Small gains, widely distributed
On crude oil prices, 13-year-old cars, and why steady gains in fuel efficiency deserve more applause than they get
The price of crude oil has rocketed up by about 50% since the start of the year, due predominantly to geopolitical forces far beyond the reach of ordinary people. The future is uncertain, but there are highly plausible conditions under which the prices could stay high for years to come.
■ The problem for many households is that choices made about major purchases, like vehicles, often last for years to come. The average passenger car or truck on the road today is 12.8 years old. If that trend continues, then the average vehicle sold today will probably still be on the road in 2039.
■ Many of the major automakers have pressed hard on fully electric vehicles -- the race to catch up with Tesla has been evident, and it has produced some very impressive new models. But it’s also led to a lot of split lineups, with many manufacturers offering EVs, gas guzzlers, and little in between.
■ GM touts its status as the #2 EV seller in the US, but it doesn’t offer much between pure EV and combustion, while Stellantis nixed its plug-in hybrid family for 2026. The market seems to have been responding heavily to the availability, then the repeal, of EV tax credits.
■ Toyota, meanwhile, has long taken heat from environmental groups for offering less in the pure-EV market. But it claims that just shy of half its US sales are now “electrified” in some form. That’s resulted in a fleet-wide average fuel efficiency of 29 miles per gallon, partly the result of the largest five-year efficiency gain of any major manufacturer, according to the EPA.
■ It’s a compelling case study in the value of steady, widely-distributed improvement. It might have been flashier to roll out lots of all-electric vehicles, but when the highest-volume automaker makes a fleetwide improvement of a solid 12% in half a decade, that results in significant market-wide efficiency gains. Those would pay off in normal times, but they really pay off in the face of an oil price shock.
■ We ought to appreciate persistent, unglamorous improvements (especially when they are widely distributed) just as much as we applaud splashy breakthroughs that often don’t penetrate quite as far. Modest but wide-reaching innovations can end up delivering big results.
