New Efficiency Tech Costs Hard to Recover

AutoObserver Annuel Fuel Spending MPG chart

In brief: CAFE requirements for 2016 are 35.2mpg, but vehicle costs are likely to rise due to the technologies required to meet that mandate being difficult to recover from fuel savings.

The word

Edmunds AutoObserver MPG vs. Tech Cost Chart

Edmunds AutoObserver has broken down costs versus payback in terms of fuel savings as technology pushes the MPG envelope and automakers strive to meet 2016 Corporate Average Fleet Economy (CAFE) requirements.

The report states:

Numerous recent studies have suggested the cost of this technology, however, might be unpalatable to average consumers. And an unpalatable cost to customers becomes an unsellable vehicle for manufacturers. The environmental advance of reducing fuel consumption is a worthy societal goal, but as some studies have suggested, the economics of increased fuel economy may be disproportionately borne by consumers who don’t save enough from smaller out-of-pocket fuel expenses to offset the end cost of efficiency-enhancing technology.

Edmunds' analysis shows that at today's average gasoline price of $3.65/gallon, it would require years of vehicle ownership to meet the average $1,500 in addition cost for these new technologies.

And so ...

In fact, the higher the economy gains in fuel savings, the lower the overall actual savings for the driver.

Photo credits: Edmunds AutoObserver

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