Technical report, 55 pages with 6 tables, 18 figures, appendix and 112 references.Improving the fuel efficiency of automobiles (cars and light trucks) is an important means of addressing transportation oil demand and greenhouse gas (GHG) emissions. This report examines the efficiency attainable through evolutionary changes in U.S. automobiles that have fueling characteristics as well as performance, size and other attributes similar to those of today. The analysis combines results from previous engineering studies of powertrain efficiency and load reduction with new examinations of rates of technology change and cost reduction. It introduces the concept of "efficiency-compatible" vehicle design for product planning strategies that address the trade-off between fuel economy and other vehicle features. A logistical model is applied to characterize historical rates of technology adoption and identify feasible adoption rates for new technologies such as hybrid drive. Costs are modeled as a quadratic function of the reduction in vehicle energy use rate, with parameters reflecting technological progress that results in declining costs over time. The conclusion is that a tripling of new fleet fuel efficiency is an ambitious but defensible horizon for 2035. That would improve average on-road fuel economy from a baseline of 20 mpg in 2005 to 60 mpg by 2035. The projected per vehicle retail-equivalent cost averages $4,200 and the discounted lifetime benefit is $8,800 (2010$, assuming an average motor fuel shadow price of $2.88/gal). Although the analysis is technologically neutral, reaching this efficiency level is likely to entail high adoption of hybrid drive as well as advanced combustion engines and steady incremental progress in mass reduction and streamlining. Most importantly, it will require market prioritization of vehicle efficiency improvement over further improvement of other features, particularly acceleration performance, that trade off against it
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