Pike Research
Cleantech Market Intelligence
Fuel Economy: A Legitimate Feature Not Bound by Economics
In recent years a greater emphasis on MPG when sticker shopping has emerged. Between fluctuating gasoline prices, a greater selection of hybrid vehicles and the promise of plug-ins and battery electric vehicles, and mandated increases in CAFE standards, fuel economy is becoming an important feature for many consumers.
Makers of internal combustion engine vehicles are looking to accentuate the efficiency of many of their “traditional” models to meet federal requirements and better compete with hybrid vehicles. This includes the addition of a turbocharger, which enables manufacturers to use smaller engines while increasing fuel economy by up to 20 percent. Turbochargers reduce emissions as they burn exhaust gas as fuel, and also provide additional power for acceleration.
Honeywell, which makes turbocharger equipment, put out a study claiming that 80 percent of consumers who understood turbocharger’s impact on fuel economy would be interested in buying a turbocharged vehicle.
Honeywell’s press release adds, “According to the Department of Transportation, nine out of the ten most popular vehicles purchased in the recent ‘Cash for Clunkers’ program were equipped with smaller and more fuel-efficient versions of conventional technology engines.”
This overall trend towards fuel economy is significant not only for its immediate impact on emissions, but also because it forces everyone — both hybrid and conventional automakers — to continue to up the ante in their designs. Hopefully the 35.5 mpg requirement for vehicle fleets by 2016 will be a floor upon which automakers will seek to distinguish themselves.
“Fuel economy as a feature” has a growing audience that auto manufacturers (such as with the Ford Focus) are tapping into. This affinity for higher MPG ratings — and therefore the desire to buy hybrids — is similar to the desire for other vehicle features, such as the imposing size of the Hummer, the power to do 160 mph, or the roar of the Harley. It does not have to be grounded in economics or reality, it just has to be something people want.
Over the years much analysis has been written about how hybrids don’t make economic sense because the added cost may not be offset by fuel savings. Just like turbochargers, the economics doesn’t have to add up to a fast payback, and that will carry over to plug-in hybrids as well. For the middle aged couple with kids off to college, the hybrid plate is just as important as the Porsche, Jaguar or Maserati name is for another type of consumer.
For those who believe in the importance of reducing emissions, oil imports and trips to the gas station, diesel vehicles should have equal mindshare even though they have been eschewed by American buyers. As an example of luxury meets diesel turbocharging, there’s the new BlueEFFICIENCY Diesel SUVs from Mercedes. Europe has always been way ahead of the U.S. in embracing diesels, but that may slowly be changing.