Today’s Baby Steps in MPG Mean Giant Savings for Commercial Fleets

MPG-baby-stepsFar too much attention is paid to extreme MPG goals. While we’d all like to reduce our fuel consumption, many of us do not understand the inverse relationship between MPG and actual gallons of fuel used. Mathematically, as MPG increases, fuel use decreases. OK, we get that, but what about the scale of these changes? As the relationship is not linear, even the brightest minds have trouble with the concept. To check your own instincts, answer the following question. What saves more fuel: improving a vehicle’s fuel economy from 10 MPG to 12.5 MPG, or improving a vehicle’s fuel economy from 50 MPG to 100 MPG?

The surprising answer to this question (see the chart below) should shape our national debate around where to focus our efforts and how much money we should spend in the process. While we often hear about lofty MPG goals for the passenger fleet (see this link to President Obama’s Fuel Economy Standards), we can make a huge difference with only modest MPG improvements to the lowest MPG vehicles, typically found in the commercial vehicle fleet. See this Consumer Reports article for another great example.MPG ImprovementCommercial vehicles are inefficient and drive many times the average mileage of passenger vehicles. To be fair, the passenger fleet is much larger than the commercial fleet and hence consumes much more fuel in aggregate, but much of the focus on improving fuel economy within the passenger fleet is dedicated to radical (read: electric vehicle) solutions, which are costly and will require huge infrastructure development and investment. As a result, the benefits from EV technology won’t be seen at scale for decades. Incremental retrofit and upfit solutions which achieve about 25% MPG improvement are just becoming available for commercial use today – at a fraction of the cost.

Consider a commercial van which makes daily deliveries and service calls around the environs of a large city. It drives upwards of 25,000 miles a year, gets about 11.5 MPG in city driving, and consumes over 2,000 gallons of fuel a year. At current fuel prices, its fuel bill is approximately $7,000 each year. Further, due to its need to carry substantial cargo loads, its efficiency cannot be improved by downsizing. Shaving 20% off of that vehicle’s fuel consumption means eliminating over 400 gallons of gas from the company income statement and from its carbon footprint every year. That is like taking a passenger car off the road.

The nation’s commercial fleets belong to businesses which make decisions if and only if these decisions will improve their bottom line. These businesses operate the workhorses of the commercial fleet – from Class 2 upward. To date, government policy-making directed at these vehicles has been limited (as has OEM investment in the class), but they deserve our attention; they are the ultimate gas guzzlers.

We should not wait for the proverbial flying car when we can modify our existing fleet to make it more fuel efficient right now. The next 2 decades should be about cost-effective incremental change in the commercial sector, or else we will experience very little change at all. That would be a missed opportunity.