across the fleet.

The Advanced Package incorporates more ambitious refinements of conventional technologies. Some of these are already in early production and others, particularly the greater degrees of mass reduction, represent strategies now under intensive research and design (R&D), targeting production-readiness within a few years. This Advanced Package includes the following choices:

• Greater mass reduction: 10% for small cars, 20% for large cars, and 33% for light trucks; we also examine an advanced large sport wagon reflecting a 40% mass reduction for its size
• The same streamlining, tire, and accessory improvements as in the Moderate Package
• Gasoline direct-injection engine (GDI, stoichiometric) with 42 V ISG system
• Advanced transmissions, using efficiency-optimized shift schedules for all vehicles

This advanced technology set pushes the conventional gasoline, internal combustion vehicle toward its efficiency limit short of hybridization. Although results vary with vehicle type, it achieves an average added fuel economy benefit of 15% relative to the Moderate Package, for an average overall improvement of 70% compared to current technology.

In addition to the greater degree of mass reduction and optimized transmissions, use of gasoline direct-injection engines are a key feature of the Advanced Package. GDI engines are already being used in Europe and Japan, but these versions of the engine run with lean mixtures and cannot meet stringent U.S. tailpipe standards. The GDI engines we assume for our advanced case retain stoichiometric operation (air/fuel mixtures containing no more than the precise amount of oxygen needed for complete combustion of the fuel, enabling very thorough cleanup in a three-way catalytic converter). Their efficiency benefits are less than those of lean-burn GDI, but still significant, and GDI is also valuable for the superior powertrain controllability and optimization that become possible.

The Advanced Package entails an average 24% curb mass reduction, ranging from 10% for small cars to 33% for light trucks. In addition, this case examines an advanced sport wagon concept, using technologies that target a 40% mass reduction for a vehicle of a given size. Such options include aluminum-intensive design, or metal space frame designs using composite panels, along with computer-optimized structures and advanced materials use in interior components as well. This degree of mass reduction is facilitated by the advanced conventional powertrains we identify. Such engines and transmissions are very compact and lightweight for their capabilities, and create a "double synergy," or virtuous circle of sorts, simultaneously enabling and being enabled by mass-efficient structural design techniques.

An Advanced Alternative to the Sport Utility Vehicle

The rising popularity of SUVs has brought environmental problems (due to their higher emissions and lower fuel economy) and safety problems (due their aggressivity to other vehicles and propensity to roll over). We focused extra analytic attention on SUVs and also developed an alternative design conceptualized with high efficiency and improved safety in mind. Two findings are of note: High performance detracts from the fuel economy gains achievable at a given level of technology, and so the trend toward high-performing SUVs is eroding the potential to control fuel use and CO2 emissions. A large, advanced technology "sport wagon" built on a lightweight platform could counter these trends, more than doubling fuel economy while providing better safety and preserving or enhancing functionality.

Many SUVs have high performance levels, and so in addition to modeling a standard midsize SUV (based on a Ford Explorer XLT), we also modeled a high-performance SUV (based on a Ford Explorer "Eddie Bauer" edition). Both have an average test fuel economy of 20 mpg. The more refined SOHC engine already used to provide this higher performance leaves less room for improvement to the technology levels of our design packages (holding performance fixed in each case, as measured by 0-60 miles per hour [mph] acceleration time). Thus, our Moderate Package improves the high-performance SUV's fuel economy by only 52%, to 31 mpg, compared to a 70% improvement, to 35 mpg, for the standard SUV. Rethinking the design of a vehicle intended to have good carrying capacity, 4-wheel drive, and other attributes that make SUVs popular can lead to much greater opportunities for improvement. Such design trends have already started, evidenced on one hand by emerging "sport wagon" styles such as the Subaru Outback and Volvo Cross Country, and on the other by unit-body SUV designs that are now migrating from luxury segments (such as the Lexus LX470 and Mercedes ML430) into mainstream segments (as for the Pontiac Aztek and Toyota Highlander). If executed with lightweight materials, attention to safety and compatibility with smaller vehicles, and a high-efficiency conventional powertrain, the result would be a very fuel-efficient vehicle that provides copious interior space, excellent performance, and a body structure that would be more stable, more streamlined, and safer for both its own occupants and other road users. This is the approach we took in defining an advanced large sport wagon concept. With our Advanced Package, the standard SUV's fuel economy doubles, to 40 mpg, while the high-performance conventional SUV improves 78%, to 36 mpg. But the advanced sport wagon would achieve 44 mpg, a fuel economy that is better by a factor of 2.2 compared to a high-performance midsize SUV of today. We developed the concept by benchmarking it to a set of current SUVs, wagons, new sport wagons, and concept vehicles. We assumed a ground-up design on a car-like platform using materials, structural, and interior components that achieve a 40% mass reduction for a given size vehicle. The advanced sport wagon has a wider track and is a bit lower than today's standard SUVs. It is streamlined to a drag coefficient (CD) of 0.30 and uses best-practice packaging to maximize its interior space. A compact, high-output GDI engine is mated to an ISG and electronic motorized gear-shift (or perhaps a toroidal continuously variable transmission [CVT]) to provide the ultimate level of powertrain efficiency short of hybrid drive. We estimate an incremental cost of $2,500, well in line with the trends that have been underway in the SUV segment and clearly a bargain given the environmental and safety benefits that would be achieved.

The Hybrid Packages incorporate what is the most exciting technology now entering the market. Hybrid electric drive combines an electric motor, battery, and sophisticated controls with a combustion engine, offering very high efficiency and smooth, responsive operation. Hybrid propulsion can take many forms, from slight degrees of hybridization (perhaps using an ISG) to designs that drive the wheels only electrically. We analyze two versions:

• Mild Hybrid - drawing less than 25% of its total power from the electric drive system, allowing idle-off and some regenerative braking, but no significant electric-only driving
• Full Hybrid - drawing 30-50% of its total power from electric drive, for added efficiency and some electric-only driving but no real electric-only trip range

The Honda Insight can be considered an example of a mild hybrid and the Toyota Prius an example of a full hybrid. None of the HEV designs we analyze would plug-in to recharge. All of their energy comes from the gasoline, but the battery buffers power use to let the engine operate more efficiently and to restore power foregone by engine designs that trade-off power to achieve higher efficiency. Again, results vary by vehicle type and hybrid version, but on average we find net efficiency benefits of 23% over the conventional Advanced Package.

We assume that HEVs are built on vehicle platforms already improved to the level of our Advanced Package given the 2010-15 time frame we consider. Available data suggest that HEV costs will still be relatively high, so we assume only a 2% share for two of our scenarios (this is a level that might be stimulated by the zero-emission vehicle [ZEV]credit programs in California and some other states). We also examine higher HEV shares, reaching about 6% of the market, or 1 million new hybrids in MY2012, for example. Given the efficiency benefits of hybrids relative to our modest package, a 6% HEV share boosts new fleet average fuel economy by about 3% compared to a fleet with only 2% HEV share.

Fleetwide Fuel Economy Results

To compute fleetwide results, we weighted redesigned representative vehicles by market shares of their respective classes, and blended small shares of HEVs into fleets still dominated by improved conventional vehicles. We assume a 50/50% mix of mild and full hybrids for the HEV share of the overall fleet. Three main scenarios span a range of possibilities:

a. A fleet of largely Moderate Package vehicles with a small HEV share

b. A blend of equal shares of Moderate and Advanced vehicles with a small HEV share

c. A fleet of largely Advanced Package vehicles with a small HEV share

Scenario A has two variants, A1 with the 2% HEV share and A2 with a 6% HEV share. Scenario A1 yields a 51% fleet fuel economy increase for a 5.8% average price increase (compared to a 47% mpg improvement for a 5.5% price increase with a fleet of Moderate Package vehicles only, without HEVs). Achieving this improvement in roughly 10 years implies a rate of progress for the whole fleet similar to the 25% improvement over 5 years that the Ford Motor Company has voluntarily committed to for its SUV fleet. The more aggressive Scenario C, based on our Advanced Package of technologies, yields a 72% fuel economy improvement for an 7.8% increase in average vehicle price. Scenario B is an intermediate case with the larger HEV share, for a fleet of 47% Moderate, 47% Advanced, and 6% Hybrid vehicles. Its results fall between those of scenarios A and C, for a 62% fleetwide mpg improvement at a 7.4% average price increase.

For all scenarios, the average cost of conserved energy ranges 70-80¢/gal (adopting a societal cost/benefit perspective with a 12 year lifetime and 5% real discount rate). Thus, the new vehicle price increase, amortized over a vehicle lifetime of fuel savings, is less than the expected pre-tax price of gasoline (about $1.00/gal) and well below the consumer price (about $1.35/gal) expected through 2015. This degree of cost-effectiveness, with lifetime fuel savings more than covering the up-front cost of technology improvements, means that CO2 reductions are achieved at net savings. Under the economic assumptions made here, these savings are on the order of $100 per metric ton of carbon (carbon-mass basis counting only the direct CO2 emissions from fuel combustion at the vehicle).

Neither diesel engines (nor hybrid powertrains, for that matter) are needed to achieve the 50-70% improvements we identify for fleetwide fuel economy. The advanced technology case does assume the use of GDI engines, but tuned to maintain ultra-low emissions. Higher efficiency levels could be achieved with GDI engines tuned to operate lean, which we did not analyze, and neither did we analyze diesel engine options. Breakthroughs in emissions control for either lean GDI or diesel would enable the attainment of fleetwide efficiency levels 10-20% higher than those identified here.

Breakthroughs could also occur in cost-reducing approaches for hybrid vehicles. Perhaps more significantly, hybrid drive offers benefits besides fuel efficiency, enabling it to provide customer value beyond that associated only with fuel savings. HEVs would have high-power onboard electrification capabilities and offer the possibility for new levels of powertrain responsiveness and controllability. Coupled with the strategic interest in moving toward electric drive in the long term (perhaps using fuel cells instead of a combustion engine), automakers may have reasons to increase HEV production beyond the levels assumed here. If deployed on efficient platforms and in ways that emphasize fuel economy, the result could be fuel economy levels even higher than those of our most advanced scenario. As for the ISG, the broader benefits of hybrid technology suggest that not all of its cost need be allocated to its fuel economy benefit, although that is the approach taken here absent data to support a different allocation.

Energy and Carbon Impacts

Using the new fleet average fuel economy scenarios as input to a model representing turnover of the vehicle stock (all cars and light trucks, new and used) yields projections for nationwide fuel consumption and CO2 emissions. What has been a "business-as-usual" baseline of flat fuel economy may be changing in light of the Ford and GM promises to improve SUV and light truck fuel economy. Nevertheless, flat efficiency plus ongoing increases in vehicle miles of travel (VMT) still provide a good baseline for comparison. Under such assumptions, total U.S. light vehicle fuel consumption would reach nearly 10 million barrels per day (Mbd) by 2010 and nearly 12 Mbd by 2020. For reference, consumption was 6.3 Mbd in 1990 and (preliminary estimate) 7.7 Mbd in 2000 (the latter value equals 118 billion gallons of gasoline per year). Parallel growth will occur in greenhouse gas emissions, certainly in the near term, since no nationally significant fuel substitution is plausible over the next decade, and probably even through 2020.

We examined linear ramp-ups of new fleet average fuel economy starting in 2003 and reaching our scenario levels by 2012. This decade-long time frame is long enough for automakers to redesign their cars and trucks in the course of routine reinvestments in upgrading their products. Based on market share weighting of our representative vehicles, our 2012 targets are: 36 mpg level for Scenario A, 39 mpg for Scenario B, and 41 mpg for Scenario C. The associated fleet-average retail price increases are roughly $1300, $1700, and $1800 (2000$). For Scenario A, the nationwide fuel savings are 1.0 Mbd by 2010 and 3.1 Mbd by 2020, when the improved technologies will have almost fully permeated the vehicle stock. Figure ES-2 shows these results in terms of projected light vehicle CO2 emissions; compared to the baseline, fuel consumption and CO2 emissions are reduced 10% in 2010 and 26% in 2020.

Greater reductions are, of course, achieved for the higher fuel economy scenarios. For Scenario C based on the Advanced Package of technologies, the savings are 1.3 Mbd (13% below baseline growth) in 2010 and 3.9 Mbd (33% below baseline growth) in 2020. These scenarios examine only the effects of improving the fleet to the designated technology-based levels; we did not examine what would happen if the rates of fuel economy improvement could be continued by drawing upon future technological progress. Thus, none of the scenarios suffice to return U.S. light vehicle fuel consumption or CO2 emissions to their 1990 values. As shown in Figure ES-2, Scenario C comes close to returning consumption and emissions to the 2000 level (7.7 Mbd, 284 million metric tons carbon-equivalent [MMTc]), pulling them down to 7.8 Mbd (289 MMTc) by 2020. Not shown here are longer-term projections; however, barring additional efficiency improvements, consumption under all our scenarios turns upward again shortly after 2020, once the fuel economy improvements have largely permeated the on-road stock and VMT growth again starts to dominate.

Figure ES-2. U.S. Car and Light Truck Carbon Emissions: Baseline Growth vs. Scenario A, Moderate Package with 2% HEVs (middle bars), and Scenario C, Advanced Package with 2% HEVs (lower bars)

A critical question is the extent to which these technical capabilities can be applied to address the concerns that motivate fuel economy policy. By our reckoning, the direct costs are low, but so is market interest, which to date has valued technology improvement mainly for delivering customer benefits other than higher fuel economy. A key challenge is that of providing the policy guidance and leadership needed to harness the technical options identified here in ways that improve the fuel economy of cars and light trucks in the marketplace.