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Updated 4:00 PM January 24, 2007




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UMTRI survey: Gallon of gas will hit $5 by 2020

Both fuel prices and fuel economy standards will rise dramatically in the next decade, according to a new survey conducted by the U-M Transportation Research Institute's (UMTRI) Automotive Analysis Division.

The survey of automobile manufacturers, suppliers and other experts predicts that gas prices will average slightly more than $4 a gallon by 2015 and just over $5 a gallon by 2020.

Corporate Average Fuel Economy (CAFE) for cars is expected to increase from today's 27.5 miles per gallon to 33 mpg in 2015 and 38 mpg in 2020—a 38 percent jump. For trucks, CAFE will rise from the current 21.6 mpg to 27 mpg in 2015 and 31 mpg in 2020—a 44 percent increase.

"Our research reveals surprising agreement among all stakeholders in the automobile industry that fuel prices are on a steep upward trajectory," says UMTRI researcher Bruce Belzowski. "There is also consensus that fuel economy and emissions regulations will not just continue but substantially increase over the next decade."

More than 100 powertrain experts from across North America responded to UMTRI's online survey, which sought to examine strategic planning factors; alternative powertrain technologies; company barriers to the introduction of new powertrain technology; sourcing issues; powertrain and drivetrain technologies; and human resource issues through 2020. This continuing study also will examine the opinions and attitudes of powertrain experts in Asia and Europe over the coming months.

The experts report that alternative-fueled engines will make up a larger part of the North American fleet in 2015 (42 percent) and 2020 (55 percent). Of the five alternative powerplants (electric, fuel cell, homogeneous charge compression ignition, advanced diesel and hybrid), the majority will be based on advanced diesel and hybrid technologies, they say.

What is unclear is whether these technologies and more sophisticated spark-ignited engines will be sufficient to meet the increased CAFE requirements the experts predict for 2015 and 2020, says Walter McManus, director of UMTRI's Automotive Analysis Division.

"This survey shows that though manufacturers are developing alternative powertrains, they may not be working fast enough to meet the challenges imposed on them by government regulations or by potential dramatic increases of fuel prices," McManus says. "The auto industry may be operating under a false—and potentially fatal—assumption that fuel economy is not a high priority."

The Powertrain Strategies for the 21st Century project is part of UMTRI's Future Powertrain Program, which provides companies with intelligence about future directions in the powertrain strategies of manufacturers and suppliers, consumer views of alternative powertrains, and future directions in mobility and sustainability. For more information contact Belzowski at or 936-2704.

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