ALEXANDRIA, Va.—Although alternative powertrains, including electric vehicles (EVs), are entering the market, it may be decades before these new technologies are commonplace in the U.S., according to a new report released by the Fuels Institute, titled “State of Transportation Energy and Vehicle Electrification.” During that time, consumers will continue to drive traditional liquid fueled vehicles.
In recent years, many new vehicles with advanced technologies have improved fuel efficiency and reduced emissions. According to the U.S. Environmental Protection Agency (EPA), between 2004 and 2018, miles per gallon (mpg) in light-duty vehicles increased by more than 35%, and carbon dioxide emissions declined by approximately 20%.
“Through 2018, however, there was little reliance on electrified powertrains to achieve these improvements. Instead, engineers focused on boosting fuel economy and reducing emissions by improving technologies within the internal combustion engine (ICE),” said John Eichberger, executive director of the Fuels Institute. “Today, most of the focus is on electrified powertrains, but that is only one tool vehicle manufacturers have available to meet fuel economy and performance standards, and there is still a lot of progress to be made.”
The EPA’s Annual Energy Outlook 2020 forecasts that light-duty fleet fuel economy will improve by 47% by 2040, with total passenger cars on the road delivering 42 mpg and light trucks delivering 30 mpg. If these forecasts transpire in the market, these efficiency gains could reduce gasoline consumption by 13% to 26% and diesel fuel consumption by 3% to 15%.
The continued reliance on ICEs to meet global environmental demands will result in additional technological improvements to engines, as well as expand the use of alternative and renewable fuels. This will accelerate if other states adopt programs like California’s Low Carbon Fuel Standard, where fuels like biodiesel, renewable diesel and ethanol have grown in market share. Those fuels are expected to generate more than three-quarters of compliance credits for fuel producers and marketers.
EVs are expected to increase market share of new vehicles sold, because new EVs are resolving some of the challenges to owning an EV, such as range anxiety, recharging time and purchase price. At the same time, policies like zero-emission vehicle programs continue to spread throughout the U.S., creating a strong incentive for manufacturers to bring more EVs to market. Dozens of new models are expected to become available in the next few years.
The existing vehicle fleet will be slow to transition to a predominately electrified market. “Even if the U.S. government were to mandate that 100% of new vehicles sold must be equipped with a new feature, and all other market dynamics remained the same (price of the vehicles, sales, scrappage rates, etc.), it would take nine years for that feature to be present in 50% of the vehicles on the road,” said Eichberger. “This is primarily due to the sheer size of the existing fleet and the length of time vehicles remain in service.”
EVs will compete for consumers on a variety of factors, including purchase price, access to fuel and electricity, perceived cost of energy consumption and model availability.
“It will be interesting to see how retail gasoline prices affect EV adoption over the next several years,” said Eichberger.
The latest Fuels Institute report demonstrates that the future of transportation energy will be a mix of different powertrains. And given current public policy objectives, consumers can expect that all new vehicles will be more efficient and produce fewer emissions than the vehicles of yesterday.
The “State of Transportation Energy and Vehicle Electrification” report is available at www.fuelsinstitute.org/research.