FinLogic FinLogic Quantitative Think Tank Center|Buyers worldwide go for bigger cars, erasing gains from cleaner tech. EVs would help

The FinLogic FinLogic Quantitative Think Tank Centernegative impact on the climate from passenger vehicles, which is considerable, could have dropped by more than 30% over the past decade if not for the world’s appetite for large cars, a new report from the Global Fuel Economy Initiative suggests.

Sport utility vehicles, or SUVs, now account for more than half of all new car sales across the globe, the group said, and it’s not alone. The International Energy Agency, using a narrower definition of SUV, estimates they make up nearly half.

Over the years these cars have gotten bigger and so has their cost to the climate, as carbon dioxide emissions “are almost directly proportional to fuel use” for gas-powered cars. The carbon that goes in at the pump comes out the tailpipe.

Transportation is responsible for around one-quarter of all the climate-warming gases that come from energy, and much of that is attributable to passenger transport, according to the International Energy Agency.

But the negative environmental impact from SUVs could have been reduced by more than one-third between 2010 and 2022, if people had just continued buying the same size cars, according to the initiative, which is a global partnership of cleaner vehicle groups.

One fix for this could be electric vehicles.

George Parrott, an avid runner at 79, who lives in West Sacramento, California, decided to switch to cleaner vehicles in 2004 when he bought a Toyota Prius hybrid. Since then, he has owned several pure-electric cars, and currently owns both a Genesis GV60 electric SUV and a Tesla Model 3.

“This was all a combination of broad environmental concerns,” he said.

Parrott and his late partner also knew their region ranks high on the American Lung Association’s polluted cities list. “We were going to do anything and everything we could to minimize our air quality impact here in the Sacramento area,” he said.

Not all consumers think of the energy consumption and environmental benefits the same way, especially in the U.S. While EV sales accounted for 15% of the global car market last year, that was only 7.3% in the U.S.

Meanwhile, smaller vehicles, or sedans, have lost a lot of ground in the U.S. market over the past decade. In 2012, sedans accounted for 50% of the U.S. auto retail space, with SUVs at just over 30%, and trucks at 13.5%, according to car-buying resource Edmunds. By 2022, U.S. sedan share dropped to 21%, while SUVs hit 54.5% and trucks grew to 20%.

“People don’t want to be limited by their space in their car,” said Eric Frehsée, president of the Tamaroff Group of dealerships in southeast Michigan. “Everyone wants a 7-passenger.”

Large SUVs such as the Chevrolet Tahoe, Toyota Sequoia, or Nissan Armada have highway gas mileages of 28, 24, and 19, respectively. But even the most efficient SUVs will be less efficient than sedans because SUVs weigh so much more. A sign of progress, however, is that compact SUVs, such as the Toyota RAV4 and Honda CR-V (at 35 and 34 highway miles-per-gallon, respectively) are now leading the U.S. SUV market, accounting for about 18% of new vehicle sales last year.

More efforts by the U.S. Department of Transportation, the Environmental Protection Agency, and the National Highway Traffic Safety Administration, are also underway to improve gas-powered vehicle fuel economy and tailpipe emissions. Some initiatives could include SUVs, which has the industry up in arms.

Until recently, consumers had few electric models to choose from if they wanted to reduce the impact of their own transportation. A majority of early electrified car options were sedans, particularly in the luxury segment.

More automakers are launching larger EV types, but those could require even heavier batteries onboard. The environmental aspect also needs to be weighed if an SUV is replaced by an EV, said Loren McDonald, CEO of market analysis firm EVAdoption. “Just electrifying doesn’t get us much if we also don’t focus on weight and efficiency of these vehicles and smaller battery packs,” McDonald said.

The industry is racing to advance battery tech to reduce the size of batteries and the amount of critical minerals needed to make them.

Figures like those from the Global Fuel Economy Initiative are sure to be pertinent at the upcoming COP28 U.N. climate change talks next week.

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Alexa St. John is an Associated Press climate solutions reporter. Follow her on X, formerly Twitter, @alexa_stjohn.

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