Elicit Insights

Less Emissions, More Efficiency: The Automotive Industry's CO2 Reduction Journey

American Automotive Insights

25-jan-2023

In 2021, the average CO2 emission rate for all new vehicles reached a record low of 347 g/mi, a decrease of 2 g/mi compared to the previous year. At the same time, real-world fuel economy remained high at 25.4 mpg.

Over the past 17 years, the automotive industry has made significant progress in reducing CO2 emissions and improving fuel economy. Since 2004, CO2 emissions have decreased by 25% or 114 g/mi, and fuel economy has increased by 32% or 6.1 mpg. During this time period, CO2 emissions have improved in 14 out of 17 years.

Preliminary data suggest that the positive trend of decreasing CO2 emissions and improving fuel economy will continue into 2022. The automotive industry is expected to achieve even better results in these areas compared to what was accomplished in 2021.

record

low

co2

emissions

record

high

fuel

efficiency

25%

co2 emissions

have decreased

32%

fuel economy

has increased

The report analyzes five different vehicle types, including sedans and wagons, car SUVs, truck SUVs, pickup trucks, and minivans and vans. The distinction between car SUVs and truck SUVs is based on regulations, where 4-wheel drive vehicles or those weighing above a certain threshold (6,000 pounds) are considered trucks and are regulated as truck SUVs. All five vehicle types achieved record-high fuel economy and record-low carbon emissions in 2021. Minivans/vans improved by 3.9 miles per gallon, car SUVs increased by 2.6 mpg, sedans and wagons improved by 0.5 mpg, truck SUVs increased by 0.3 mpg, and pickups improved by 0.1 mpg.

The new vehicle market has been moving away from the sedan/wagon type and towards a mix of truck SUVs, pickups, and car SUVs. In 2021, sedans and wagons accounted for only 26% of the market, a significant drop from the 50% market share they held in 2013 and far from the 80% market share they held in 1975. On the other hand, truck SUVs reached a record high of 45% market share in 2021, while pickups increased to 16%. Despite improvements in fuel economy and CO2 emissions, the shift from sedans/wagons to vehicles with lower fuel economy and higher CO2 emissions has partially offset the benefits for the overall fleet.

the shift in consumer preference towards suvs and

pickups has Impacted overall emission Reduction Negatively

A combination of technological advancements and shifts in market trends influences the automotive industry. Factors such as weight, horsepower, and size can impact a vehicle’s CO2 emissions and fuel efficiency, even in the case of electric vehicles, which have zero tailpipe emissions. In the two decades prior to 2004, the trend was towards more powerful and larger vehicles with a corresponding decrease in fuel economy and an increase in CO2 emissions.

Since 2004, however, there has been a shift towards more fuel-efficient vehicles with technology innovations resulting in a 32% increase in fuel economy, 20% increase in horsepower, and 4% increase in weight, all at record highs. The average vehicle size, as measured by footprint, has also increased by 5% since 2008. While fuel efficiency has improved in all vehicle types, the trend towards larger, less efficient vehicles has offset some fleet-wide benefits that could have been achieved through technological improvements.

The changes in footprint, fuel efficiency, and CO2 emissions are a result of both design and technological advancements within each vehicle type and market shifts between vehicle types. For instance, the overall footprint of new vehicles has increased over the years, with larger vehicle types driving the trend. Although fuel efficiency has improved in all vehicle types since 2008, the market shift towards less efficient vehicle types has tempered the overall benefits achieved through technological improvements.

since 2004 the combination of

technology

innovation

and

market trends

have resulted in

32%

increase in average fuel economy of a new vehicle

20%

increase in horsepower

4%

increase in weight

32%

increase in average fuel economy of a new vehicle

20%

increase in horsepower

4%

increase in weight

Over the last five years, a comparison of the CO2 emissions of the 14 largest vehicle manufacturers in the U.S. showed that seven decreased the estimated real-world CO2 emission rates of their vehicles. With its all-electric fleet, Tesla remained unchanged because it produced no tailpipe CO2 emissions, and Mercedes also remained unchanged. During the same period, Kia achieved the largest reduction in CO2 emissions at 29 g/mi. The company reduced emissions across all the vehicle types it offers and decreased overall emissions even as its truck SUV production increased from 15% to 41%.

Toyota was next in line with the second-largest reduction in overall CO2 tailpipe emissions, at 28 g/mi, and BMW had the third-largest reduction in CO2 tailpipe emissions, at 10 g/mi. Both companies achieved overall emission reductions by improving all vehicle types, even as their truck SUV production increased.

Conversely, five manufacturers increased their new vehicle CO2 emission rates between 2016 and 2021. Mazda had the largest increase, at 24 g/mi, due to increased CO2 emission rates in their sedan/wagon and car SUV vehicle types, as well as a shift in production from 33% to 61% truck SUVs. Volkswagen had the second largest increase, at 18 g/mi, with a shift in production from 21% to 66% truck SUVs more than offsetting emission reductions within each vehicle type. GM had the third largest increase, at 17 g/mi, with a shift in production towards truck SUVs and pickups, as well as an increase in pickup emission rates, offsetting emission improvements in all other vehicle types.

For 2021, Tesla’s all-electric fleet had by far the lowest tailpipe CO2 emissions and the highest fuel economy of all the large manufacturers. Tesla was followed by a close grouping of Subaru, Kia, Hyundai, Nissan, and Honda. Stellantis had the highest new vehicle average CO2 emissions and the lowest fuel economy of the large manufacturers, followed by GM and Ford. Tesla also had the highest overall fuel economy, followed by a close grouping of Subaru, Kia, Nissan, Hyundai, and Honda.

Source: EPA

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