MILES TO GO

12.04.12

The Greenest Month Ever: Hybrids Race Ahead

Don’t focus on the so-so November sales. The real news is fuel efficiency, with hybrids and electric cars surging, writes Daniel Gross.

November 2012 may not have been the best month for sales of cars in recent memory. Some 1.14 million cars were sold in the month. Analysts expect about 14.4 million cars will be sold in the U.S. this year, and that sales will rise again in 2013. That’s an impressive comeback, but it doesn’t approach the sales levels of 2007.

But it is most likely to be the best month for fuel efficiency–quite possibly ever.

Yes, the Prius did well. Toyota sold 16,505 of the iconic hybrids, up about 8 percent from November 2012. But the difference between now and then is that the Prius–and the hybrids–are just the beginning. Competition, concern over gas prices, innovation, and new standards calling for higher gas mileage are combining to give consumers many more choices. And they are taking it up.

There are cars that run only on electricity, like the Nissan Leaf, which sold 1,539 units.

There are cars that run on electricity and gas, like the Chevy Volt, which sold 1,159 units. There are several new hybrids, and plug-in hybrids, on the market. Overall, Toyota sold 24,682 hybrids—there are four different Prius models plus Lexus hybrids–in the month, accounting for 15 percent of the sales, up from 28.7 percent from the year before. Ford’s new C-MAX hybrid, which debuted in October, and offers a plug-in hybrid option, sold 4,848 units.

And increasingly, cars that rely purely on the old-fashioned combustion engine are more efficient. General Motors offers “Eco” versions of models like the popular Cruze. Ford offers “Eco-boost”—a six-cylinder engine with more sophisticated electronic controls—as an option on many of its models, including pick-up trucks. “About 43 percent of the new Ford-150s sold use this engine,” notes Alan Baum, principal of Baum & Associates, a market-research firm specializing in the auto industry and fuel economy, in West Bloomfield, Mich.

Chrysler, which has been behind the curve in innovation, is playing the fuel economy game by rolling out smaller cars that get eye-popping mileage. In November 2012, Chrysler sold 4,489 Dodge Darts, which can get up to 41 miles per gallon; last November, the Dart didn’t exist. Chrysler’s sales of the gas-sipping Fiat 500 also shot up in the month to 3,603, more than double the November 2011 total of 1,618.

The U.S. car fleet, which has an average age of 11 years, is like a “rolling junkyard.”

This is all good news for the economy, and for the environment. The U.S. car fleet, which has an average age of 11 years, is like a “rolling junkyard,” as Mazda executive Jim O’Sullivan recently put it. Each month, a certain number of clunkers simply conk out. That’s bad news for the owner. But it means that the typical car leaving the showroom simply gets better mileage than the typical car that is being traded in or junked. As people realize that gas prices may be here to stay, all kinds of manufacturers are marketing fuel efficiency across their portfolios. We may have progressed to a stage where turnover and new car sales make the U.S. car fleet more efficient.

Thanks to these changes, recent years have seen impressive growth in fuel efficiency for new cars sold. Every month, Michael Sivak, director for Sustainable Worldwide Transportation at the University of Michigan’s Transportation Research Institute, and his colleague Brandon Schoettle, look at the cars sold in the U.S., check the fuel economy for the models, crunch the numbers, and essentially determine what the mileage is of the fleet of cars sold in the month. They call it “average sales-weighted fuel economy.” As you can see in the chart below, the measure has been rising solidly over the past five years.

November 2012 Auto Sales

In October, it stood at 24.1 miles per gallon—the highest level noted since the measurement began in late 2007. The October 2012 figure was up from 23 in October 2011—a 4.7 increase. More significantly, the measure is up from 20.1 in October 2007, representing a 20 percent increase in five years. “We have made very little progress since 1923 on fuel economy,” said Sivak. “But during the last five years we’ve made a huge change. The four miles-per-gallon gained since 2007 is a large improvement compared with what we have done over 80 years.”

Sivak is a professional, so he wouldn’t hazard a guess on whether November’s figure, which comes out later this week, will be a new record. But I will. November was likely the greenest month for car sales in modern American history. And December will probably be even greener.