I’ve been covering energy issues for nearly 30 years, including the debate over auto fuel economy. Over that time, I’ve been amazed that report after report has concluded that automakers could significantly improve fuel economy at relatively modest cost. Consider this 1992 report from the National Academy of Sciences, which said that it was “technically achievable” for mid-sized cars to get up 35 miles per gallon at an additional cost of $500-$1250 per car. Since 1992, of course, there have been numerous technological advances for further gains in efficiency.
Yet for years, we never saw those potential gains from the domestic industry. Instead the Big Three historically fought any attempts to raise fuel economy standards, arguing that it would be impossible or at least far too costly. They finally lost the battle at the end of 2007, when Congress passed higher corporate average fuel economy (CAFE) standards. Part of the reason was that the political winds had shifted. But also the Big Three’s arguments had lost credibility and political support.
Now come more reminders of how feasible it is to build reasonably priced fuel-efficient vehicles. Consider Ford’s new Fusion hybrid, a pretty big car that is rated at more than 40 mpg and starts at $28,000. I haven’t driven it myself, but USA Today’s James R. Healey is a fan.
Or consider Honda’s new hybrid Insight, which will hit the U.S. market this spring. Thanks to the generosity of Honda’s Washington office, I did have the opportunity to try it. It’s great: plenty of zip, sharp handling, good visibility, and numerous clever features. It’s also rated at more than 40 mpg, and some reviewers have clocked considerably more than that. (The car’s video game-like displays make it easy to drive efficiently). The price hasn’t yet been determined, but is expected to start at $20,000 or less. This was one car I didn’t want to return.
And it’s also clear that more efficiency gains are possible. I recently had a chance to meet with executives from Continental. In addition to tires, the Hanover, Germany-headquartered company makes equipment like high-pressure gas injection systems. Add features like these to old-fashioned internal combustion engines (whether in a regular car or hybrid), and fuel economy can jump up 20% or better. “The internal combustion engine will be around for a long time because there are so many technologies improving the efficiency,” says Kregg Wiggins, senior vice president of the Continental’s North American region powertrain division.
BusinessWeek correspondents John Carey and Mark Scott, cover the green scene, keeping on top of the business aspects of energy, the environment and climate change, as well as the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.