Ford's Lightweight F-150 Can Save Americans How Much in Fuel Costs!?!http://www.fool.com/investing/general/2014/01/19/fords-lightweight-f-150-can-save-americans-how-muc.aspx Maxx Chatsko
January 19, 2014
Remember that time when tough new Corporate Average Fuel Economy, or CAFE, standards ran big trucks out of the auto market? Me neither.
That was a concern when the U.S. Environmental Protection Agency issued the new standards in summer 2012, however. Many derided the ambitious targets, which call for the average automaker's fleet to achieve 54.5 miles per gallon by 2025, as unrealistic or impossible to meet. After the 2014 North American International Auto Show, you have to wonder if executives and engineers at Ford (NYSE: F) were laughing to themselves as they developed the lightweight 2015 Ford F-150.
Among other enhancements, such as 360 degree-view cameras and LED box lights, the latest F150 will sport a military-grade aluminum body to drop its curb weight by 500-700 pounds. It is the first pickup truck to feature an exclusively aluminum design. Dropping a few pant sizes alone would lead to better fuel economy, but the lower weight also allows Ford to swap out its familiar 6.2-liter V8 for a smaller, more efficient 3.5-liter EcoBoost V6 engine without sacrificing much power.
Aluminum designs are trending throughout the industry -- and they can deliver spectacular improvements in efficiency and fuel economy -- but the new Ford F-150 just cranked up the heat on the competition when it comes to meeting the new CAFE standards. Let's take a look at how the truck could decrease American fuel consumption and take a peek at next-generation auto designs being pursued by Ford, General Motors (NYSE: GM), and Magna International (NYSE: MGA).
The only CAFE that makes you lose weight
How can the 2015 F-150 do its part? The EPA states that each 100 pounds of weight in your car reduces fuel economy by 1%-2%, which means the new truck line will gain an extra 1-3 mpg, depending on model (see below). That equates to a maximum increase of more than 20%! Meanwhile, the option to include a 3.5-liter V6 or 2.7-liter V6 EcoBoost engine over the 5-liter V8 or 3.5-liter V6 would lead to further gains.
While EcoBoost engines can lead to a 20% boost in fuel economy, the variety of buyer options for the pickup makes it difficult to quantify effectively. Additionally, we can assume the biggest advantages would be felt with the least efficient models and that some models, well, just shouldn't get an EcoBoost engine. Nonetheless, let's conservatively assume efficient engines double the advantages from dropping weight to settle at an overall average improvement in fuel economy of 2-6 mpg.
With that in mind, how does the improved efficiency stack up across the lineup?
What would that mean for your bank account? Assuming you drive 15,000 miles annually and gasoline costs $3.50 per gallon, each new model would save you about $175-$525 every year compared to 2014 models. That's an extra $875-$2,625 in your pocket over the first five years of ownership.
What does improving fuel economy for the nation's best-selling vehicle mean for American gasoline consumption? Assuming annual domestic sales reach 700,000 vehicles and owners achieve an average fuel economy of 21 mpg, or an average improvement of 4 mpg compared to the 2014 lineup, each annual batch of new F-150's would lower American gasoline consumption by more than 115 million gallons and save consumers nearly $500 million in fuel costs. That amounts to one-tenth of a percent of the entire country's fuel consumption -- from just one pickup series!
That's impressive, but we shouldn't assume the automaker or its peers are stopping at aluminum bodies.
What comes next?