Thanks to a combination of rising gas prices, new government regulations, and a revitalized auto industry, the average fuel economy of American cars has risen by 2.9 MPG in since 2008. This fuel economy turnaround is good news for the country, and the auto industry, which for decades has been weary of selling a car on the merits of its gas mileage.

But consumers are voting with their wallets, and while EV sales are faltering, compact car sales are on the rise. This is thanks in large part to an auto industry that is no longer in a race to the bottom; you can now get some nicely-appointed compact cars for $20,000 or less, with ratings of around 40 MPG on the highway. This has led many consumers to choosing high-MPG compacts over other options.

The study, done by the University of Michigan Transportation Research Institute, found that the average fuel economy has been going up in a meaningful way the past four years. Notice the spike in July of 2009, followed by a huge dip? That was because of Cash for Clunkers, which saw new cars sold with an average fuel economy of more than 22.5 MPG, before dipping down to 21 MPG. But since then average fuel economy has been trending only upwards.

This has led the auto industry to placing a high priority on fuel economy with almost every car, including SUVs that were once notorious for their gas-guzzling ways. Even the seven-passenger Ford Explorer can be had with a turbocharged four-cylinder engine. This new generation of fuel efficient cars has helped the average fuel economy of American cars rise from 20.8 MPG to 23.9 MPG. That is a rise of about 15% in just four years.

It certainly is a positive trend, and one we hope will stick around.

Source: University of Michigan Transportation Research Institute