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Better Fuel Economy Offers Diminishing Fuel Savings

Fuel economy chartHigh fuel economy may not offer the kind of fuel savings that many perceive that it does, according to a brief released by the US Energy Information Administration.

Fuel costs, which depend on a vehicle’s fuel economy, the number of miles driven and the price of fuel, are important factors when consumers make vehicle purchasing decisions. However, according to the brief, fuel economy improvement exhibits diminishing returns in fuel savings.

As an example, it notes that switching from a vehicle that gets 10 miles per gallon to a vehicle that gets 15 mpg saves more fuel and results in greater fuel cost savings than switching from a vehicle that gets 25 mpg to one that gets 75 mpg. The fuel and cost savings of improving fuel economy from 12 mpg to 15 mpg are the same as increasing from 30 mpg to 60 mpg.

According to the brief, much of the reduction in fuel consumption and fuel cost comes from incremental fuel economy improvement at the lower fuel economy levels. For a consumer who drives 12,000 miles a year and pays $3.50 per gallon for gasoline, nudging fuel economy up from 10 mpg to 11 mpg saves $382 in annual fuel costs. Moving that number from 30 mpg to 31 mpg saves $45. Raising it from 40 to 41 mpg saves $26, and bumping it from 60 to 61 mpg saves just $11.

Diesel and electric vehicles will have different fuel savings and fuel cost. Diesel vehicles often have higher fuel economy than vehicles that run on standard gasoline, but diesel fuel is more expensive than gasoline. Electric vehicles can achieve high fuel efficiency and, by taking advantage of electricity, can achieve high fuel cost savings. While the higher cost of electric vehicles is deemed a negative in the brief, it should be noted that the market for electric vehicles is growing nationally.

As fuel economy for light-duty vehicles increases as the result of emission and Corporate Average Fuel Economy standards through 2025, gasoline-powered vehicles are expected to achieve fuel economy levels of 50 mpg for passenger cars and approximately 40 mpg for light-duty trucks, which the brief says will make these vehicles highly fuel-efficient competitors to diesel, hybrid and plug-in vehicles.

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