New cars and light trucks sold in the United States now get around 25.5 miles per gallon on average — far above levels from five years ago:
The chart comes from Michael Sivak and Brandon Schoettle of the University of Michigan. In June 2014, the average mileage of all new cars, light trucks, and SUVs sold in the United States was 25.5 miles per gallon. That's slightly below the record in May, but it's 5.4 mpg above October 2007.
So why is this happening? Back in December, the Environmental Protection Agency put out a detailed report showing how and why fuel-economy in the United States has improved so much. Here are five key points — as well as a chart showing that US fuel-economy is still far below that in Europe or Canada or Japan:
1) High oil prices and stricter standards are pushing fuel-economy up
The fuel economy of new cars and trucks in the United States basically stagnated during the 1980s and '90s before rising again after 2004.
Why the sudden shift? For one, global oil prices started rising, spurring drivers to buy fuel-efficient vehicles. Then, in 2007, Congress imposed a new round of fuel-economy standards on automakers — the first time those requirements had been tightened since 1984. The Obama administration later raised those fuel-economy goals even higher.
(Also note that this is only for new cars sold in a given year. The average fuel economy of all cars on the road is obviously lower: about 23.3 miles per gallon in 2012 for light-duty vehicles with a short wheel base, and 17.1 miles per gallon for vehicles with a longer wheel base.)
2) Smaller cars are regaining market share from SUVs and pickups
During the 1990s and 2000s, the popularity of SUVs in the United States soared. That's starting to change — again, driven in part by higher oil prices.
(Note that small cars saw their market share dip in 2011 — likely due to the earthquake in Japan which disrupted the supply chain of automakers like Toyota and Honda, who are both major manufacturers of smaller vehicles.)
3) Hybrids are growing — but tweaks to the combustion engine are still a huge source of innovation
When many people think of fuel economy, they think hybrids or electric cars. But that's only part of the story. The chart above shows various efficiency technologies that have become more prevalent since 2008.
As it turns out, improvements to the existing combustion engine has been a huge source of innovation over the last five years. There's gasoline direct injection, which is a more efficient technique for delivering fuel to the engine. Or there's cylinder deactivation to save fuel. These get less attention than electric cars, but they're key advances.
In the future, meanwhile, hybrid and "micro-hybrid" technology is expected to deliver even bigger gains — especially since new cars will need to average more than 35 miles per gallon on the road by 2025.
4) Cars are no longer getting heavier — and that's a major shift
Of course, improvements in engine technology are hardly new. But in the past, automakers would use those advances to build bigger, more powerful cars. That's no longer the case. U.S. vehicles are now getting more powerful and more fuel-efficient without adding weight.
(By the way, this isn't just an artifact of the fact that automakers are selling more cars and fewer SUVs and pickups — even the average weight of cars alone has roughly plateaued since around 2005.)
5) Every automaker is making cars with better fuel economy — not just Japanese companies
The conventional wisdom used to hold that only Japanese automakers were good at vehicles that got good mileage. But that's changing. Even the US automakers are adapting to the era of higher oil prices, and fuel economy is going up across the board.
But fuel economy in the US is still well below levels in Europe or Japan
That all said, US fuel economy (the light purple line at the bottom) is still well below levels in Canada, Mexico, Europe, or Japan. The chart above from the Center for Climate and Energy Solutions offers a comparison.
Now, US cars are expected to continue get better mileage in the years ahead. The Obama administration has set rules that will require all new cars and light trucks sold to average 54.5 miles per gallon by 2025. (Under EPA measurements, that will likely translate to around 35.4 miles per gallon on the road.)
Those rules will bring the new car fleet in the United States roughly up to where Japan is today. Europe, however, is expected to stay quite a bit ahead with its own set of standards.
Further reading: By the way, there's an excellent argument that we should measure fuel economy in "gallons per mile" rather than "miles per gallon." See here for more on that. Sadly, it's hard to defy convention here.