Tree Huggers

U.S. Car Fleet Sold in August Most Fuel-efficient Ever

U.S. auto dealers had a huge August. They also may have saved a few polar bears.

Last month American car companies had their best August since 2007. That’s good news for their balance sheets. It’s also good news for the environment.

According to data compiled by Michael Sivak and Brandon Schoettle of the University of Michigan Transportation Research Institute, the average sales-weighted fuel-economy rating (using the EPA fuel-economy guide) increased to 24.9 miles per gallon in August from 24.8 mpg in July. They calculate the rating by tallying the numbers of cars sold in the month by model and creating a blended average.

The increase (and general upward trend) reflects a series of powerful megatrends: changing consumer needs as gas prices rise, people moving to urban areas, and the success of hybrid cars.

The oil market has been extremely volatile so far in 2013, thanks to fears of a Middle East contagion stemming from Syria, as well as production disruptions in Nigeria, Libya, and Iraq. With gas hovering near $5 per gallon in some areas, fuel-efficient vehicles are appealing to more and more customers.

Hybrids, which can get up to 50 miles per gallon, are also helping to skew the number higher. Time was when the Toyota Prius was the only hybrid in the market. But each month, new hybrid models hit the car lots—from Toyota, yes, but also from Ford, Honda, and General Motors. And with each passing month, hybrids account for a larger and larger (albeit still small) chunk of the marketplace.

What’s more, with each passing month there is an increasing number of cars on the road that don’t use gas at all. Plug-ins like the Nissan Leaf saw record sales in August. And Tesla, the electric-car manufacturer, has been doing well. About 11,000 electric cars were sold in the U.S. in August.

But it’s not just high-end consumers buying hybrids and fancy baubles that are helping to push the number higher. Simply put, the numbers reflect that Detroit (after years of kicking and screaming) is steadily upping its game when it comes to squeezing more mileage out of traditional combustion-engine automobiles.

All that pressure from hybdrids, electric cars, and more energy-conscious foreign companies—not to mention higher standards put in place by the Obama administration—have forced the Big Three to focus on efficiency. Whereas fuel efficiency was once for crunchy yuppies, it’s now a must. Companies are integrating new technologies like start-stop engines and new materials. For example, this fall’s new Jeep now gets 30 mpg on the highway.

Maybe there is something to that whole theory of economic benefit from being environmentally friendly.