Is Obama's Hope For Better Fuel Economy Sputtering Out?
There were high-fives this week from Detroit to Washington, D.C., as carmakers celebrated record auto sales.
Americans bought 17.5 million cars and trucks in 2015. That's a huge turnaround from 2009, and the Obama administration cheered the rebound as vindication of the president's decision to rescue General Motors and Chrysler from bankruptcy.
"Because of the policy decisions that were made by this administration to place a bet on those workers, America has won, and our economy has been better for it," White House spokesman Josh Earnest told reporters Wednesday.
There's another element of the president's auto agenda, though, that's not looking so good: the drive for better fuel economy. In 2011, Obama struck a deal with automakers to sharply increase their vehicles' efficiency. The move was designed to save money for consumers. It was also a key ingredient in the president's recipe for reducing heat-trapping carbon pollution linked to climate change.
"By the middle of the next decade, the cars and trucks we buy will go twice as far on a gallon of gas," Obama promised in 2013. "That means you'll have to fill up half as often; we'll all reduce carbon pollution."
For a while, it worked. Automakers invested in fuel-saving technology, and consumers — burned by high gasoline prices — paid greater attention to miles per gallon. The average fuel economy of new vehicles rose from 22.6 miles per gallon in late 2011 to 25.8 mpg in mid-2014. But those improvements have now stalled.
Analysts at the University of Michigan's Transportation Research Institute say the average fuel economy of a new car sold in 2015 was lower than the year before. Last month, the average dipped below 25 miles per gallon.
What's behind the decrease? Cheap gas.
"When gasoline is cheap, the motivation just isn't there for consumers to pay a whole lot of attention to fuel economy," says Brandon Schoettle, who compiles the University of Michigan figures with his colleague Michael Sivak.
As gas prices tumbled through 2015, car buyers increasingly turned to less fuel efficient trucks and SUVs. And while those models go farther on a gallon of gas than they used to, they're no match for gas-sipping compacts.
"There's kind of two competing forces here," Schoettle says. "The automakers are doing what they can to improve the technology and the vehicles and make the fuel economy for these better and better each year. But on the other hand, you've also got the consumer behavior and what drivers want to purchase and drive around."
Automakers aren't likely to discourage consumers from switching, since trucks and SUVs are typically more profitable than cars. And if the trend continues, the U.S. will have a tough time meeting its climate goal of doubling fuel economy by 2025.
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