Recent Trends in Factors Influencing Automotive Fuel Demand

This paper assesses three factors affecting projections of passenger car fuel consumption: 1) "fuel-switching" by consumers; 2) new car fuel economy trends through 1995; and 3) the on-road fuel economy characteristics of older cars. Surveys of monthly household motor fuel purchases in 1978-1981 are used to demonstrate a significant correlation between vehicle age and trends in "misfueling". Projections of new car fuel economy are derived using a technology-oriented model previously developed for the U.S. Department of Energy (DOE). The forecasts are sensitive to fuel prices, consumer discount rates, and technology payback periods. The paper discusses the effects of changes in vehicle use intensity and odometer on the in-use fuel economy of older cars. Information also is presented on the in-use fuel economy of pre-MY1975 vehicles. The paper concludes with an assessment of the effects of these fuel economy and fuel switching trends on future automobile fuel demand.