Will the Ford F-150 and General Motors' Chevy Silverado Ever Meet The Nation's Ambitious Fuel Economy Targets?

The 2014 Chevy Silverado 1500. Source: General Motors.

The latest revision of the Corporate Average Fuel Economy, or CAFE, standards calls for passenger vehicles and light-duty trucks to achieve an average efficiency of 54.5 miles per gallon by 2025. Larger trucks, such as the F-150 from Ford Motor Company (NYSE: F  ) and Chevy Silverado from General Motors Company (NYSE: GM  ) , will be required to achieve a CAFE rating of 30 mpg. While significantly lower than the standard mandated for smaller vehicles, the targets are no less ambitious for automakers. How likely is it that Ford and General Motors meet the ambitious goals?

What you see isn't what you get

It may seem as if Ford and General Motors have a long way to go, but the new CAFE standards are actually quite deceiving. Why? Well, the CAFE rating for each vehicle is determined by driving a vehicle in pristine conditions on a giant treadmill called a dynamometer. The unadulterated results of that test are what gets recorded as the CAFE rating. While the tests were intended to mimic real-world driving conditions, the U.S. Environmental Protection Agency had to intervene when consumers complained of large discrepancies between the advertised fuel economy and what they were actually achieving on the road. 

As it turns out, the fuel economy displayed on the EPA window sticker of a new car is determined from five different tests that attempt to account for highway and city driving with high speeds, varying temperatures, and even the use of air-conditioning (thus the term "combined" fuel economy). That means the 54.5 mpg CAFE standard for 2025 is roughly equivalent to an EPA window sticker rating of just 36 mpg. Same car, same real-world fuel economy, two different testing standards to confuse the heck out of consumers. By 2025 some cars will probably reach 54.5 mpg in real-world driving conditions, but consumers can expect closer to 36 mpg for the average vehicle, which is the target automakers need to achieve. Keep in mind that the goal is no less impressive. 

An example of an EPA window sticker. Source: FuelEconomy.gov

Despite the confusing reporting system, regulators are hesitant to scrap the CAFE ratings for the more realistic EPA ratings because they don't want it to appear as though the nation's fuel economy ratings are plummeting or not achieving their original goals. Nonetheless, the Ford F-150 and Chevy Silverado from General Motors won't be required to achieve 30 mpg in real-world conditions. Instead, the EPA window sticker will likely be closer to a combined rating of 23 mpg. Is that attainable?

Where they stand today

The U.S. Department of Energy website maintains combined fuel economy ratings for all vehicles, which makes our job a bit easier. For simplicity, we'll use the base model from both Ford and General Motors. According to DOE records, a 2014 Chevy Silverado 1500 with 2WD and a 5.3 L EcoTec3 engine boasts a combined EPA fuel economy of 19 mpg. Meanwhile, a 2014 Ford F-150 with 2WD and a 3.5 L EcoBoost engine sports a combined EPA fuel economy of 18 mpg.

Foolish bottom line

As you can see, both Ford and General Motors are relatively close to reaching the 2025 target right now with their base models. It's important to note that the 2015 model year F-150 features a new aluminum body, which will significantly improve fuel economy. Similar redesigns and innovations are in the works for future General Motors autos and Ford will surely continue to build upon its success, but neither company is currently listed for 2015 models on the DOE website. While I can't say if Ford or General Motors will reach the ambitious CAFE standards for 2025 across their heavy duty truck fleet, both appear to be on the right track.

Increasing efficiency will pay enormous dividends
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Read/Post Comments (8) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 19, 2014, at 8:07 AM, Soakee wrote:

    Will the Ford F-150 and General Motors' Chevy Silverado Ever Meet The Nation's Ambitious Fuel Economy Targets?

    No, which is why these ridiculous fuel economy standards (CAFE) need to be repealed and eliminated. Allow the market price of fuel to be the sole determinant in what automakers produce and purchasers purchase. Requiring fuel economy standards is nothing more than socialism.

  • Report this Comment On May 19, 2014, at 8:58 AM, imDanielle2 wrote:

    If CAFE standards were never created... You would still be driving cars that only get 9 MPG ..

  • Report this Comment On May 19, 2014, at 9:29 AM, helspont wrote:

    Actually this doesnt stop auto makers from making cars that get 9 mpg , all it does is add an extra TAX onto the car depending on the amount of mpg its under the standard rating. from what I have seen on pricing guides for the this tax it can add about 2-5K extra bucks onto the tag price of a car. thus another reason why car prices have jumped over the past few years because many cars still do not meet the min standard placed.

  • Report this Comment On May 19, 2014, at 9:44 AM, raggedpoke wrote:

    Between 1970 and 2000, auto-SUV fuel economy increased on average at 1.5 % per year. If other things were equal, this would have decreased fuel consumption by 1.5% per year. But instead of a decrease, fuel consumption increased by 1.5% per year (on average) due to increased travel.

  • Report this Comment On May 19, 2014, at 10:59 AM, Soakee wrote:

    "If CAFE standards were never created... You would still be driving cars that only get 9 MPG .. "

    Pure theory. The market price of fuel (like the market price of gold, silver, fish, etc.) would dictate what people CHOOSE to buy. Take some economics classes, and think about it.

  • Report this Comment On May 19, 2014, at 11:16 AM, Soakee wrote:

    What happended during the Arab oil embargo of 1973? People demanded higher-mileage vehicles because the price of fuel got too high. What happened in 2008 when the price of fuel hit $4.00/gallon? People demanded higher-mileage vehicles. It's basic economics. Let the market "pull" the manufacturers into making higher-mileage vehicles, the government has no business in "pushing" higher mileage onto the manufacturers.

  • Report this Comment On May 19, 2014, at 11:56 AM, snommis69 wrote:

    These rating mean little. It would be more productive to instruct drivers on how to drive efficiently. I drive an '07 Avalanche, and regularly get about 21/22 MPG on the highway. How? Simple. Don't drive like a clown. Don't stomp the gas off the line. It's pretty easy, really.

    I have a friend who used to brag about the mileage he got in his Toyota... until we actually calculated his MPG. His bad driving habits forced his EPA rated 40 hwy down to the mid 20s. That number on the window means squat if you think you're a race car driver.

  • Report this Comment On May 19, 2014, at 2:27 PM, debug013 wrote:

    What really hurts my fuel economy on my F150 is the city driving. On average I get 11 mpg in city but on the highway I get anywhere from 18-22 depending on my speed and how much wind there is. One thing that would really help mpg is to do away with alcohol in the fuel. For a while there was a station that carried 100% gasoline no alcohol and after a few tanks to eliminate the alcohol in my trucks fuel system I got 22- 24 mpg on the highway and once on a fluke I got 26 mpg and that's from a 2010 F150 Supercrew 4X4 with V8 and 3.73 rear gears. All Alcohol in fuel does is drive up the cost of corn which directly impacts the cost of feed grain for livestock and the cost of food in your home. Some the use of alcohol in fuel helps the environment but the gain from cleaner burning fuel is negated by the fact that you have to use about 10% more fuel for the same number of miles driven. Plus alcohol in fuel puts excess wear on internal engine parts.

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