How Fuel-Efficient Are Today's Cars?

Jim Tkatch Dr. Daniel Yergin, CNBC global energy analyst & Chairman of CERA

Automobiles today are a lot more efficient compared with those in the bellwether year of 1973—when the average car managed just 13.4 miles per gallon. Legislation enacted in 1975 set a standard—27.5 mpg by 1985 for new cars on a fleet average for each manufacturer.

The effects became clearly felt as new cars entered the driving fleet and old ones were retired. The fuel efficiency of the entire automobile fleet - new and old cars on the road -reached 22.1 mpg by 2001. Since then, however, the pace of fuel efficiency gains has slowed—flattening out at 22.2 mpg by 2005.

The reason that the fleet average is lower than the mandated 27.5 mpg new car average is that actual road mileage under varying road conditions is roughly 15% lower than the Environmental Protection Agency tests. Also, fuel efficiency tends to deteriorate as cars get older.

Light trucks (SUVs, minivans, vans, and light pickup trucks) drive to a different drummer. The federal fleet average target for new light trucks is 21 mpg, having been slightly raised in 2005 with further increases to 22.2 mpg being required for the 2007 model year trucks. Older ones faced lower standards. The average for all light trucks on the road is currently 16.9 mpg as of 2005, less than the federal target for new light trucks.

Since light trucks are a growing share of the vehicle fleet, they have pulled down the average for all vehicles to 19.8 mpg in 2005 (the last year for which complete data are available)—which reflects a drop from the peak of 20.2 mpg attained in 2001. The rise in the share of light trucks in the vehicle fleet is a result of changing preferences by consumers, who have over the years paid less attention to fuel effciency and instead sought more size, power, and performance from their vehicles.

Now, it appears that interest in fuel efficiency has once again become important to automobile buyers.

Daniel Yergin is CNBC’s Global Energy Expert and the Chairman of Cambridge Energy Research Associates. He received the Pulitzer Prize for his book The Prize: the Epic Quest for Oil, Money, and Power.