by Erin Auel and Matt Kasper
The Tesla Model S, the company’s first full-size sedan, won the 2013 Motor Trend Car of the Year on November 12, garnering a unanimous vote from the panel of judges. This is the first electric car in the 64-year history of the auto industry’s most coveted award.
“We’re going to look back and see this as a point at which the gears of history really turned,” said Tesla CEO Elon Musk.
It’s important not to read too much into this specific award. While electric vehicle demand continues to grow, the market has been choppy and companies still need to make important cost reductions in order to dramatically expand sales. But it does illustrate the outstanding performance and design of electric vehicles hitting the market — many of which are built in the U.S.
And as consumers get more comfortable with electric vehicles, hybrids, and smaller cars generally, it shouldn’t come as a surprise that sales of cleaner, “greener” cars are increasing due to shifting demands.
With high gas prices at the pump, fuel efficient vehicles and have remained resilient. In addition, the average fuel economy of new passenger vehicles for model year 2012 reached its highest average of 23.6 miles per gallon this year. This led the NRDC and Baum & Associates to declare that the 2012 model year was “The Year of the Green Car.” Here’s why, according their analysis:
- Model year 2012 fuel efficiency for new vehicles hit an all-time high. The sales-weighted average fuel economy of new passenger vehicles for model year 2012 was 23.6 MPG, up more than 1 MPG from the previous record high of 22.5 MPG set in 2011. This was the single biggest one-year increase in MPG in the past five years. Calendar year-to-date 2012 fuel efficiency is even higher: an average of 23.8 MPG through September. (Fuel economy data is derived from the research of Michael Sivak and Brandon Schoettle (University of Michigan) at http://www.umich.edu/%7Eumtriswt/EDI_sales-weighted-mpg.html.)
- Higher average fuel efficiency for model year 2012 is a good thing for the American auto industry, rather than a reflection of falling sales. Auto sales for the 2012 model year reached 14.1 million units, an increase of more than 10 percent (1.7 million) from the previous model year. In the recent past, major increases in fleet fuel efficiency were generally marked by rapid decreases in vehicle sales. For example, the three-year period from 1980 to 1982 saw increases of 3.3, 1.3 and 0.6 MPG respectively, but vehicle sales declined by 2.5 million, 750,000, and 820,000, respectively. Similarly, over the two-year period from 2007 to 2009, fleet fuel efficiency jumped 1.8 MPG, but annual vehicle sales dropped by over 5.7 million. The uncoupling of rising average MPG and falling auto sales in model year 2012 was due in large part to much wider availability of vehicles with higher fuel economy.
- The number of high-MPG vehicles available to consumers is rising rapidly. Popular vehicle nameplates with improved efficiency more than doubled from model year 2009 (28) to model year 2013 (61). Fewer than a third (17) of the model year 2013 vehicles with higher MPG are compacts or subcompacts, contrary to the assumption made by many that the only high MPG cars are “small cars.”
- Hybrids and plug-in electric car sales are on track to top half a million units for the first time in a calendar year (2012) and a model year (2013). This strong performance directly debunks the linked (and equally mistaken) notions that (1) consumers don’t want higher MPG vehicles and (2) there is no demand for the high-end technology that powers the highest MPG-vehicles.
After decades of manufacturing and employment in decline, the U.S. is seeing significant job growth anchored by a revival in advanced clean vehicle innovation and manufacturing. A wide range of businesses, from large auto-supply companies to small start-ups, are meeting increasing demands for fuel efficient technologies and electric vehicle components. The final fuel-economy and carbon-pollution standards for 2017 to 2025 will also continue to spur innovation, production, and job creation in the auto industry.
But for many consumers, the $7,500 federal tax credit incentivizes the purchase of electric vehicles. The Congressional Budget Office reported in September that the tax credits for electric vehicles aim to make the initial purchase less burdensome for consumers and therefore make these cars more competitive.
Ensuring that the U.S. is a global leader in electric and fuel-efficient vehicles will result in job-growth, consumer savings, and greater competitiveness in the world market. The auto success story demonstrates that the American industry can achieve dramatic cuts in oil demand and carbon pollution; however federal lawmakers must get behind this vision and find additional ways to support the transition to a cleaner economy.
Erin Auel is an intern on the Energy Team and Matt Kasper is a Special Assistant for the Energy Team at the Center for American Progress