The Environmental Protection Agency (EPA) is responsible for setting the standards for fuel economy. Recently, new EPA fuel economy standards were proposed that seem to target trucks and vans above all else, demanding that they increase their efficiency by a large margin and they have until the year 2027 to do it. While these standards haven’t been set into law just yet, they most likely will be.
Instead of trying to make sense of the 1,329 page document that the EPA has put forth, let’s boil it down to a clear-cut vision of what the truck and van market is going to look like over the course of the next twelve years. We’ll begin with a brief history on these regulations, then move into a prediction of the future when it comes to heavy duty vehicles.
A Brief History of CAFE Regulations
CAFE stands for Corporate Average Fuel Economy and it represents the standards by which vehicles are held when it comes to their consumption of fuel. These standards began after the oil embargo in the 1970s by the Arab OPEC nations. This embargo resulted in massive gas shortages since fuel economy was not being regulated.
Starting with the 1978 models, the EPA began enforcing a minimum fuel economy standard for all of the mainstream U.S automobile manufacturers. To meet these new requirements, manufacturers had to average a 55 percent city and 45 percent highway economy for all of the cars and light trucks in their repertoire.
When they fell short (which was the case in many German cars) they simply paid some fines and went on their way. Interestingly, large trucs like the F-250s and 18-wheelers, were not regulated under these new standards.
In 2010, the CAFE regulations changed as a result of the new climate-change policies enforced by the EPA. For the 2011 models, there was now a dynamic and company-specific average based on production numbers and the physical sizes of each car model.
One way to avoid fines was to buy credits from competing companies that had managed to meet their fuel standards. This mean serious income for companies like Tesla. It was during this shift that trucks and vans were included in the new requirements, however, they were regulated by their payload and towing capacities, not by their size.
This new proposal works in a similar fashion, by rating diesel and gasoline trucks separately. The new proposal demands a 33 percent increase in fuel efficiency by 2027, so how is a change that drastic supposed to happen? The answer may very well lie in the hybrid technology market.
Are Hybrid Trucks and Vans Coming?
Taking the average numbers across GM, Fiat-Chrysler, Ford, Nissan, and Daimler, the new EPA standards require that they reach a combined 16 miles-per-gallon in 2027 compared to the 12 mpg in the 2016 models. This increase in efficiency cannot happen as a result of simple engine tweaks, it requires a more robust solution.
To break this down, the 2015 Chevrolet Express 2500 van currently gets a 12 mpg rating. It will need to reach a 15 mpg average by 2027 to meet these new standards. Comparatively, the Ford-250 has to go from 11 mpg to 13 mpg by 2027.
While these may seem like small tweaks, they are going to require some major changes. The EPA doesn’t require any specific technology, but it’s practically forcing the manufacturers hands when it comes to full-hybrid powertrains. The EPA predicts that it would take at least eight percent of all heavy-duty pickups and vans to implement this by 2027 to meet the new standard.
This is indeed troubling given the fact that after a decade on the market, hybrid cars have barely managed to account for three percent of the total U.S. auto sales. In terms of gasoline pickups, the EPA is suggesting that at least a quarter of them are full hybrids and two-fifths of them are limited hybrids to meet the new requirements.
On top of this, the agency has suggested that GM sells a hybrid truck for every four it sells by 2030. The last time GM did a hybrid pickup model, it had an impressive 25 percent increase in city ratings, but there was a major tradeoff when it came to acceleration and towing. Knowing this, the EPA is allowing each fuel-cell, hybrid, and all-electric pickup count as 1.5 vehicles toward their overall CAFE credits.
High-Tech Cars Are Coming, Like it or Not
Keep in my that while manufacturers must meet certain requirements to avoid fees, they can also buy and sell CAFE credits to offset their trucks and vans that perform under the threshold. Only time will tell how these changes affect the playing field, but if one thing is certain, change will be coming over the next several years.
all images via Car and Driver