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New fuel standards: Costlier cars, but less expensive to run

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(Read caption) A fuel-cell car from Taiwan's National Kaohsiung University of Applied Sciences makes a ceremonial start at the 2011 Shell Eco-marathon energy efficiency challenge in Malaysia. By 2025, cars will be far more fuel-efficient than today's average model but most will still be using gas.

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One year on, debate still rages over the federal government’s new fuel standards.  Will stricter rules, forcing a 60 percent rise in fuel economy by 2025, help consumers – or hurt them?

The answer’s not easy because a big swing in oil prices or an unexpected technology breakthrough can change the calculations. But barring that, there are discernible trends within the auto industry that are likely to shape the future. Here are three:

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  • Consumers will pay more for their cars up front, but they’ll save overall because they’ll be able to use far less gasoline.
  • Gasoline engines won’t disappear. Despite all the attention given to electric cars right now, the American auto fleet will remain gasoline-powered – overwhelmingly so – through 2025.
  • Fuel efficiency won’t radically alter car design. The industry intends to make its technological changes as invisibly as possible.

“Americans don’t have to sacrifice affordability, comfort, or even the ‘wow’ factor when they’re shopping for gas-sipping cars,” said James Guest, chief executive of Consumer Reports, at a Consumers Union conference in Yonkers, N.Y., earlier this year. The next wave of consumer automobiles won’t look or feel wildly different from what’s on the market today, he adds. 

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For consumer pocketbooks, however, the new Corporate Average Fuel Economy (CAFE) standards represents a big change. Starting in 2017 and moving up incrementally through 2025, CAFE standards will rise from the current 34.2 miles per gallon to 54.5 m.p.g. That’s an average for each automaker’s fleet, so some  cars will get even better mileage, some will be worse.

All those incremental fuel-saving changes come at a cost. Consumers Union, which publishes Consumer Reports, estimates they will boost the sales price by less than $2,000 (in 2010 dollars).  But drivers will save so much in fuel costs that they will still net an average savings of $700 a year – or $4,600 over the useful lifetime of a new vehicle.

Another consumer concern is product choice.  In 1971, new federal “exterior protection” standards forced all new passenger cars to adopt much bulkier bumpers, which dramatically altered styling. This time, changes will be more subtle, auto experts say.

Visually, you can expect more streamlining.  Aerodynamic improvements are relatively low-hanging fruit for automakers. According to the US government’s fuel economy findings, only about 14 to 26 percent of energy from fuel in a contemporary automobile is used to propel the vehicle; the rest is consumed by losses to heat and vehicle sub-systems, such as interior climate control and electronics.

Inside, car companies are likely to take advantage of advances, such as start-stop technology (engines that shut down when vehicles idle), more seamless integration of vehicle engines and transmissions, and better engine cooling to improve efficiency. Such changes are more likely than a wholesale move to electric cars. 

“We do not expect electric drive to be the predominant technology in 2025,” says Ann Schlenker, director of the Center for Transportation Research at Argonne National Laboratory.

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