White paper
Efficiency technology and cost assessment for U.S. 2025–2030 light-duty vehicles
The paper builds on the modeling and peer-reviewed research underlying the Technical Assessment Report of the EPA and the National Highway Traffic Safety Administration for the midterm review of the US passenger vehicle greenhouse-gas emission regulation. It incorporates subsequent industry research and new modeling of advanced vehicle technologies, such as cylinder deactivation, high-compression Atkinson-cycle engines, lightweighting, and mild hybridization. On that expanded evidence base, it updates the EPA’s and NHTSA’s technology and cost assessments for 2025, and projects those cost and innovation trends out to 2030.
This analysis explores the technology implications of the shift to increased efficiency and lower CO2 emissions in 2025–2030. Three key findings:
- Advanced conventional power trains could dominate in the near term. Emerging technologies are pushing back the efficiency frontier of the internal combustion vehicles. Feasible and cost-effective efficiency gains 8% to 10% greater than those projected in the latest U.S. regulatory analysis could be realized by 2025. Technologies such as cylinder deactivation, high-compression Atkinson-cycle engines, lightweighting, and mild hybridization will allow internal combustion to dominate automakers’ strategies to comply with adopted 2025 standards.
- Previous estimates of the costs of compliance have been consistently overstated, and there is no evidence that that trend is about to change. Technology costs continue to fall. State-of-the-art engineering studies and technology developments reported by suppliers suggest that costs for lightweighting, direct injection, and cooled exhaust-gas recirculation will decline by hundreds of dollars, and electric vehicle costs will drop by thousands of dollars per vehicle by 2025. Factoring in these trends and development supports the conclusion that compliance costs for the adopted 2025 standards will be 34% to 40% lower than projected in the latest U.S. midterm evaluation regulatory analysis.
- In terms of both technology potential and benefit-cost ratios, progress on LDV efficiency can continue at the same rate at least until to 2030. Standards that get progressively more stringent, at 4%–6% lower fuel use per mile annually from 2025 to 2030, can be achieved cost-effectively. Such standards would result in modest, gradual vehicle price increases through 2030, and with two to three times greater consumer fuel savings than costs. Such standards for 2030 could be achieved mostly with advanced combustion technology, while also spurring growth in the plug-in electric vehicle segment of the market to 13%–23% of the new vehicle fleet. That would shift the new vehicle fleet from 26 miles per gallon in 2016 up to 42–46 miles per gallon by 2030.
