U.S. passenger vehicles will need to deliver at least 40 miles per gallon by 2026, according to new federal mandates, which translates to major changes under the hood. But it also raises questions about what sort of vehicles you’ll be able to buy during the second half of this decade.
New fuel economy regulations from the National Highway Traffic Safety Administration (NHTSA), released last Friday, took many observers by surprise. The requirements came in slightly higher than the Biden administration originally proposed last year. They were a big turnaround from the modest 1.5% annual increases the Trump White House had enacted.
Now, for 2024 and 2025 model-year vehicles, automakers will have to boost the mileage of their fleets by 8% each year. For 2026, that jumps to 10%, reaching a Corporate Average Fuel Economy (CAFE) target of 40 mpg.
“When these standards take effect, Americans buying a new vehicle will spend less on gas than they would have if we hadn’t taken this step,” Transportation Secretary Pete Buttigieg said during a media presentation.
Perhaps, but the new CAFE standards raise more questions. What sort of vehicles will be available by the time 2026 rolls around? And how much might these standards impact what Americans have to spend for new vehicles by that point?
Powertrain, Not Vehicle Type Changes
Historically, fuel economy changes leave reasons to be wary. Back in the 1970s and 1980s, the first wave of fuel economy standards forced massive changes upon both automakers and auto buyers. Then, the industry rapidly downsized both its vehicles and its powertrains. By 1985, only a handful of models offered V-8 engines, and compact and subcompact sedans and coupes dominated American highways.
Carla Bailo, the CEO of the Center for Automotive Research (CAR), is confident we won’t see such dramatic changes this time around.
“It’s less about what type of vehicles consumers will buy and more about what will power those vehicles,” she said.
Ongoing research suggests consumers are growing more willing to consider alternative drivetrains. Even now, according to Ed Kim president of automotive marketing firm AutoPacific, “Consumers are turning to technology rather than downsizing to solve the problem of rising fuel prices.”
About 52% of those who responded to a new AutoPacific study said they’d stay with the same type of vehicle they’re now driving, even if gas were to keep climbing as high as a national median of $5.32 a gallon.
Only 25% said that would get them to change vehicle types. But a growing number of motorists are open to drivetrain alternatives.
Among SUV and CUV owners, 47% expressed interest in hybrid or plug-in hybrid technology, while 30% would consider an all-electric SUV or crossover when next shopping for a new vehicle if gas prices keep rising.
Fuel Economy Improvements
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Automakers are already moving fast to improve the fuel economy of their most gas-hungry models, including full-size pickups. Toyota no longer offers a V-8 engine with the redesigned 2022 Tundra pickup. But it delivers even better performance and towing capacity — as well as substantially better mileage — with the truck’s new i-Force Max option, delivering as much as 24 mpg on the highway, and 22 combined.
Ford’s CAFE numbers will get a big boost this year with the launch of its new, all-electric F-150 Lightning. And it’s not alone. At least 10 battery-electric pickups are set to debut by mid-decade from established brands that also include GMC, Chevrolet, Ram, Nissan, Toyota, and Kia
And you can toss in EV upstarts such as Rivian, Atlis, and Tesla as well.
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More EVs
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More Expensive Vehicles
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Automakers Support CAFE Standards
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