Mpg or gpm?

A maxim in business says that you get what you measure. If that’s true, then the way we measure things becomes crucially important (which will hardly surprise Molluscovites, I’m sure), like, say, fuel efficiency. A recently published study from Duke University highlights the fallacy of mpg. Instead of measuring the number of miles we get per gallon, we should measure the number of gallons we need to travel a set distance. When you work out the numbers, you get some unexpected results. I considered the two upgrades proposed in the paper: From an SUV to a station wagon, and from an econobox to a hybrid. I used what my auto insurer considers a normal year of driving, 12,000 miles, and a fuel price of $4.50 per gallon.

Make and Model Mileage Gallons per 12,000 miles Savings from upgrade at $4.50 per gallon
Dodge Durango 15 mpg 800 gallons
Toyota Wagon 25 480 $1,440
Honda Civic 30 400
Toyota Prius 50 240 $720

Even though the upgrade from the SUV to the wagon only improves mileage by 10 mpg, it actually saves 320 gallons of fuel. Despite a 20 mpg improvement, the upgrade from the Civic to the Prius saves only 160 gallons per year.

The point of this analysis is not to say we shouldn’t all be driving high fuel efficiency cars, because we should, but it is to say that it’s far more important to get all those behemoths off the road than it is for all us latte-drinking, tree-hugging liberals to swap our Civic for hybrids, no matter how much we really, really want to. Getting SUV drivers into hybrid SUVs or smaller wagons will make a far bigger difference to the good earth. Which is why, even though I think it’s criminal that the price for raising CAFE standards was the jettisoning of tax breaks for solar power and wind power, Congress actually did something pretty meaningful. Raising the minimum mileage will have the heaviest impact on the worst offenders.

I also liked this new way of measuring because it finally explains why I’m having trouble calculating at what price of gas will the added cost of a new hybrid break even with a new Civic.  I keep getting numbers that seem too high ($7 a gallon, or even $8, depending on which assumptions I use. I hope to have a whole post on this in the future). Now I see why: the marginal improvement of the Prius from the Civic just isn’t that great, at least not at today’s prices. Over the course of 10 years, the savings would be worth $7,200. But if I had a Durango (which I don’t!), and I went to the Toyota Wagon, I’d save $14,400 at today’s gas prices.

Of course fuel efficiency isn’t everything. Slate’s Green Lantern column just did an excellent cradle-to-grave analysis of the energy costs of buying a used Civic versus buying a new Prius and figured out that it was still more energy efficient to buy the new Prius. Now if I can just find that $21,500 I buried out in the yard for a special occasion…

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8 Responses to Mpg or gpm?

  1. Eric says:

    12,000 mile/year ?!!!??!?! WTF?
    Wow. No wonder my insurance adjuster laughed when we asked if there was a rate for a car that gets driven 2000 miles per year average.

  2. kevin z says:

    Over the course of 10 years, the savings would be worth $7,200.

    But that the min. because you are assuming the price will not change from $4.50/gal. during that 10 yrs. If you modeled the gas price curve (i’m sure its done, too lazy to Google) and came up with an annual rate of change and then recalculated, the saving would be MUCH high I think.

  3. Greg says:

    I drove about 45000 miles in about 42 months, and I’ve always had a relatively short commute, so 12000 seems reasonable to me.

    If this study really has an impact, though, what it really verifies to me is that people can’t do algebra for themselves.

  4. Eric Wolff says:

    - Eric: Yeah, well, when you have reasonable public transportation, you can skip the driving a bit more, eh?

    - Kevin z: Of course you are correct that the curve will continue upward, but aren’t you at least a bit surprised that you don’t save more at these high gas prices? Two years ago Consumer Reports projected $5 a gallon gas for 2012, and it still wasn’t worth buying a Prius on strictly financial grounds. We can debate this more when I work out the rest of the math.

    - Greg: I’m not so sure that people can’t do algebra so much as they don’t.

  5. Eric says:

    Good point, but we don’t have good public transport at all. Stinks, in fact, but we live very close to work and play.

    I wish we had the public transport system of Germany or Japan. When I lived in Germany I didn’t own a car at all. Neither did my wife when she lived there (before we married). We took bus and train mostly. I only rented a car to go to Bavaria.

    Fortunately most of our activities are in easy walking distance (1-2 miles) and my work/school is in bike commuting distance (under 10 miles). I am fortunate that much of my work can be done at home (video & multimedia stuff). Spring through fall I bike to work/school as much as possible (7am classes are my nemesis)

    The only problem is that our situation is relatively unique.

  6. J.P. says:

    In the Netherlands I pay € 5,98 a gallon, the next car will be one which might not be available on the US market, a Daihatsu Cuore.

  7. Hao says:

    Hopefully solar-recharged hybrids will enter the market “soon”. For people who only drive ~12k miles/year in sunny areas (SoCal, for instance?), I would imagine one wouldn’t need to purchase fuel much at all, except for extended road trips and the like.

  8. Eric Wolff says:

    I am curious about these solar powered hybrids, but I haven’t had time recently to read up on them. Have solar cells become efficient enough to recharge bateries in a timely manner? could be agreat solution for SoCal. Though I think we already have the solution for everyone, the plug-in hybrid. 40 miles on the battery, everything else in hybrid mode. But how often do you exceed 40 miles a day?

    And of course, even better than that, is to live close to work, as Eric does. But alas, my office and Miriam’s office are too far apart for that to be an option.

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