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Introduction

The period from 2025 to 2035 will be a time of pivotal change for fuel economy of light-duty vehicles (LDVs) in the United States. By the time this report is released in 2021, the United States will be approximately 15 years into the modern era of increasing fuel economy standards, tracing back to 2005 when the light-duty truck standards began to increase. In this report, the committee projects and estimates the fuel economy technology improvements that may be feasible in the next 15 years. Energy savings by LDVs over the past 15-year period have come primarily from improvements in internal combustion vehicles, with only minor impact from alternative fuel powertrains. There continue to be incremental improvements available in internal combustion engines (ICEs); however, the most dramatic improvements in fuel economy and reductions in greenhouse gas (GHG) emissions come from electric-ICE hybrids, and battery electric vehicles (BEVs) and fuel cell vehicles. In the next 15 years, and in particular in 2025–2035, the two central issues are (1) whether the United States will regulate LDVs to deeply reduce GHG emissions and (2) how much BEVs and other alternative-fueled vehicles can penetrate the new vehicle fleet in the United States. Of course, other factors will also determine fuel economy improvements in this next era through 2035, including the development of connected, autonomous, and shared vehicles; other regulatory programs at the international, national, state, and local levels; and consumer response to new vehicle technologies.

This introductory chapter begins with a brief summary of the status of fuel consumption, energy efficiency, and GHG emissions of LDVs on U.S. roads today, and then provides further detail on some of the relevant changes expected in the 2025–2035 period.

1.1 A SNAPSHOT OF TODAY’S LDV FLEET

Passenger vehicle, on-road travel is the primary means of transportation in the United States. In 2017, there were almost 251 million LDVs registered in the United States, such as sedans, crossovers, sport utility vehicles (SUVs), vans, and passenger trucks. They traveled a total of 2.88 trillion miles and consumed 129 billion gallons of fuel, resulting in 4.82 trillion miles of passenger travel (FHWA, 2017). In that same year, LDV energy consumption represented 17% of total national energy use. That energy is provided primarily by gasoline (89%), diesel (3%), ethanol (8%), and electricity (0.04%) (Davis and Boundy, 2020; EIA, 2020). Despite a pause in 2008–2011 during a national recession, vehicle miles traveled (VMT) have continued to increase year over year, as have other indicators of vehicle use, such as the number of registered vehicles and total consumption of fuel (Figure 1.1).

Operation of the LDV fleet provides great value to individuals and to the nation, but also has large environmental, human health, and other costs. Reducing these costs motivates improvements in vehicle fuel economy

and energy efficiency. The combustion of petroleum fuels to power LDVs produces 17% of U.S. GHG emissions (EPA, 2019), as well as a significant fraction of emissions of important air pollutants such as ozone precursors (volatile organic compounds and nitrogen oxides [NO_x]), carbon monoxide, sulfur oxides, and particulate matter, including black carbon. Use of petroleum fuels also exposes a major sector of the U.S. economy to the volatile world markets for gasoline and diesel, even with increased domestic production. Last, purchase of fuel is the largest operating expense to the user of an LDV, with consumers spending on average $2,109 on fuel, 2.7% of their income. To reduce these private and public costs from petroleum dependence, the U.S. government began requiring minimum fuel economy standards for passenger vehicles in 1978.¹ To meet these standards, automakers implemented technologies for fuel economy, ranging from engine and transmission improvements to vehicle design and lightweighting. The opportunities and costs of technologies for fuel economy to be implemented in the 2025–2035 vehicle fleet are the primary subject of this study, requested by the U.S. Department of Transportation (DOT) in response to a congressional mandate in the Energy Independence and Security Act of 2007.

1.2 A LOOK AT THE FUTURE

The future of LDV technologies is uncertain and likely disruptive, but there is opportunity for positive changes that will benefit vehicle users, vehicle owners, vehicle manufacturers, and the health of the planet and its people. The future fleets of LDVs in 2025–2035 will depend on technological availability (technology push); consumer acceptance and demand for new types of vehicles (technology pull); and regulatory, business, and economic factors. Key changes in technology push and pull, global market factors, and energy use implications for the future of LDVs are summarized below.

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¹ Further discussion of the history of fuel economy regulation is found in Chapters 2 and 12.

1.2.1 Future of Technologies

Automakers and automotive industry suppliers have continuously improved technologies for LDVs, in response to consumer demand for vehicle features such as horsepower, comfort and convenience, carrying capacity, fuel economy, safety, and advanced technology. Safety, environmental, and other vehicle regulations have also driven technology development and implementation. Historically, major vehicle technology advancements have included improved engines and transmissions, emissions controls, introduction of air conditioning, introduction of seatbelts and airbags, and development of hybridized and fully electrified powertrains. Some of the most recent improvements include advanced engine technologies such as turbocharging and downsizing, 8- to 10-speed transmissions, optimized vehicle design and materials substitution, longer-range electric vehicles, and many safety and convenience features such as lane keeping and automatic braking. On the horizon, vehicle and travel system advances may include significant to total vehicle automation and connectivity, vehicle sharing in addition to personal vehicle ownership, improvements in cost and capabilities of electric vehicles and their infrastructures (including both battery and fuel cell vehicles), and implementation of low-carbon fuels. These technologies have been enabled by automotive-specific technology development, such as in mechanical and electrical engineering, but also by developments in other fields including consumer electronics, communications, control systems, and material science.

1.2.2 Future of Market in United States and Globally

Technology implementation is impacted not only by technology availability and cost but also by customer demand in the domestic and global vehicle market, and by regulatory policies. As the market grows for electric vehicles and autonomous vehicles—which offer a different ownership experience to the consumer—consumer expectations and demand may change. In 2018, 17.3 million new vehicles were sold in the United States (Jato, 2019b). Over the past 30 years, and especially in the past 10 years, U.S. customers have moved strikingly away from compact cars and sedans and into SUVs and crossover utility vehicles (CUVs) (Figure 1.2). In 2018, coupe,

sedan, and wagon-type cars represented only 31% of LDV sales, with the remaining 69% being SUVs, CUVs (including those classified as cars), vans, and trucks. Consumers are purchasing these vehicles for the passenger room, ride height, ease of entry and exit from the vehicle, and cargo capacity. Consumers have also started moving toward greater purchases of alternative powertrain vehicles such as hybrids, BEVs and to a lesser extent, fuel cell vehicles.

All automakers selling in the U.S. market also sell vehicles in other countries, in a market of approximately 86 million new LDVs sold globally in 2018 (Jato, 2019a). Compared to the U.S. market, consumers in China, Japan, and Europe tend to purchase smaller vehicles and more sedans, although the shift to larger vehicles is also occurring globally. Fuel quality and price differs globally, impacting consumers’ value for vehicle efficiency and preference of fuel type (diesel, gasoline, electricity). As the market for vehicle models and technologies is becoming increasingly globalized, automaker design decisions are responding to this global marketplace as well as national and regional environmental, health, and safety regulations.²

The combination of new types of vehicles, new models of vehicle ownership, and increasing globalization of the vehicle manufacturing industry driven by regulatory and market developments in several major markets around the world portend highly disruptive changes in the automobile industry over the next couple decades. Attempting to predict the timing and direction of these changes is difficult given the multiple factors that will affect future vehicle technologies and sales. Nevertheless, by carefully studying and integrating vehicle technology feasibility and costs; consumer expectations and shifts; and regulatory and market pressures at the state, national, and international levels, it is possible to project a series of reasonable scenarios for the future, which this report attempts to do.

1.2.3 Energy Use Implications

Because vehicle technologies can influence multiple desired vehicle attributes such as power, efficiency, convenience, and cost, automakers tune technology implementation to reflect the desired suite of vehicle attributes within the constraint of compliance with applicable regulatory requirements. In some cases, decisions are made to trade attributes off against one another, such as optimizing for performance³ (power) versus fuel economy when turbocharging an engine or when implementing a lightweighted vehicle design. In other cases, there may be complementary benefits of technologies, such as safety features like automated cruise control or optimized engine controls that also yield fuel economy benefits. Some vehicle technologies may cause the total VMT to change, in addition to the per-mile change in fuel economy. For example, if automated and connected vehicle technologies become a significant part of the U.S. vehicle fleet, the changes in VMT may become even more important, as traveling by LDV becomes greatly easier, safer, more accessible, and more appealing to many travelers. Changes in VMT are important, as they impact total energy use of the light-duty fleet and hence total costs to individuals and to society.

1.3 LDV SYSTEM ENERGY USE

Vehicle energy consumption has significant costs (in fuel, energy, emissions, congestion, etc.) and benefits (movement of people and goods). Improving the energy efficiency of vehicles reduces fuel-based operating costs, as well as the emissions and other impacts associated with combustion onboard the vehicle or in the energy system used to power the vehicle (using liquid fuels, hydrogen, or electricity). Key considerations that influence system energy use and associated emissions and impacts include vehicle efficiency per mile, total vehicle use, and the life cycle energy and emissions of different vehicles and fuels. These considerations can be described under the following two aspects of vehicle energy and emissions impact: (1) rate-based performance standards versus total performance (e.g., grams per mile of emissions versus total emissions summed over the vehicles miles), and (2) vehicle-based versus full-fuel-cycle-based (including fuel production and transportation upstream emissions) versus full

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² Further discussion of other national and regional automotive regulations is found in Chapters 3 and 12.

³ In this report, performance refers to attributes related to engine and motor power such as vehicle horsepower and acceleration, and not to fuel economy or other desired attributes such as minimized noise, vibration, and harshness.

vehicle-life-cycle-based metrics (including all aspects of vehicle life cycle of full-fuel-cycle but also aspects such as vehicle manufacturing and end-of-life outcomes). Furthermore, these aspects can be applied to energy use, emissions, or petroleum consumption. Historically, LDV fuel efficiency in the United States has been regulated on a miles-traveled-per-volume-of-fuel basis, miles per gallon, with different minimum standards by vehicle class or footprint. Aspects of energy use and GHG emissions have been added to the regulatory structure over time.

When considering metrics for vehicle energy efficiency, some trade-offs include ease of measurement, control and attribution, and strength of the relationship between the metric and the goal of improved efficiency. In particular, measurability, control and attribution are important to addressing problems such as national-level economic, environmental or security costs or individual consumer costs and assigning them to a responsible party such as the automaker for vehicle fuel economy or the fuel/electricity producer for the off-vehicle portion of vehicle energy emissions. Also important is the choice of metric to prioritize the most relevant aspect of energy, emissions, or petroleum consumption for solving a given problem, such as improving U.S. energy security and reducing emissions leading to climate change. For example,

• Fuel consumption per-mile metric is more easily measured and certified in vehicle testing, while a total energy metric is more relevant to consumer costs and environmental, security, and other costs of nationwide GHG emissions.
• A measure of efficiency (or the related consumption) based on a metric other than liquid fuel volume, such as an energy or GHG metric, becomes more relevant as vehicles become increasingly efficient in using liquid fuels, as the type, source, and environmental impact of liquid fuels change, and as vehicles increasingly use non-liquid fuels like hydrogen and electricity.

As shown in Figure 1.3, depending on what metric you consider, different conclusions can be drawn about the performance of the transportation system. The above metrics expand the current definition of miles per gallon of

an individual vehicle at a point in time to include the vehicle’s total travel, the transportation energy system’s total consumption or emissions for all vehicles, and metrics that are not based on a liquid fuel. If per-mile efficiency is the primary metric, the system has become more efficient, increasing fuel economy 75% since 1970. If total system fuel use or associated energy use and GHG emissions are the relevant metrics, then total LDV system energy use has increased 57% owing to a small increase in per-vehicle VMT (+15%) and a large increase in vehicle population (+141%), even with more efficient vehicles (Davis and Boundy, 2020). In the period of 2025–2035, energy use aspects that may be relevant include fuel volume, energy use, and GHG emissions; per-mile impacts, per-vehicle impacts, and total impacts; and well-to-wheels and full vehicle life cycle analysis.

In 2025–2035, as the system boundary expands, it is likely that a wider variety of metrics will be relevant, including fuel consumption and related energy and GHG emissions per mile; total vehicle energy consumption or GHG emissions per year or lifetime; and total system energy consumption or GHG emissions per year or lifetime. This report will further discuss the appropriate vehicle energy system metrics in a later chapter, and report on vehicle efficiency using per mile metrics.

1.4 CONTEXT FOR FUEL ECONOMY IMPROVEMENTS

1.4.1 Key Changes for 2025–2035

Vehicle manufacturers are expected to make continued incremental changes in the fuel economy of vehicles powered by ICEs in the period from 2025 to 2035, and this report describes in detail the most significant changes that are expected in this time period. Significant changes are expected in the period from 2025 to 2035, including electric vehicles of various types approaching mainstream market attributes, as well as the deployment of new vehicle types—in particular, autonomous and connected vehicles. A driving factor in the total fuel economy of the U.S. LDV fleet in 2035 will be the success of these vehicles in gaining widespread acceptance and adoption across all new vehicle purchasers. Consumer perceptions and acceptance have always played an important role in the U.S. fuel economy program—for example, the current shift to greater numbers of crossovers and SUVs in the U.S. fleet is a reflection of consumer preferences, among other factors. Yet in the period 2025–2035, consumer expectations and behavior will play a much larger role than ever before in fuel economy, as the success of the new types of vehicles will depend not only on the cost, feasibility, and performance of the technology (technology push) but also on the acceptance of new types of vehicles by consumers that involve different modes of operation, refueling, and even ownership. In addition to consumer acceptance, other factors beyond the vehicle technology will also be crucial to the integration of autonomous and electrified vehicles, including the installation of appropriate recharging infrastructure, and transportation planning to allow such vehicles to thrive. Thus, this report necessarily goes beyond just vehicle technology to look at these other factors that will affect fuel economy of LDVs in the 2025–2035 period.

1.4.2 Pricing Fuels, Fuels Policy, and Fuel Energy Equivalency

Fuels have always played an important role in fuel economy and will play an even more important role going forward into the 2025–2035 period. Fuel prices affect consumer demand for more fuel efficient vehicles, which then influences manufacturer trade-offs between a variety of vehicle attributes. The rapid increase in natural gas and petroleum production in the United States beginning in 2009 has created increased supply of both commodities, helping to keep the price of gasoline for vehicles controlled. Yet, gasoline prices have historically fluctuated considerably in response to a number of domestic and international factors that are often unpredictable, so fuel costs are always somewhat of a wild card in projecting fuel economy trends in the future. One or more new liquid fuels may become more prevalent in the vehicle industry in the 2025–2035 period, including high-octane gasoline, low-carbon gasoline (e.g., California low-carbon fuel standard), and biofuels. Electricity and hydrogen used as fuels in LDVs create even more diversity in fuel costs, infrastructure, and propulsion technologies. Each of these fuel alternatives will have relevant fuel economy and GHG emission impacts, which are discussed in more detail elsewhere in this report.

1.4.3 Criteria Emissions Regulations

Since burning gasoline directly produces criteria air pollutant emissions and GHGs, criteria pollutants are directly tied to fuel economy and GHG emissions from ICEs. Criteria air pollutants are heavily regulated under the National Ambient Air Quality Standards (NAAQS) program, so revisions of criteria pollutant emission regulations often have implications for fuel economy. In some cases historically, the goals of increasing fuel efficiency and controlling criteria pollutants have been in tension. An example is the trade-off between optimizing NO_x emission control and maximizing fuel economy by adjusting the air-to-fuel ratio for the combustion process. In other cases, the interaction between fuel economy improvements and criteria pollutant reductions is synergistic rather than antagonistic. For example, shifting from an ICE to a BEV will generally reduce both fuel consumption and criteria pollutant emissions, with the level of benefits determined by the source used to generate the electricity used to charge such vehicles. Whether the interaction is synergistic or antagonistic, NAAQS have important implications for how fuel economy standards are achieved by automakers.⁴

1.4.4 Infrastructure—Highway Speed Limits, HOV Lanes, and Congestion Pricing

Infrastructure investment and regulations have always affected fuel consumption. Because new vehicle types such as autonomous and connected vehicles will likely present new models of vehicle ownership and use, infrastructure will be particularly important in the upcoming years in impacting fuel economy. Recharging or hydrogen fueling infrastructure, discussed in more detail later in this report,⁵ will obviously be critical to the deployment of BEVs and fuel cell vehicles. Higher speeds consume more energy per mile traveled than traveling at lower speeds. Thus, speed limits will affect total fuel consumption and GHG emissions. High-occupancy vehicle (HOV) lanes also encourage more passengers per vehicle, which can reduce energy consumption. Providing HOV lanes for electric vehicles can also help incentivize such vehicles.⁶ Last, a number of other regulatory and policy initiatives to reduce VMT will also affect overall fuel economy, such as ridesharing and carpooling programs, public transportation incentives, and urban planning initiatives that encourage less driving. New York City has recently decided to implement a congestion pricing system, and other cities are likely to follow suit in the 2025–2035 period; these initiatives will also reduce vehicle use and thus fuel consumption.

1.5 STATEMENT OF TASK

This report is organized to introduce the emissions, energy, and fuel consumption aspects of the LDV vehicle fleet today and into the future (Chapters 2 and 3); discuss vehicle technology packages likely to be prevalent in the model year 2025–2035 new vehicles; and discuss technology fuel consumption and costs (Chapters 4–10), as well as aspects of infrastructure and fuels related to those technologies. The report describes the consumer and regulatory aspects of fuel economy technologies (Chapters 10–12). Findings are made throughout the report, and recommendations are made on vehicle technology and regulatory matters. The overarching report findings and recommendations are highlighted in the final chapter (Chapter 13) of the report, as well as considerations for Congress, DOT, and the U.S. Environmental Protection Agency as they move forward under existing or future mandates for vehicle efficiency. The committee’s full statement of task is reproduced below:

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⁴ Further analysis of NAAQS and the impacts on fuel economy are discussed in the regulatory background in Chapter 3.

⁵ See Chapter 5.

⁶ Incentive programs for electric vehicles and other zero-emission vehicles are discussed in more detail in Chapters 11 and 12.

time period and their impacts on fuel consumption. It will also consider shifts in the personal transportation and vehicle ownership models and how such shifts might impact vehicle technologies. The committee will build on the assessments completed in earlier National Academies reports, including the first two phases of this series of studies, Assessment of Fuel Economy Technologies for Improving Light-Duty Vehicle Fuel Economy (2011) and Costs, Effectiveness, and Deployment of Fuel Economy Technologies for Light-Duty Vehicles (2015). It will reflect on developments since these reports were issued and investigate any new technologies and trends in consumer behaviors that may become important by 2035. In particular, the committee will:

1. Examine the costs (direct and indirect), fuel economy improvements, and potential implementation timing for high-volume production of technologies for internal combustion engine powertrains.
2. Examine the costs (direct and indirect), fuel economy improvements, and potential implementation timing for high-volume production of electric powertrain technologies. The committee shall include an examination of the cost, performance, durability, usable battery capacity and other issues related to critical components, including batteries, ultracapacitors, and power electronics and auxiliary vehicle systems such as heating and cooling. The committee will also address transition issues associated with meeting the infrastructure needs for such powertrains.
3. Examine the costs (direct and indirect), fuel economy improvements, and potential implementation timing for high-volume production of non-powertrain technologies including mass reduction, aerodynamics, low rolling resistance tires, and vehicle accessories. For mass reduction, the committee shall consider opportunities for a range of baseline vehicle materials, including steel, high-strength steel, mixed metal, aluminum, polymers, composites, and others. The committee shall include an examination of methodologies for cost assessment of mass reduction, including equipment and retooling costs, manufacturing issues, supply chain requirements, and implications for durability, safety, and reparability.
4. Consider the current and possible future role of flexibilities in the CAFE program on the introduction of new technologies, including credit trading, treatment of alternative fuel vehicles, off-cycle provisions, and flexibilities for small volume manufacturers.
5. Assess how shifts in personal transportation and vehicle ownership models might evolve out to 2035, how these changes could impact fuel economy-related vehicle technologies and operation, and how these changes might impact vehicle scrappage and vehicle miles traveled. Scenarios might be used to bound this task.
6. Examine consumer behavior issues associated with new fuel efficiency technologies, including acceptance of any utility or performance impacts and cost of new technologies. This could include considerations of consumers’ willingness to pay for improvements in fuel economy and other vehicle attributes.
7. Write a final report documenting the committee’s conclusions and recommendations.

1.6 REFERENCES