Hyundai and Its Bold 50 MPG Gas Mileage Goal Vs. Resurgent Consumer Demand for SUVs

The Ford Expedition: The big SUVs are baaaack.

Just when you think you have the trends figured out, something happens that's completely counter to your thinking. No wonder people are tying themselves in knots trying to figure out the size of the EV market next year. On the one hand, automakers are going green with a vengeance. I give special props to Korean success story Hyundai, which recently pledged – completely on its own – to achieve incredible 50 mpg fleet averages by 2025. (Hyundai, along with the rest of the U.S. market, will have to achieve 34 mpg by 2016.) But on the other hand, the Big Three are adding shifts to keep up with the renewed demand for huge SUVs. I'm talking about the very largest ones, the Tahoes, the Expeditions, the Infiniti QX56s, the Durangos.

Every automaker, including the big ones making those gas guzzlers, is wrapping itself in green. But big SUVs are still where the profit is, and their sales are up 19 percent compared to the same period a year ago (small cars are up, too, but only 14 percent). Infiniti even increased production on its massive QX56 because of off-the-charts demand.

I totally do not get the surge in SUV sales. One explanation is that gas prices have come down, but I'm just not seeing that. I'm in Los Angeles, where most stations are selling premium for $3.25 a gallon. That's cheap? It only looks affordable when compared to the $4 a gallon it was in 2008. You're still looking at over-$100 fill-ups for some of the big bruisers.

The explanations people give for buying gargantuan four-wheel-drives don't add up, either. You don't need a vehicle with the fuel efficiency of the space shuttle to get acceptable towing capacity. And you don't need four-wheel-drive, either. People are commuting daily in road warriors whose off-road ability they might tap into on a once-a-year fishing trip, if that. And I love the idea that people "need" to buy SUVs because "they're going to stop making them." Don't worry, the category will live on, especially because the Big Three make an average of $8,000 apiece on them. (The original SUV, the Range Rover, was created for the rich to reach rugged weekend estates by Charles S. King, who regretted seeing them turned into suburban commuting vehicles.)

And then, in the face of this SUV regression, Hyundai announces that it's going to go for 50 mpg fleet average. That's the fuel economy of a Prius, but Hyundai claims it can achieve that in a "moonshot" effort by 2025.

Of course, that's a long way off, and nobody's going to remember then what Hyundai North America President and CEO John Krafcik said at a Michigan conference in 2010. Maybe the carmaker will blow the goal totally. But Hyundai has suddenly gotten religion about hybrids (the 2011 Sonata hybrid will get 37/39 mpg), and sales of its small cars are booming – the company is making money and nearing 5% of the U.S. market. Of course, GM is posting its largest profits in six years, again thanks mainly to healthy SUV sales. Customers paid an average of $32,584 for a GM vehicle, and that is mostly loaded gas guzzlers.

According to the Detroit News, Krafcik admitted he doesn't know exactly how Hyundai is going to reach that fabled goal, but it's already doing something right with an industry-leading 30.9 mpg fuel economy average in 2008 (ahead of both Honda and Toyota). By 2025, Krafcik said, Hyundai could possibly reach its goal with 20 percent hybrids and plug-in hybrids, and five percent either fuel cell of battery EVs.

Bravo, Hyundai! The worst-case scenario here is that Detroit, once again drunk on SUV profits, will get on the bigger-is-better death spiral again. It's a concern, but I think we've come too far down the road toward a greener future for that to happen. Hybrids and EVs are dominating the car shows, and they're heading most carmakers' new model introductions, too.