Proposed Rule2023-16515
Corporate Average Fuel Economy Standards for Passenger Cars and Light Trucks for Model Years 2027-2032 and Fuel Efficiency Standards for Heavy-Duty Pickup Trucks and Vans for Model Years 2030-2035
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 17, 2023
Issuing agencies
Transportation DepartmentNational Highway Traffic Safety Administration
Abstract
NHTSA, on behalf of the Department of Transportation (DOT), is proposing new fuel economy standards for passenger cars and light trucks and fuel efficiency standards for model years (MYs) 2027-31 that increase at a rate of 2 percent per year for passenger cars and 4 percent per year for light trucks, and new fuel efficiency standards for heavy-duty pickup trucks and vans (HDPUVs) for MYs 2030-2035 that increase at a rate of 10 percent per year. NHTSA is also setting forth proposed augural standards for MY 2032 passenger cars and light trucks, that would increase at 2 percent and 4 percent year over year, respectively, as compared to the prior year's standards. NHTSA currently projects that the proposed standards would require an industry fleet-wide average for passenger cars and light trucks of roughly 58 miles per gallon (mpg) in MY 2032 and an industry fleet-wide average for HDPUVs of roughly 2.6 gallons per 100 miles in MY 2038. NHTSA further projects that the proposed standards would reduce average fuel outlays over the lifetimes of passenger cars and light trucks by $1,043 and of HDPUVs by $439. These proposed standards are directly responsive to the agency's statutory mandate to improve energy conservation and reduce the nation's energy dependence on foreign sources.
Full Text
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[Federal Register Volume 88, Number 158 (Thursday, August 17, 2023)]
[Proposed Rules]
[Pages 56128-56390]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-16515]
[[Page 56127]]
Vol. 88
Thursday,
No. 158
August 17, 2023
Part II
Department of Transportation
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National Highway Traffic Safety Administration
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49 CFR Parts 531, 533, 535, and 537
Corporate Average Fuel Economy Standards for Passenger Cars and Light
Trucks for Model Years 2027-2032 and Fuel Efficiency Standards for
Heavy-Duty Pickup Trucks and Vans for Model Years 2030-2035; Proposed
Rule
Federal Register / Vol. 88, No. 158 / Thursday, August 17, 2023 /
Proposed Rules
[[Page 56128]]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Parts 531, 533, 535, and 537
[NHTSA-2023-0022]
RIN 2127-AM55
Corporate Average Fuel Economy Standards for Passenger Cars and
Light Trucks for Model Years 2027-2032 and Fuel Efficiency Standards
for Heavy-Duty Pickup Trucks and Vans for Model Years 2030-2035
AGENCY: National Highway Traffic Safety Administration (NHTSA).
ACTION: Notice of proposed rulemaking.
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SUMMARY: NHTSA, on behalf of the Department of Transportation (DOT), is
proposing new fuel economy standards for passenger cars and light
trucks and fuel efficiency standards for model years (MYs) 2027-31 that
increase at a rate of 2 percent per year for passenger cars and 4
percent per year for light trucks, and new fuel efficiency standards
for heavy-duty pickup trucks and vans (HDPUVs) for MYs 2030-2035 that
increase at a rate of 10 percent per year. NHTSA is also setting forth
proposed augural standards for MY 2032 passenger cars and light trucks,
that would increase at 2 percent and 4 percent year over year,
respectively, as compared to the prior year's standards. NHTSA
currently projects that the proposed standards would require an
industry fleet-wide average for passenger cars and light trucks of
roughly 58 miles per gallon (mpg) in MY 2032 and an industry fleet-wide
average for HDPUVs of roughly 2.6 gallons per 100 miles in MY 2038.
NHTSA further projects that the proposed standards would reduce average
fuel outlays over the lifetimes of passenger cars and light trucks by
$1,043 and of HDPUVs by $439. These proposed standards are directly
responsive to the agency's statutory mandate to improve energy
conservation and reduce the nation's energy dependence on foreign
sources.
DATES:
Comments: Comments are requested on or before October 16, 2023. See
the SUPPLEMENTARY INFORMATION section on ``Public Participation,''
below, for more information about written comments.
Public Hearings: NHTSA will hold one virtual public hearing during
the public comment period. The agency will announce the specific date
and web address for the hearing in a supplemental Federal Register
notice. The agency will accept oral and written comments on the
rulemaking documents and will also accept comments on the Draft
Environmental Impact Statement (DEIS) at this hearing. The hearing will
start at 9 a.m. Eastern time and continue until everyone has had a
chance to speak. See the SUPPLEMENTARY INFORMATION section on ``Public
Participation,'' below, for more information about the public hearing.
ADDRESSES: You may send comments, identified by Docket No. NHTSA-2023-
0022, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Fax: (202) 493-2251.
<bullet> Mail: Docket Management Facility, M-30, U.S. Department of
Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
<bullet> Hand Delivery: Docket Management Facility, M-30, U.S.
Department of Transportation, West Building, Ground Floor, Rm. W12-140,
1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 4
p.m. Eastern time, Monday through Friday, except Federal holidays.
Instructions: All submissions received must include the agency name
and docket number or Regulatory Information Number (RIN) for this
rulemaking. All comments received will be posted without change to
<a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any personal information
provided. For detailed instructions on sending comments and additional
information on the rulemaking process, see the ``Public Participation''
heading of the SUPPLEMENTARY INFORMATION section of this document.
Docket: For access to the dockets or to read background documents
or comments received, please visit <a href="https://www.regulations.gov">https://www.regulations.gov</a>, and/or
Docket Management Facility, M-30, U.S. Department of Transportation,
West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue SE,
Washington, DC 20590. The Docket Management Facility is open between 9
a.m. and 4 p.m. Eastern time, Monday through Friday, except Federal
holidays.
FOR FURTHER INFORMATION CONTACT: For technical and policy issues,
Joseph Bayer, CAFE Program Division Chief, Office of Rulemaking,
National Highway Traffic Safety Administration, 1200 New Jersey Avenue
SE, Washington, DC 20590; email: <a href="/cdn-cgi/l/email-protection#640e0b1701140c4a06051d011624000b104a030b12"><span class="__cf_email__" data-cfemail="c7ada8b4a2b7afe9a5a6bea2b587a3a8b3e9a0a8b1">[email protected]</span></a>. For legal
issues, Rebecca Schade, NHTSA Office of Chief Counsel, National Highway
Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington,
DC 20590; email: <a href="/cdn-cgi/l/email-protection#73011611161010125d00101b12171633171c075d141c05"><span class="__cf_email__" data-cfemail="0c7e696e696f6f6d227f6f646d68694c686378226b637a">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Acronyms and Abbreviations
------------------------------------------------------------------------
Abbreviation Term
------------------------------------------------------------------------
AAA............................... American Automobile Association.
AALA.............................. American Automotive Labeling Act.
AC................................ Air Conditioning.
ACC............................... Advanced Clean Cars.
ACC I............................. Advanced Clean Cars I.
ACC II............................ Advanced Clean Cars II.
ACME.............................. Adaptive Cylinder Management Engine.
ACT............................... Advanced Clean Trucks.
ADEAC............................. Advanced cylinder deactivation.
ADEACD............................ advanced cylinder deactivation on a
dual overhead camshaft engine.
ADEACS............................ advanced cylinder deactivation on a
single overhead camshaft engine.
ADSL.............................. Advanced diesel engine.
AEO............................... Annual Energy Outlook.
AER............................... All-Electric Range.
AERO.............................. Aerodynamic improvements.
AFV............................... Alternative fuel vehicle.
AHSS.............................. advanced high strength steel.
AIS............................... Abbreviated Injury Scale.
AMPC.............................. Advanced Manufacturing Production
Tax Credit.
AMTL.............................. Advanced Mobility Technology
Laboratory.
[[Page 56129]]
ANL............................... Argonne National Laboratory.
ANSI.............................. American National Standards
Institute.
APA............................... Administrative Procedure Act.
AT................................ traditional automatic transmissions.
AWD............................... All-Wheel Drive.
BEA............................... Bureau of Economic Analysis.
BEV............................... Battery electric vehicle.
BGEPA............................. Bald and Golden Eagle Protection
Act.
BISG.............................. Belt Mounted integrated starter/
generator.
BMEP.............................. Brake Mean Effective Pressure.
BNEF.............................. Bloomberg New Energy Finance.
BPT............................... Benefit-Per-Ton.
BSFC.............................. Brake-Specific Fuel Consumption.
BTW............................... Brake and Tire Wear.
CAA............................... Clean Air Act.
CAFE.............................. Corporate Average Fuel Economy.
CARB.............................. California Air Resources Board.
CBI............................... Confidential Business Information.
CEGR.............................. Cooled Exhaust Gas Recirculation.
CEQ............................... Council on Environmental Quality.
CFR............................... Code of Federal Regulations.
CH4............................... Methane.
CI................................ Compression Ignition.
CNG............................... Compressed Natural Gas.
CO................................ Carbon Monoxide.
CO2............................... Carbon Dioxide.
COVID............................. Coronavirus disease of 2019.
CPM............................... Cost Per Mile.
CR................................ Compression Ratio.
CRSS.............................. Crash Report Sampling System.
CVC............................... Clean Vehicle Credit.
CVT............................... Continuously Variable Transmissions.
CY................................ Calendar year.
CZMA.............................. Coastal Zone Management Act.
DCT............................... Dual Clutch Transmissions.
DD................................ Direct Drive.
DEAC.............................. Cylinder Deactivation.
DEIS.............................. Draft Environmental Impact
Statement.
DFS............................... Dynamic Fleet Share.
DMC............................... Direct Manufacturing Cost.
DOE............................... Department of Energy.
DOHC.............................. Dual Overhead Camshaft.
DOI............................... Department of the Interior.
DOT............................... Department of Transportation.
DPM............................... Diesel Particulate Matter.
DR................................ Discount Rate.
DSLI.............................. Advanced diesel engine with
improvements.
DSLIAD............................ Advanced diesel engine with
improvements and advanced cylinder
deactivation.
EETT.............................. Electrical and Electronics Technical
Team.
EF................................ Emission Factor.
EFR............................... Engine Friction Reduction.
EIA............................... U.S. Energy Information
Administration.
EIS............................... Environmental Impact Statement.
EISA.............................. Energy Independence and Security
Act.
EJ................................ Environmental Justice.
E.O............................... Executive Order.
EPA............................... U.S. Environmental Protection
Agency.
EPCA.............................. Energy Policy and Conservation Act.
EPS............................... Electric Power Steering.
EFR............................... Engine Friction Reduction.
ESA............................... Endangered Species Act.
ETDS.............................. Electric Traction Drive System.
EV................................ Electric Vehicle.
FCC............................... Fuel Consumption Credits.
FCEV.............................. Fuel Cell Electric Vehicle.
FCIV.............................. Fuel Consumption Improvement Value.
FCV............................... Fuel Cell Vehicle.
FE................................ Fuel Efficiency.
FHWA.............................. Federal Highway Administration.
FIP............................... Federal Implementation Plan.
FMVSS............................. Federal Motor Vehicle Safety
Standards.
FMY............................... Final Model Year.
FRIA.............................. Final Regulatory Impact Analysis.
FTP............................... Federal Test Procedure.
[[Page 56130]]
FWCA.............................. Fish and Wildlife Conservation Act.
FWD............................... Front-Wheel Drive.
FWS............................... U.S. Fish and Wildlife Service.
GCWR.............................. Gross Combined Weight Rating.
GDP............................... Gross Domestic Product.
GES............................... General Estimates System.
GGE............................... Gasoline Gallon Equivalents.
GHG............................... Greenhouse Gas.
GM................................ General Motors.
gpm............................... gallons per mile.
GREET............................. Greenhouse gases, Regulated
Emissions, and Energy use in
Transportation.
GVWR.............................. Gross Vehicle Weight Rating.
GWh............................... Gigawatt hours.
HD................................ Heavy-Duty.
HDPUV............................. Heavy-Duty Pickups and Vans.
HEG............................... High Efficiency Gearbox.
HEV............................... Hybrid Electric Vehicle.
HFET.............................. Highway Fuel Economy Test.
HVAC.............................. Heating, Ventilation, and Air
Conditioning.
IACC.............................. improved accessories.
IAV............................... IAV Automotive Engineering, Inc.
ICCT.............................. The International Council on Clean
Transportation.
ICE............................... Internal Combustion Engine.
IIHS.............................. Insurance Institute for Highway
Safety.
IPCC.............................. Intergovernmental Panel on Climate
Change.
IQR............................... Interquartile Range.
IRA............................... Inflation Reduction Act.
IWG............................... Interagency Working Group.
LD................................ Light-Duty.
LDB............................... Low Drag Brakes.
LDV............................... Light-Duty Vehicle.
LE................................ Learning Effects.
LEV............................... Low-Emission Vehicle.
LFP............................... Lithium Iron Phosphate.
LIB............................... Lithium-Ion Batteries.
LIVC.............................. Late Intake Valve Closing.
LT................................ Light truck.
MAX............................... maximum values.
MBTA.............................. Migratory Bird Treaty Act.
MD................................ Medium-Duty.
MDHD.............................. Medium-Duty Heavy-Duty.
MDPCS............................. Minimum Domestic Passenger Car
Standard.
MDPV.............................. Medium-Duty Passenger Vehicle.
MIN............................... minimum values.
MMTCO2............................ Million Metric Tons of Carbon
Dioxide.
MMY............................... Mid-Model Year.
MOU............................... Memorandum of Understanding.
MOVES............................. Motor Vehicle Emission Simulator.
MOVES3............................ latest version of MOVES.
MPG............................... Miles Per Gallon.
mph............................... Miles Per Hour.
MR................................ Mass Reduction.
MSRP.............................. Manufacturer Suggested Retail Price.
MY................................ Model Year.
NAAQS............................. National Ambient Air Quality
Standards.
NADA.............................. National Automotive Dealers
Association.
NAICS............................. North American Industry
Classification System.
NAS............................... National Academy of Sciences.
NCA............................... Nickel Cobalt Aluminum.
NEMS.............................. National Energy Modeling System.
NEPA.............................. National Environmental Policy Act.
NESCCAF........................... Northeast States Center for a Clean
Air Future.
NHPA.............................. National Historic Preservation Act.
NHTSA............................. National Highway Traffic Safety
Administration.
NMC............................... Nickel Manganese Cobalt.
NOX............................... Nitrogen Oxide.
NPRM.............................. Notice of Proposed Rulemaking.
NRC............................... National Research Council.
NREL.............................. National Renewable Energy
Laboratory.
NTTAA............................. National Technology Transfer and
Advancement Act.
NVH............................... Noise-Vibration-Harshness.
NVPP.............................. National Vehicle Population Profile.
OCR............................... Optical Character Recognition.
OEM............................... Original Equipment Manufacturer.
[[Page 56131]]
OHV............................... Overhead Valve.
OMB............................... Office of Management and Budget.
OPEC.............................. Organization of the Petroleum
Exporting Countries.
ORNL.............................. Oak Ridge National Laboratories.
PC................................ Passenger Car.
PEF............................... Petroleum Equivalency Factor.
PHEV.............................. Plug-in Hybrid Electric Vehicle.
PM................................ Particulate Matter.
PM2.5............................. fine particulate matter.
PMY............................... Pre-Model Year.
PRA............................... Paperwork Reduction Act of 1995.
PRIA.............................. Preliminary Regulatory Impact
Analysis.
PS................................ Power Split.
RC................................ Reference Case.
REMI.............................. Regional Economic Models, Inc.
RIN............................... Regulation identifier number.
ROLL.............................. Tire rolling resistance.
RPE............................... Retail Price Equivalent.
RRC............................... Rolling Resistance Coefficient.
SAE............................... Society of Automotive Engineers.
SBREFA............................ Small Business Regulatory
Enforcement Fairness Act.
SC................................ Social Cost.
SCC............................... Social Cost of Carbon.
SEC............................... Securities and Exchange Commission.
SGDI.............................. Stoichiometric Gasoline Direct
Injection.
SHEV.............................. Strong Hybrid Electric Vehicle.
SI................................ Spark Ignition.
SIP............................... State Implementation Plan.
SKIP.............................. refers to skip input in market data
input file.
SO2............................... Sulfur Dioxide.
SOC............................... State of Charge.
SOHC.............................. Single Overhead Camshaft.
SOX............................... Sulfur Oxide.
SPR............................... Strategic Petroleum Reserve.
SULEV............................. Super-Ultra Low Emission Vehicles.
SUV............................... Sport Utility Vehicle.
SwRI.............................. Southwest Research Institute.
TAR............................... Technical Assessment Report.
TSD............................... Technical Support Document.
UAW............................... United Automobile, Aerospace &
Agricultural Implement Workers of
America.
UMRA.............................. Unfunded Mandates Reform Act of
1995.
VCR............................... Variable Compression Ratio.
VMT............................... Vehicle Miles Traveled.
VOC............................... Volatile Organic Compounds.
VSL............................... Value of a Statistical Life.
VTG............................... Variable Turbo Geometry.
VTGE.............................. Variable Turbo Geometry (Electric).
VVL............................... Variable Valve Lift.
VVT............................... Variable Valve Timing.
WF................................ Work Factor.
ZEV............................... Zero Emission Vehicle.
------------------------------------------------------------------------
Does this action apply to me?
This proposal affects companies that manufacture or sell new
passenger automobiles (passenger cars), non-passenger automobiles
(light trucks), and HDPUV, as defined under NHTSA's Corporate Average
Fuel Economy (CAFE) regulations.\1\ Regulated categories and entities
include:
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\1\ ``Passenger car,'' ``light truck,'' and ``heavy-duty pickup
trucks and vans'' are defined in 49 CFR part 523.
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NAICS codes Examples of potentially
Category \A\ regulated entities
------------------------------------------------------------------------
Industry....................... 335111 Motor Vehicle
Manufacturers.
336112
Industry....................... 811111 Commercial Importers of
Vehicles and Vehicle
Components.
811112
811198
423110
Industry....................... 335312 Alternative Fuel
Vehicle Converters.
336312
[[Page 56132]]
336399
811198
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\A\ North American Industry Classification System (NAICS).
This list is not intended to be exhaustive, but rather provides a
guide regarding entities likely to be regulated by this action. To
determine whether particular activities may be regulated by this
action, you should carefully examine the regulations. You may direct
questions regarding the applicability of this action to the persons
listed in FOR FURTHER INFORMATION CONTACT.
Table of Contents
I. Executive Summary
II. Technical Foundation for NPRM Analysis
A. Why is NHTSA conducting this analysis?
B. What is NHTSA analyzing?
C. What inputs does the compliance analysis require?
D. Technology Pathways, Effectiveness, and Cost
E. Consumer Responses to Manufacturer Compliance Strategies
F. Simulating Emissions Impacts of Regulatory Alternatives
G. Simulating Economic Impacts of Regulatory Alternatives
H. Simulating Safety Effects of Regulatory Alternatives
III. Regulatory Alternatives Considered in This NPRM
A. General Basis for Alternatives Considered
B. Regulatory Alternatives Under Consideration in This Proposal
IV. Effects of the Regulatory Alternatives
A. Effects on Vehicle Manufacturers
B. Effects on Society
C. Physical and Environmental Effects
D. Sensitivity Analysis
V. Basis for NHTSA's Tentative Conclusion That the Proposed Standards
Are Maximum Feasible
A. EPCA, as Amended by EISA
B. Administrative Procedure Act
C. National Environmental Policy Act
D. Evaluating the EPCA/EISA Factors and Other Considerations To
Arrive at the Proposed Standards 482
VI. Compliance and Enforcement
A. Background
B. Overview of Enforcement
C. Proposed Changes
D. Decision Not To Propose Non-Fuel Saving Credits or Flexibilities
VII. Public Participation
VIII. Regulatory Notices and Analyses
A. Executive Order 12866, Executive Order 13563
B. DOT Regulatory Policies and Procedures
C. Executive Order 13990
D. Environmental Considerations
E. Regulatory Flexibility Act
F. Executive Order 13132 (Federalism)
G. Executive Order 12988 (Civil Justice Reform)
H. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)
I. Unfunded Mandates Reform Act
J. Regulation Identifier Number
K. National Technology Transfer and Advancement Act
L. Department of Energy Review
M. Paperwork Reduction Act
N. Privacy Act
IX. Regulatory Text
I. Executive Summary
NHTSA, on behalf of the DOT, is proposing new corporate average
fuel economy (CAFE) standards for passenger cars and light trucks \2\
for MYs 2027-2032,\3\ and new fuel efficiency standards for heavy-duty
pickup trucks and vans \4\ (HDPUVs) for MYs 2030-2035. This proposal
responds to NHTSA's statutory obligation to set CAFE and HDPUV
standards at the maximum feasible level that the agency determines
vehicle manufacturers can achieve in each MY, in order to improve
energy conservation.\5\ Improving energy conservation by raising CAFE
and HDPUV standard stringency not only helps consumers save money on
fuel, but also improves national energy security and reduces harmful
emissions.
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\2\ Passenger cars are generally sedans, station wagons, and
two-wheel drive crossovers and sport utility vehicles (CUVs and
SUVs), while light trucks are generally four-wheel drive sport
utility vehicles, pickups, minivans, and passenger/cargo vans.
``Passenger car'' and ``light truck'' are defined more precisely at
49 CFR part 523.
\3\ As discussed further below, NHTSA is proposing six MYs of
standards for each fleet, and notes that the final year of standards
proposed for passenger cars and light trucks, MY 2032, is
``augural,'' as in the 2012 final rule that established CAFE
standards for MYs 2017 and beyond.
\4\ HDPUVs are generally Class 2b/3 work trucks, fleet SUVs,
work vans, and cutaway chassis-cab vehicles. ``Heavy-duty pickup
trucks and vans'' are more precisely defined at 49 CFR part 523.
\5\ See 49 U.S.C. 32902.
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Based on the information currently before us, NHTSA estimates that
this proposal, if implemented, would reduce gasoline consumption by 88
billion gallons relative to baseline levels for passenger cars and
light trucks, and by approximately 2.6 billion gallons relative to
baseline levels for HDPUVs through calendar year 2050. Reducing fuel
consumption has multiple benefits--it improves our nation's energy
security, it saves consumers money, and reduces harmful pollutant
emissions that lead to adverse human and environmental health outcomes
and climate change. NHTSA estimates that this proposal, if implemented,
could reduce carbon dioxide (CO<INF>2</INF>) emissions by 885 million
metric tons for passenger cars and light trucks, and by 22 million
metric tons for HDPUVs through calendar year 2050. While consumers
would pay more for new vehicles upfront, we estimate that they would
save money on fuel costs over the lifetimes of those new vehicles--
lifetime fuel savings exceed modeled regulatory costs by roughly $100,
on average, for passenger car and light truck buyers of MY 2032
vehicles, and roughly $300, on average, for HDPUV buyers of MY 2038
vehicles. Net benefits for the preferred alternative for passenger cars
and light truck are estimated to be $16.8 billion at a 3 percent
discount rate (DR), and $8.4 billion at a 7 percent DR, and for HDPUVs,
net benefits are estimated to be $2.2 billion at a 3 percent DR, and
$1.4 billion at a 7 percent DR.
NHTSA's proposal is also consistent with Executive Order (E.O.)
14037, ``Strengthening American Leadership in Clean Cars and Trucks,''
(August 5, 2021), which directs the Secretary of Transportation (by
delegation, NHTSA) to develop rulemakings under Energy Independence and
Security Act of 2007 (EISA) \6\ to consider beginning work on a
rulemaking to establish new fuel economy standards for passenger cars
and light trucks beginning with MY 2027 and extending through at least
MY 2030, and to consider beginning work on a rulemaking to establish
new fuel efficiency standards for HDPUVs beginning with MY 2028 and
extending through at least MY 2030, consistent with applicable law.\7\
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\6\ See 49 U.S.C. Chapter 329, generally.
\7\ Id, Sec. 2.
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The record for this proposal comprised this Notice of Proposed
Rulemaking (NPRM), a Draft Technical
[[Page 56133]]
Support Document (Draft TSD), a Preliminary Regulatory Impact
Assessment (PRIA), and a Draft EIS, along with extensive analytical
documentation, supporting references, and many other resources. Most of
these resources are available on NHTSA's website,\8\ and other
references not available on NHTSA's website can be found in the
rulemaking docket, the docket number of which is listed at the
beginning of this preamble.
---------------------------------------------------------------------------
\8\ See National Highway Traffic Safety Administration. 2023.
Corporate Average Fuel Economy. Available at: <a href="https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy">https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy</a>. (Accessed: May 31,
2023).
---------------------------------------------------------------------------
The proposal considers a range of regulatory alternatives for each
fleet, consistent with NHTSA's obligations under the Administrative
Procedure Act (APA), National Environmental Policy Act (NEPA) and E.O.
12866. Specifically, NHTSA considered four regulatory alternatives for
passenger cars and light trucks, as well as the No-Action Alternative.
Each alternative is labeled for the type of vehicle and the rate of
increase in fuel economy stringency, for example, PC1LT3 represents a 1
percent increase in Passenger Car standards and a 3 percent increase in
Light Truck standards. We include three regulatory alternatives for
HDPUVs, each representing different possible rates of year-over-year
increase in the stringency of new fuel economy and fuel efficiency
standards, as well as the No-Action Alternative. For example, HDPUV4
represents a 4 percent increase in fuel efficiency standards applicable
to HDPUVs. The regulatory alternatives are as follows: \9\
---------------------------------------------------------------------------
\9\ In a departure from recent CAFE rulemaking trends, we have
applied different rates of stringency increase to the passenger car
and the light truck fleets. Rather than have both fleets increase
their respective standards at the same rate, light truck standards
will increase at a different rate than passenger car standards. Each
action alternative evaluated for this proposal has a passenger car
fleet rate-of-increase of fuel economy lower than the rate-of-
increase of fuel economy for the light truck fleet. As discussed in
Section III below, this is primarily due to NHTSA's assessment that
manufacturers have already made substantial progress in technology
application to passenger cars, such that the possibility for further
fuel economy improvements to Internal Combustion Engine- and hybrid-
based vehicles is relatively limited, while there appears to be much
more room to improve in the light truck fleet. This is consistent
with NHTSA's obligation to set maximum feasible CAFE standards
separately for passenger cars and light trucks (see 49 U.S.C.
32902), which gives NHTSA discretion, by law, to set CAFE standards
that increase at different rates for cars and trucks. Again, the
reasons for this approach are discussed in Section III of this
preamble. Section V of this preamble also discusses in greater
detail how this approach carries out NHTSA's responsibility under
EPCA to set maximum feasible standards for both passenger cars and
light trucks.
Table I-1--Regulatory Alternatives Under Consideration for MYs 2027-2032
Passenger Car and Light Truck CAFE Standards \10\
------------------------------------------------------------------------
Passenger
car Light truck
stringency stringency
Name of alternative increases, increases,
year-over- year-over-
year (%) year (%)
------------------------------------------------------------------------
No-Action Alternative......................... N/A N/A
Alternative PC1LT3............................ 1 3
Alternative PC2LT4 (Preferred Alternative).... 2 4
Alternative PC3LT5............................ 3 5
Alternative PC6LT8............................ 6 8
------------------------------------------------------------------------
Table I-2--Regulatory Alternatives Under Consideration for MYs 2030-2035
HDPUV Fuel Efficiency Standards \11\
------------------------------------------------------------------------
HDPUV
stringency
Name of alternative increases,
year-over-
year (%)
------------------------------------------------------------------------
No-Action Alternative...................................... N/A
Alternative HDPUV4......................................... 4
Alternative HDPUV10 (Preferred Alternative)................ 10
Alternative HDPUV14........................................ 14
------------------------------------------------------------------------
NHTSA is proposing to increase stringency at 2 percent per year for
passenger cars and at 4 percent per year for light trucks, year over
year from MY 2027 through MY 2032, and at 10 percent per year for
HDPUVs, year over year from MY 2030 through MY 2035. The regulatory
alternatives representing these proposals are called ``PC2LT4'' for
passenger cars and light trucks, and ``HDPUV10'' for HDPUVs. NHTSA
tentatively concludes that these levels are the maximum feasible for
these MYs as discussed in more detail in Section V of this preamble.
NHTSA is proposing standards that rise at a more rapid rate for light
trucks than for passenger cars. As explained in more detail below, the
agency believes that there is more room to improve the fuel economy of
light trucks, in a cost-effective way, and that the benefits of
requiring more improvement from light trucks will be significant given
their high usage and the fact that they make up an ever-larger
percentage of the overall fleet. Passenger cars, on the other hand,
have been improving at a rapid rate for many years in succession, and
the available improvements for that fleet are fewer, particularly given
the statutory constraints that prevent NHTSA from considering the fuel
economy of battery electric vehicles (BEVs) in determining maximum
feasible CAFE standards.\12\ NHTSA notes that due to the statutory
constraints that prevent NHTSA from considering the fuel economy of
dedicated alternative fueled vehicles, the full fuel economy of dual-
fueled alternative fueled vehicles, and the availability of over-
compliance credits when determining what standards are maximum
feasible, many aspects of our analysis are different from what they
would otherwise be without the statutory restrictions--in particular,
the technologies chosen to model possible compliance options, the
estimated costs, benefits, and achieved levels of fuel economy, as well
as the current and projected adoption of alternative fueled vehicles.
NHTSA evaluates the results of that constrained analysis by weighing
the four enumerated statutory factors to determine which standards are
maximum feasible.
---------------------------------------------------------------------------
\10\ Percentages in the table represent the year of year
reduction in gal/mile applied to the mpg values on the target curves
shown in Figure 1-1. The reduction in gal/mile results in an incrase
mpg.
\11\ For HDPUVs, the different regulatory alternatives are also
defined in terms of percent-increases in stringency from year to
year, but in terms of fuel consumption reductions rather than fuel
economy increases, so that increasing stringency appears to result
in standards going down (representing a direct reduction in fuel
consumed) over time rather than up. Also, unlike for the passenger
car and light truck standards, because HDPUV standards are measured
using a fuel consumption metric, year-over-year percent changes do
actually represent gallon/mile differences across the work-factor
range. Under each action alternative, the stringency changes at the
same percentage rate in each model year in the rulemaking time
frame.
\12\ 49 U.S.C. 32902(h) states that when determining what levels
of CAFE standards are maximum feasible, NHTSA ``(1) may not consider
the fuel economy of dedicated automobiles [including battery-
electric vehicles]; (2) shall consider dual fueled automobiles to be
operated only on gasoline or diesel fuel; and (3) may not consider,
when prescribing a fuel economy standard, the trading, transferring,
or availability of credits under section 32903.''
---------------------------------------------------------------------------
In this action, NHTSA is proposing six MYs of standards for each
fleet. For passenger cars and light trucks, NHTSA notes that the final
year of standards proposed, MY 2032, is ``augural,'' as in the 2012
final rule which established CAFE standards for MYs 2017 and beyond.
Augural standards mean that they are NHTSA's best estimate of what the
agency would propose, based on the information currently before it, if
the
[[Page 56134]]
agency had authority to set CAFE standards for more than five MYs in
one action. The augural standards do not, and will not, have any effect
in themselves and will not be binding unless adopted in a subsequent
rulemaking. Consistent with past practice, NHTSA is including augural
standards for MY 2032 to give its best estimate of what those standards
would be to provide as much predictability as possible to manufacturers
and to be consistent with the time frame of the proposed Environmental
Protection Agency (EPA) standards for greenhouse gas (GHG) emissions
from motor vehicles. Due to statutory lead time constraints for HDPUV
standards, NHTSA's proposal for HDPUV standards must begin with MY
2030. There is no restriction on the number of MYs for which NHTSA may
set HDPUV standards, so none of the HDPUV standards are augural. NHTSA
also requests comment on a scenario where the regulatory alternatives
would extend only through MY 2032, which coincides with the time frame
of the EPA proposed GHG standards for this vehicle segment.
NHTSA requests comment on the full range of standards encompassed
between the No-Action Alternative and Alternative PC6LT8 for MYs 2027-
2032 Passenger Cars, as well as comments on the range of standards
encompassed for light trucks, and on the full range of standards
encompassed between the No-Action Alternative and Alternative HDPUV14
for MYs 2030-2035 HDPUVs. NHTSA expressly asks for comment on
combinations of standards that may not be explicitly identified in this
proposal, including standards between the No-Action Alternative and
PC1/LT3, as well as between PC3/LT5 and PC6/LT8. NHTSA also notes that
passenger car and light truck stringency may move independently of one
another, and that rates of increase may vary by model year.
The proposed CAFE standards remain vehicle-footprint-based, like
the current CAFE standards in effect since MY 2011, and the proposed
HDPUV standards remain work-factor-based, like the HDPUV standards
established in the 2011 ``Phase 1'' rulemaking and continued to be used
in 2016 ``Phase 2'' rulemaking. The footprint of a vehicle is the area
calculated by multiplying the wheelbase times the track width,
essentially the rectangular area of a vehicle measured from tire to
tire where the tires hit the ground. The work factor (WF) of a vehicle
is a unit established to measure payload, towing capability, and
whether or not a vehicle has four-wheel drive. This means that the
proposed standards are defined by mathematical equations that represent
linear functions relating vehicle footprint to fuel economy targets for
passenger cars and light trucks,\13\ and relating WF to fuel
consumption targets for HDPUVs.
---------------------------------------------------------------------------
\13\ Generally, passenger cars have more stringent targets than
light trucks regardless of footprint, and smaller vehicles will have
more stringent targets than larger vehicles, because smaller
vehicles are generally more fuel efficient No individual vehicle or
vehicle model need meet its target exactly, but a manufacturer's
compliance is determined by how its average fleet fuel economy
compares to the average fuel economy of the targets of the vehicles
it manufactures.
---------------------------------------------------------------------------
The target curves for passenger cars, light trucks, and
compression-ignition and spark-ignition HDPUVs are set forth below;
curves for MYs prior to the years of the rulemaking time frame are
included in the figures for context. NHTSA underscores that the
equations and coefficients defining the curves are the CAFE and HDPUV
standards, and not the mpg and gallon/100-mile estimates that the
agency currently estimates could result from manufacturers complying
with the proposed curves. We provide mpg and gallon/100-mile estimates
for ease of understanding after we illustrate the footprint curves, but
the equations and coefficients are the actual standards.
BILLING CODE 4910-59-P
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BILLING CODE 4910-59-C
NHTSA is also proposing new minimum domestic passenger car CAFE
standards (MDPCS) for MYs 2027-2032 as required by the Energy Policy
and Conservation Act of 1975 (EPCA), as amended by the EISA, and
applied to vehicles defined as manufactured in the United States.
Section 32902(b)(4) of 49 U.S.C. requires NHTSA to project the minimum
domestic standard when it promulgates passenger car standards for a MY,
so the minimum standards are estimated as specific mpg values and will
be finalized as specific mpg values when NHTSA sets final passenger car
standards for MYs 2027-2032. NHTSA retains the 1.9 percent offset first
used in the 2020 final rule, reflecting prior differences between
passenger car footprints originally forecast by the agency and
passenger car footprints as they occurred in the real world, such that
the minimum domestic passenger car standard is as shown in the table
below. NHTSA requests comment on this approach.
[[Page 56137]]
Table I-3--Proposed Minimum Domestic Passenger Car Standard With Offset
[mpg]
----------------------------------------------------------------------------------------------------------------
MY 2027 MY 2028 MY 2029 MY 2030 MY 2031 MY 2032
----------------------------------------------------------------------------------------------------------------
54.1...................................... 55.3 56.4 57.5 58.7 59.9
----------------------------------------------------------------------------------------------------------------
Recognizing that many readers think about CAFE standards in terms
of the mpg values that the standards are projected to eventually
require, NHTSA currently estimates that the proposed standards would
require roughly 57.8 mpg in MY 2032, on an average industry fleet-wide
basis, for passenger cars and light trucks. NHTSA notes both that real-
world fuel economy is generally 20-30 percent lower than the estimated
required CAFE level stated above,\14\ and also that the actual CAFE
standards are the footprint target curves for passenger cars and light
trucks. This last note is important, because it means that the ultimate
fleet-wide levels will vary depending on the mix of vehicles that
industry produces for sale in those MYs. NHTSA also calculates and
presents ``estimated achieved'' fuel economy levels, which differ
somewhat from the estimated required levels for each fleet, for each
year.\15\ NHTSA estimates that the industry-wide average fuel economy
achieved in MY 2032 for passenger cars and light trucks combined could
increase from about 53.6 mpg under the No-Action Alternative to 57.6
mpg under the proposed standards.
---------------------------------------------------------------------------
\14\ CAFE compliance is evaluated per 49 U.S.C. 32904(c) Testing
and Calculation Procedures, which states that the EPA Administrator
(responsible under EPCA/EISA for measuring vehicle fuel economy)
shall use the same procedures used for model year 1975 (weighted 55
percent urban cycle and 45 percent highway cycle) or comparable
procedures. Colloquially, this is known as the 2-cycle test. The
``real-world'' or 5-cycle evaluation includes the 2-cycle tests, and
three additional tests that are used to adjust the city and highway
estimates to account for higher speeds, air conditioning use, and
colder temperatures. In addition to calculating vehicle fuel
economy, EPA is responsible for providing the fuel economy data that
is used on the fuel economy label on all new cars and light trucks,
which uses the ``real-world'' values. In 2006, EPA revised the test
methods used to determine fuel economy estimates (city and highway)
appearing on the fuel economy label of all new cars and light trucks
sold in the U.S., effective with 2008 model year vehicles.
\15\ NHTSA's analysis reflects that manufacturers nearly
universally make the technological improvements prompted by CAFE
standards at times that coincide with existing product ``refresh''
and ``redesign'' cycles, rather than applying new technology every
year regardless of those cycles. It is significantly more cost-
effective to make fuel-economy-improving technology updates when a
vehicle is being updated anyway. See TSD 2.2.1.7 for additional
discussion about manfacturer refresh and redesign cycles.
\16\ There is no actual legal requirement for combined passenger
car and light truck fleets, but NHTSA presents information this way
in recognition of the fact that many readers will be accustomed to
seeing such a value.
Table I-4--Estimated Required Average and Estimated Achieved Average of CAFE Levels
[mpg] for passenger cars and light trucks, preferred alternative PC2LT4
----------------------------------------------------------------------------------------------------------------
Fleet MY 2027 MY 2028 MY 2029 MY 2030 MY 2031 MY 2032
----------------------------------------------------------------------------------------------------------------
Passenger Cars:
Estimated Required............ 60.0 61.2 62.5 63.7 65.1 66.4
Estimated Achieved............ 63.5 65.3 67.5 69.3 71.3 72.8
Light Trucks:
Estimated Required............ 44.4 46.2 48.2 50.2 52.2 54.4
Estimated Achieved............ 44.2 45.7 47.5 49.0 50.9 52.4
Combined:
Estimated Required \16\....... 48.4 50.1 51.9 53.8 55.7 57.8
Estimated Achieved............ 49.0 50.5 52.3 54.0 56.0 57.6
----------------------------------------------------------------------------------------------------------------
To the extent that manufacturers appear to be over-complying in our
analysis with required fuel economy levels in the passenger car fleet,
NHTSA notes that this is due to the inclusion of several all-electric
manufacturers in the baseline analysis, which affects the overall
average achieved levels. Manufacturers with more traditional fleets do
not over-comply at such high levels in our analysis, and our analysis
considers the compliance paths for both manufacturer groups. In
contrast, while it looks like manufacturers are falling short of
required fuel economy levels in the light truck fleet (and choosing
instead to pay civil penalties), NHTSA notes that this appears to be
the result of a relatively small number of companies, which affects the
overall average achieved levels. The agency's overall assessment is
that the light truck standards are maximum feasible even though they
may be challenging for some individual companies to achieve. Please see
Section V.D of this preamble for more discussion on these topics and
how the agency has considered them in determining maximum feasible
standards for this proposal.
For HDPUVs, NHTSA currently projects that the standards would
require, on an average industry fleet-wide basis for the HDPUV fleet,
roughly 2.638 gallons per 100 miles \17\ in MY 2035. HDPUV standards
are attribute-based like passenger car and light truck standards, so
here, too, ultimate fleet-wide levels will vary depending on what
industry produces for sale.
---------------------------------------------------------------------------
\17\ The HDPUV standards measure compliance in direct fuel
consumption and uses gallons consumed per 100 miles of operation as
a metric. See 49 CFR 535.6.
[[Page 56138]]
Table I-5--Estimated Required Average and Estimated Achieved Average of Fuel Efficiency Levels (gal/100 miles for HDPUVs, preferred alternative HDPUV10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
MY 2030 MY 2031 MY 2032 MY 2033 MY 2034 MY 2035
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Required................................ 4.427 4.051 3.646 3.255 2.930 2.638
Estimated Achieved................................ 3.266 2.764 2.759 2.160 2.157 2.153
--------------------------------------------------------------------------------------------------------------------------------------------------------
For all fleets, average requirements and average achieved CAFE and
HDPUV fuel efficiency levels would ultimately depend on manufacturers'
and consumers' responses to standards, technology developments,
economic conditions, fuel prices, and other factors.
NHTSA recognizes that the 2022 rule for MYs 2024-2026 involved
higher rates of increase based on our assessment at the time of what
technologies were available for deployment in that fleet. Our technical
analysis for this proposal keeps that same general framework as the
2022 final rule, but as applied to a more-recent fleet that includes
the vehicles that will be subject to the 2024-2026 standards. Thus,
since May 2022, NHTSA has updated technologies considered in our
analysis (removing technologies which are already universal or nearly
so and technologies which are exiting the fleet, adding certain
advanced engine technologies; \18\) updated macroeconomic input
assumptions, as with each round of rulemaking analysis; improved user
control of various input parameters; updated our approach to modeling
manufacturers' expected compliance with states' Zero Emission Vehicle
(ZEV) programs; accounted for potential changes to DOE's Petroleum
Equivalency Factor (PEF), which is proposed to be changed,\19\ for the
baseline assumptions; expanded accounting for Federal incentives such
as Inflation Reduction Act programs; expanded procedures for estimating
new vehicle sales and fleet shares; updated inputs for projecting
aggregate light-duty Vehicle Miles Traveled (VMT); and added various
output values and options.\20\
---------------------------------------------------------------------------
\18\ See Draft TSD Chapter 1.1 for a complete list of
technologies added or removed from the analysis.
\19\ For more information on DOE's proposal, see 88 FR 21525.
For more information on how DOE's proposal affects NHTSA's results
in this proposal, please see Chapter 9 of the PRIA.
\20\ See TSD Chapter 1.1 for a detailed discussion of analysis
updates.
---------------------------------------------------------------------------
NHTSA tentatively concludes, as we explain in more detail below,
that Alternative PC2LT4 is the maximum feasible alternative that
manufacturers can achieve for MYs 2027-2032 passenger cars and light
trucks, based on a variety of reasons. Energy conservation is still
paramount, for the consumer benefits, energy security benefits, and
environmental benefits that it provides. Moreover, although the vehicle
fleet is undergoing a significant transformation now and in the coming
years, for reasons other than the CAFE standards, NHTSA believes that a
significant percentage of the on-road (and new) vehicle fleet may
remain propelled by internal combustion engines (ICEs) through 2032.
NHTSA believes that the alternative we are proposing will encourage
manufacturers producing those ICE vehicles during the standard-setting
time frame to achieve significant fuel economy, improve energy
security, and reduce harmful pollution by a large amount. At the same
time, NHTSA is proposing standards that our estimates suggest will
continue to save consumers money and fuel over the lifetime of their
vehicles, particularly light truck buyers, while being economically
practicable and technologically feasible for manufacturers to achieve.
Although Alternatives PC3LT5 and PC6LT8 would conserve more energy
and provide greater fuel savings benefits and certain pollutant
emissions reductions, NHTSA's statutorily-constrained analysis
currently estimates that those alternatives may not be achievable for
many manufacturers in the rulemaking time frame. Additionally,
compliance with those more stringent alternatives would impose
significant costs on individual consumers without corresponding fuel
savings benefits large enough to, on average, offset those costs.
Within that framework, NHTSA's analysis suggests that the more
stringent alternatives could push more technology application than
would be economically practicable, given anticipated baseline activity
that will already be consuming manufacturer resources and capital. In
contrast to Alternatives PC3LT5 and PC6LT8, Alternative PC2LT4 comes at
a cost we believe the market can bear without creating consumer
acceptance or sales issues, appears to be much more achievable, and
will still result in consumer net benefits on average. The proposed
alternative also achieves large fuel savings benefits and significant
reductions in emissions. NHTSA tentatively concludes Alternative PC2LT4
is the appropriate choice given this record.
For HDPUVs, NHTSA tentatively concludes, as explained in more
detail below, that Alternative HDPUV10 is the maximum feasible
alternative that manufacturers can achieve for MYs 2030-2035 HDPUVs. It
has been seven years since NHTSA revisited HDPUV standards, and our
analysis suggests that there is much opportunity for cost-effective
improvements in this segment, broadly speaking. At the same time, we
recognize that these vehicles are primarily used to conduct work for a
large number of businesses. Although Alternative HDPUV14 would conserve
more energy and provide greater fuel savings benefits and
CO<INF>2</INF> emissions reductions, it is significantly more costly
than HDPUV10, and NHTSA currently estimates that Alternative HDPUV10 is
the most cost-effective under a variety of metrics and at either a 3
percent or a 7 percent DR, while still being appropriate and
technologically feasible. NHTSA is allowed to consider electrification
in determining maximum feasible standards for HDPUVs. As a result,
NHTSA tentatively concludes that HDPUV10 is the appropriate choice
given the record discussed in more detail below, and we believe it
balances EPCA's overarching objective of energy conservation while
remaining cost-effective and technologically feasible.
For passenger cars and light trucks, NHTSA estimates that this
proposal would reduce average fuel outlays over the lifetimes of MY
2032 vehicles by about $1,043 per vehicle, while increasing the average
cost of those vehicles by about $932 over the baseline, at a 3 percent
DR. With climate benefits and all other benefits and costs discounted
at 3 percent, when considering the entire CAFE fleet for MYs 1983-2032,
NHTSA estimates $58.6 billion in monetized costs and $75.5 billion in
monetized benefits attributable to the proposed standards, such that
the present value of aggregate net monetized benefits to society would
be $16.8 billion.\21\
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\21\ These values are from our ``model year'' analysis,
reflecting the entire fleet from MYs 1983-2032, consistent with past
practice. Model year and calendar year perspectives are discussed in
more detail below in this section.
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[[Page 56139]]
For HDPUVs, NHTSA estimates that this proposal could reduce average
fuel outlays over the lifetimes of MY 2038 vehicles by about $439 per
vehicle, while increasing the average cost of those vehicles by about
$131 over the baseline, at a 3 percent DR. With climate benefits and
all other benefits and costs discounted at 3 percent, when considering
the entire on-road HDPUV fleet for CYs 2022-2050, NHTSA estimates $2.1
billion in monetized costs and $4.3 billion in monetized benefits
attributable to the proposed standards, such that the present value of
aggregate net monetized benefits to society would be $2.2 billion.\22\
---------------------------------------------------------------------------
\22\ These values are from our ``calender year'' analysis,
reflecting the on-the-road fleet from CYs 2022-2050. Model year and
calendar year perspectives are discussed in more detail below in
this section.
---------------------------------------------------------------------------
These assessments do not include important unquantified effects,
such as energy security benefits, equity and distributional effects,
and certain air quality benefits from the reduction of toxic air
pollutants and other emissions, among other things, so that the net
benefit estimate is a conservative one.\23\ In addition, the power
sector emissions modeling reflected in this analysis does not
incorporate the most up-to-date data on the future evolution of the
power sector, and the emission projections are higher than analyses
using more recent data indicate is likely to be the case. This modeling
will be updated in the final rule.
---------------------------------------------------------------------------
\23\ These cost and benefit estimates are based on many
different and uncertain inputs, and NHTSA has conducted several
dozen sensitivity analyses varying individual inputs to evaluate the
effect of that uncertainty. For example, while NHTSA's reference
case analysis constrains the application of high compression ratio
engines to some vehicles based on performance and other
considerations, we also conducted a sensitivity analysis that
removed all of those constraints. Results of this and other
sensitivity analyses are discussed in Section IV.D of this preamble,
in Chapter 9 of the PRIA, and (if large or otherwise significant) in
Section V.D of this preamble.
---------------------------------------------------------------------------
Table I-6 presents aggregate benefits and costs for new vehicle
buyers and for the average individual new vehicle buyer.
Table I-6--Benefits and Costs for the Light Duty (LD) and HDPUV
Preferred Alternatives
[2021$, 3 percent annual DR, 3 percent SC-GHG DR]
------------------------------------------------------------------------
PC2LT4 HDPUV10
------------------------------------------------------------------------
Aggregate Buyer Benefits and Costs ($b):
Costs............................... 43.3 1.4
Benefits............................ 59.4 3.2
Net Benefits........................ 16.1 1.7
Aggregate Societal Benefits and Costs
(including buyer, $b):
Costs............................... 58.6 2.1
Benefits............................ 75.5 4.3
Net Benefits........................ 16.8 2.2
Per-vehicle ($):
Regulatory Costs.................... 932 131
Lifetime Fuel Savings............... 1,043 439
------------------------------------------------------------------------
Notes: Total buyer costs and benefits include those presented in more
detail in Table V-6 and Table V-7. Societal costs and benefits include
those presented in more detail in Table V-8 and Table V-9. Aggregate
light-duty measures are computed for the lifetimes of the total light-
duty fleet produced through MY 2032. Aggregate HDPUV measures are
computed for the on-road HDPUV fleet for CYs 2022-2050. Per-vehicle
costs are those for MY 2032 (LD) and MY 2038 (HDPUV).
NHTSA recognizes that EPA has recently issued a proposal to set new
multi-pollutant emissions standards for MYs 2027 and later light-duty
(LD) and medium-duty (MD) vehicles.\24\ EPA describes its proposal as
building upon EPA's final standards for Federal GHG emissions standards
for passenger cars and light trucks for MYs 2023 through 2026 and
leverages advances in clean car technology to unlock benefits to
Americans ranging from reducing pollution, to improving public health,
to saving drivers money through reduced fuel and maintenance costs.\25\
EPA's proposed standards would phase in over MYs 2027 through 2032.\26\
---------------------------------------------------------------------------
\24\ See Enviromental Protection Agency. 2023. Proposed Rule:
Multi-Pollutant Emissions Standards for Model Years 2027 and Later
Light-Duty and Medium-Duty Vehicles. Last revised: May 25, 2023.
Available at: <a href="https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-multi-pollutant-emissions-standards-model">https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-multi-pollutant-emissions-standards-model</a>.
(Accessed: May 31, 2023).
\25\ Id.
\26\ Id.
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NHTSA coordinated with EPA in developing our proposal to avoid
inconsistencies and produce requirements that are consistent with
NHTSA's statutory authority. The proposals nevertheless differ in
important ways. First, NHTSA's proposal, consistent with its statutory
authority and mandate under EPCA/EISA, focuses on improving vehicle
fuel economy and not directly on reducing vehicle emissions--though
reduced emissions are a follow-on effect of improved fuel economy.
Second, the biggest difference between the two proposals is due to
EPCA/EISA's statutory prohibition against NHTSA considering the fuel
economy of dedicated alternative fueled vehicles, including BEVs, and
including the full fuel economy of dual-fueled alternative fueled
vehicles in determining the maximum feasible fuel economy level that
manufacturers can achieve for passenger cars and light trucks, even
though manufacturers may use BEVs and dual-fueled alternative fuel
vehicles (AFV) to comply with CAFE standards. EPA is not prohibited
from considering BEVs as a compliance option. EPA's proposal is
informed by, among other considerations, trends in the automotive
industry (including the proliferation of announced investments by
automakers in electrifying their fleets), tax incentives under the
Inflation Reduction Act (IRA), and other forces that are leading to a
rapid transition in the automotive industry away from ICEs.\27\ NHTSA,
in contrast, may not consider BEVs as a compliance option for the
passenger car and light truck fleets even though manufacturers may, in
fact, use BEVs to comply with CAFE standards. This constraint means
that not only are NHTSA's stringency rates of increase different from
EPA's but also the shapes
[[Page 56140]]
of our standards are different based upon the different scopes.
---------------------------------------------------------------------------
\27\ Enviromental Protection Agency. 2023. Proposed Rule: Multi-
Pollutant Emissions Standards for Model Years 2027 and Later Light-
Duty and Medium-Duty Vehicles. EPA-420-F-23-009. Offce of
Transportation and Air Quality. Available at: <a href="https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-multi-pollutant-emissions-standards-model">https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-multi-pollutant-emissions-standards-model</a>. (Accessed: May 31, 2023).
---------------------------------------------------------------------------
Recognizing that the agencies are implementing statutory mandates
to set maximum feasible fuel economy standards and to address dangerous
air pollution, and that both standards affect the same fleet of
vehicles, we seek comment on how best to optimize the effectiveness of
NHTSA's standards consistent with the statutory factors. Our
statutorily constrained simulated industry response shows a reasonable
path forward to compliance with CAFE standards, but we want to stress
that our analysis simply shows feasibility and does not dictate a
required path to compliance. Because the standards are performance-
based, manufacturers are always free to apply their expertise to find
the appropriate technology path that best meets all desired outcomes.
Indeed, as explained in greater detail later on in this proposal, it is
entirely possible and reasonable that a vehicle manufacturer will use
technology options to meet NHTSA's proposed standards that are
significantly different from what NHTSA's analysis for this proposal
suggests given the statutory constraints under which it operates. NHTSA
will coordinate with EPA to ensure NHTSA's standards take account of
statutory objectives and constraints while minimizing compliance costs.
NHTSA seeks input to help inform these objectives.
As discussed before, NHTSA does not face the same statutory
limitations in setting standards for HDPUVs as it does in setting
standards for passenger cars and light trucks. This allows NHTSA to
consider a broader array of technologies in setting maximum feasible
standards for HDPUVs. However, we are still considerate of factors that
allow these vehicles to maintain utility and do work for the consumer
when we set the standards.
Additionally, NHTSA has considered and accounted for manufacturers'
expected compliance with California's Advanced Clean Cars (ACC) and
Advanced Clean Trucks (ACT) regulations in our analysis, as part of the
analytical baseline.\28\ We find that manufacturers will comply with
ZEV requirements in California and a number of other states in the
absence of CAFE standards, and accounting for that expected compliance
allows us to present a more realistic picture of the state of fuel
economy even in the absence of changes to the CAFE standards.
Reflecting expected compliance with the ZEV mandates in the analysis
improves the accuracy of the baseline in reflecting the state of the
world without the revised CAFE standards, and thus the information
available to decision-makers in their decision as to what standards are
maximum feasible and to the public in commenting on those standards.
---------------------------------------------------------------------------
\28\ Specifically, we include the main provisions of the ACC I,
ACC II, and ACT programs, as discussed further below in Section
II.C.5.a.
---------------------------------------------------------------------------
A number of other improvements and updates have been made to the
analysis since the 2022 final rule based on NHTSA analysis, new data,
and stakeholder meetings for this NPRM. Table I-7 summarizes these, and
they are discussed in much more detail below and in the documents
accompanying this preamble.
Table I-7--Key Analytical Updates From the 2022 Final Rule \29\
---------------------------------------------------------------------------
\29\ For a detailed list of updates to the CAFE Analysis please
see Draft TSD Chapter 1.1.
---------------------------------------------------------------------------
Key Updates
<bullet> Update analysis fleet from MY2020 to MY2022.
<bullet> Addition of HDPUV, and required updates across entire
model.
<bullet> Update technologies considered in the analysis.
[cir] Addition of HCRE, HCRD and updated Diesel technology models.
[cir] Removal of EFR,\30\ DSLIAD,\31\ manual transmissions, AT6L2,
EPS,\32\ IACC,\33\ LDB,\34\ SAX, and some P2 combinations.
---------------------------------------------------------------------------
\30\ Engine Friction Reduction.
\31\ Advanced Diesel Engine with Improvements and Advanced
Cylinder Deactivation.
\32\ Electric Power Steering.
\33\ Improved Accessories.
\34\ Low-drag Brakes.
---------------------------------------------------------------------------
<bullet> User control of additional input parameters.
<bullet> Updated modeling approach to manufacturers' expected
compliance with states' ZEV programs.
<bullet> Expanded accounting for Federal Incentives, such as the
Inflation Reduction Act.
<bullet> Expanded procedures for estimating new vehicle sales and
fleet shares.
<bullet> VMT coefficient updates.
<bullet> Additional output values and options.
NHTSA notes that while the current estimates of costs and benefits
are important considerations and are directed by E.O. 12866, cost-
benefit analysis provides only one informative data point in addition
to the host of considerations that NHTSA must balance by statute when
determining maximum feasible standards. Specifically, for passenger
cars and light trucks, NHTSA is required to consider four statutory
factors--technological feasibility, economic practicability, the effect
of other motor vehicle standards of the Government on fuel economy, and
the need of the United States to conserve energy. For HDPUVs, NHTSA is
required to consider three statutory factors--whether standards are
appropriate, cost-effective, and technologically reasonable--to
determine whether the standards it adopts are maximum feasible.\35\ As
will be discussed further below, NHTSA tentatively concludes that
Alternatives PC2LT4 and HDPUV10 are maximum feasible on the basis of
these respective factors, and the cost-benefit analysis, while
informative, is not one of the statutorily-required factors. NHTSA also
considered several dozen sensitivity cases varying different inputs and
concluded that even when varying inputs resulted in changes to net
benefits or (on rare occasions) changed the relative order of
regulatory alternatives in terms of their net benefits, those changes
were not significant enough to outweigh our tentative conclusion that
Alternatives PC2LT4 and HDPUV10 are maximum feasible.
---------------------------------------------------------------------------
\35\ 49 U.S.C. 32902(k).
---------------------------------------------------------------------------
NHTSA further notes that CAFE and HDPUV standards apply only to new
vehicles, meaning that the costs attributable to new standards are
``front-loaded'' because they result primarily from the application of
fuel-saving technology to new vehicles. By contrast, the impact of new
CAFE and HDPUV standards on fuel consumption and energy savings, air
pollution, and GHGs--and the associated benefits to society--occur over
an extended time, as drivers buy, use, and eventually scrap these new
vehicles. By accounting for many MYs and extending well into the future
to 2050, our analysis accounts for these differing patterns in impacts,
benefits, and costs. Given the front-loaded costs versus longer-term
benefits, it is likely that an analysis extending even further into the
future would find additional net present benefits.
The bulk of our analysis for passenger cars and light trucks
presents a ``model year'' (MY) perspective rather than a ``calendar
year'' (CY) perspective. The MY perspective considers the lifetime
impacts attributable to all passenger cars and light trucks produced
prior to MY 2033, accounting for the operation of these vehicles over
their entire lives (with some MY 2032 vehicles estimated to be in
service as late as 2050). This approach emphasizes the role of the MYs
for which new standards are being proposed, while accounting for the
potential light truck that the proposed standards could induce some
changes in
[[Page 56141]]
the operation of vehicles produced prior to MY 2027 (for passenger cars
and light trucks), and that, for example, some individuals might choose
to keep older vehicles in operation, rather than purchase new ones.
The CY perspective we present includes the annual impacts
attributable to all vehicles estimated to be in service in each CY for
which our analysis includes a representation of the entire registered
passenger car, light truck, and HDPUV fleet. For this proposal, this CY
perspective covers each of CYs 2022-2050, with differential impacts
accruing as early as MY 2022.\36\ Compared to the MY perspective, the
CY perspective emphasizes MYs of vehicles produced in the longer term,
beyond those MYs for which standards are currently being proposed.
---------------------------------------------------------------------------
\36\ For a presentation of effects by CY, please see Chapter
8.2.4.6 of the PRIA.
---------------------------------------------------------------------------
The tables below summarize estimates of selected impacts viewed
from each of these two perspectives, for each of the regulatory
alternatives considered in this proposal.
---------------------------------------------------------------------------
\37\ PRIA Chapter 1, Figure 1-1 provides a graphical comparison
of energy sources and their relative change over the standard
setting years.
\38\ The additional electricity use is attributed to an increase
in the number of PHEVs; PHEV fuel economy is only considered in
charge-sustaining (i.e., gasoline-only) mode in the compliance
analysis, but electricity consumption is computed for the effects
analysis.
\39\ Total Gigawatt hours.
\40\ Climate benefits are based on reductions in CO<INF>2</INF>,
CH<INF>4</INF>, and N<INF>2</INF>O emissions and are calculated
using four different estimates of the social cost of each greenhouse
gas (SC-GHG model average at 2.5 percent, 3 percent, and 5 percent
DRs; 95th percentile at 3 percent DR), which each increase over
time. For the presentational purposes of this table and other
similar summary tables, we show the benefits associated with the
average global SC-GHG at a 3 percent DR, but the agency does not
have a single central SC-GHG point estimate. We emphasize the
importance and value of considering the benefits calculated using
all four SC-GHG estimates. See Section II.G.2 of this preamble for
more information. Where percent DR values are reported in this
table, the social benefits of avoided climate damages are discounted
at 3 percent. The climate benefits are discounted at the same DR as
used in the underlying SC-GHG values for internal consistency.
\41\ For this and similar tables in this section, net benefits
may differ from benefits minus costs due to rounding.
Table I-8--Selected Cumulative Effects--Passenger Cars and Light Trucks--MY and CY Perspectives \37\
----------------------------------------------------------------------------------------------------------------
PC2LT4
PC1LT3 (preferred PC3LT5 PC6LT8
alternative)
----------------------------------------------------------------------------------------------------------------
Avoided Gasoline Consumption (billion gallons)
----------------------------------------------------------------------------------------------------------------
MYs 1983-2032.............................................. -23 -30 -34 -47
CYs 2022-2050.............................................. -65 -88 -115 -207
----------------------------------------------------------------------------------------------------------------
Additional Electricity Consumption (TWh) 38
----------------------------------------------------------------------------------------------------------------
MYs 1983-2032.............................................. 79 99 91 139
CYs 2022-2050.............................................. 218 312 408 975
----------------------------------------------------------------------------------------------------------------
Reduced CO Emissions (mmt)
----------------------------------------------------------------------------------------------------------------
MYs 1983-2032.............................................. -236 -301 -346 -482
CYs 2022-2050.............................................. -654 -885 -1,155 -2,011
----------------------------------------------------------------------------------------------------------------
Table I--9: Selected Cumulative Effects--HDPUVs--CY Perspective
------------------------------------------------------------------------
HDPUV10
HDPUV4 (preferred HDPUV14
alternative)
------------------------------------------------------------------------
Avoided Gasoline Consumption (billion gallons)
------------------------------------------------------------------------
CYs 2022-2050................... -0.1 -2.6 -11.8
------------------------------------------------------------------------
Additional Electricity Consumption (TWh) 39
------------------------------------------------------------------------
CYs 2022-2050................... 1.1 24.2 101.0
------------------------------------------------------------------------
Reduced CO Emissions (mmt)
------------------------------------------------------------------------
CYs 2022-2050................... -0.9 -22.3 -101.3
------------------------------------------------------------------------
Table I-10--Estimated Monetized Costs and Benefits--Passenger Cars and Light Trucks--MY and CY Perspectives by Alternative and Social DR, 3% SC-GHG DR
\40\ \41\
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC1LT3
PC2LT4 (preferred
alternative)
PC3LT5
PC6LT8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Benefits ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR......... 7% DR......... 3% DR......... 7% DR........ 3% DR........ 7% DR........ 3% DR........ 7% DR
MYs 1983-2032................ 59............ 37............ 75............ 47........... 88........... 55........... 120.......... 75
CYs 2022-2050................ 150........... 88............ 203........... 119.......... 261.......... 152.......... 437.......... 252
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 56142]]
Monetized Costs ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR......... 7% DR......... 3% DR......... 7% DR........ 3% DR........ 7% DR........ 3% DR........ 7% DR
MYs 1983-2032................ 47............ 31............ 59............ 39........... 79........... 52........... 105.......... 70
CYs 2022-2050................ 116........... 65............ 157........... 87........... 240.......... 130.......... 386.......... 206
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Net Benefits ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR......... 7% DR......... 3% DR......... 7% DR........ 3% DR........ 7% DR........ 3% DR........ 7% DR
MYs 1983-2032................ 13............ 6............. 17............ 8............ 9............ 3............ 16........... 5
CYs 2022-2050................ 34............ 23............ 46............ 32........... 21........... 21........... 51........... 46
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table I-11--Estimated Monetized Costs and Benefits--HDPUVs--CY Perspective by Alternative and Social DR, 3% SC-GHG DR \42\
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
HDPUV4
HDPUV10 (preferred alternative)
HDPUV14
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Benefits ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR 7% DR 3% DR 7% DR 3% DR 7% DR
CYs 2022-2050................... 0.11.............. 0.07.............. 4.32.............. 2.43.............. 17.43............. 10.12
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Costs ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR 7% DR 3% DR 7% DR 3% DR 7% DR
CYs 2022-2050................... 0.09.............. 0.04.............. 2.07.............. 0.99.............. 9.43.............. 4.67
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Net Benefits ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR 7% DR 3% DR 7% DR 3% DR 7% DR
CYs 2022-2050................... 0.03.............. 0.03.............. 2.25.............. 1.44.............. 8.00.............. 5.45
--------------------------------------------------------------------------------------------------------------------------------------------------------
Our net benefit estimates are likely to be conservative both
because (as discussed above) our analysis only extends to MY 2032 and
CY 2050 (LD) and CY 2050 (HDPUV), and because there are additional
important health, environmental, and energy security benefits that
could not be fully quantified or monetized. Finally, for purposes of
comparing the benefits and costs of proposed CAFE and HDPUV standards
to the benefits and costs of other Federal regulations, policies, and
programs under the Regulatory Right-to-Know Act,\43\ we have computed
``annualized'' benefits and costs, as follows:
---------------------------------------------------------------------------
\42\ Climate benefits are based on reductions in CO<INF>2</INF>,
CH<INF>4</INF>, and N<INF>2</INF>O emissions and are calculated
using four different estimates of the social cost of each greenhouse
gas (SC-GHG model average at 2.5 percent, 3 percent, and 5 percent
DRs; 95th percentile at 3 percent DR), which each increase over
time. For the presentational purposes of this table and other
similar summary tables, we show the benefits associated with the
average global SC-GHG at a 3 percent discount rate, but the agency
does not have a single central SC-GHG point estimate. We emphasize
the importance and value of considering the benefits calculated
using all four SC-GHG estimates. See Section II.G.2 of this preamble
for more information. Where percent DR values are reported in this
table, the social benefits of avoided climate damages are discounted
at 3 percent. The climate benefits are discounted at the same DR as
used in the underlying SC-GHG values for internal consistency.
\43\ See <a href="https://www.whitehouse.gov/omb/information-regulatory-affairs/reports/">https://www.whitehouse.gov/omb/information-regulatory-affairs/reports/</a> for examples of how this reporting is used by the
Federal Government.
\44\ Climate benefits are based on reductions in CO<INF>2</INF>,
CH<INF>4</INF>, and N<INF>2</INF>O emissions and are calculated
using four different estimates of the social cost of each greenhouse
gas (SC-GHG model average at 2.5 percent, 3 percent, and 5 percent
DRs; 95th percentile at 3 percent DR), which each increase over
time. For the presentational purposes of this table and other
similar summary tables, we show the benefits associated with the
average global SC-GHG at a 3 percent discount rate, but the agency
does not have a single central SC-GHG point estimate. We emphasize
the importance and value of considering the benefits calculated
using all four SC-GHG estimates. See Section II.G.2 of this preamble
for more information. Where percent DR values are reported in this
table, the social benefits of avoided climate damages are discounted
at 3 percent. The climate benefits are discounted at the same DR as
used in the underlying SC-GHG values for internal consistency.
\45\ For this and similar tables in this section, net benefits
may differ from benefits minus costs due to rounding.
Table I-12--Estimated Annualized Monetized Costs and Benefits--Passenger Cars and Light Trucks--MY and CY Perspectives by Alternative and Social DR, 3%
SC-GHG DR \44\ \45\
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC1LT3
PC2LT4 (preferred
alternative)
PC3LT5
PC6LT8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Benefits ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR 7% DR 3% DR 7% DR 3% DR 7% DR 3% DR 7% DR
MYs 1983-2032................ 2.3........... 2.7........... 2.9........... 3.4.......... 3.4.......... 4............ 4.7.......... 5.4
CYs 2022-2050................ 7.8........... 7.2........... 10.6.......... 9.7.......... 13.6......... 12.4......... 22.8......... 20.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 56143]]
Monetized Costs ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR 7% DR 3% DR 7% DR 3% DR 7% DR 3% DR 7% DR
MYs 1983-2032................ 1.8........... 2.3........... 2.3........... 2.8.......... 3.1.......... 3.8.......... 4.1.......... 5.1
CYs 2022-2050................ 6.1........... 5.3........... 8.2........... 7.1.......... 12.5......... 10.6......... 20.1......... 16.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Net Benefits ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR......... 7% DR......... 3% DR......... 7% DR........ 3% DR........ 7% DR........ 3% DR........ 7% DR
MYs 1983-2032................ 0.5........... 0.5........... 0.7........... 0.6.......... 0.3.......... 0.2.......... 0.6.......... 0.3
CYs 2022-2050................ 1.8........... 1.9........... 2.4........... 2.6.......... 1.1.......... 1.7.......... 2.7.......... 3.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table I-13--Estimated Annualized Monetized Costs and Benefits--HDPUVs by Alternative and Social DR, CY Perspective, 3% SC-GHG DR \46\
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
HDPUV4
HDPUV10 (preferred alternative)
HDPUV14
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Benefits ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR 7% DR 3% DR 7% DR 3% DR 7% DR
CYs 2022-2050................... 0.006............. 0.006............. 0.23.............. 0.20.............. 0.91.............. 0.82
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Costs ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR 7% DR 3% DR 7% DR 3% DR 7% DR
CYs 2022-2050................... 0.005............. 0.003............. 0.11.............. 0.08.............. 0.49.............. 0.38
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized Net Benefits ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% DR 7% DR 3% DR 7% DR 3% DR 7% DR
CYs 2022-2050................... 0.001............. 0.002............. 0.12.............. 0.12.............. 0.42.............. 0.44
--------------------------------------------------------------------------------------------------------------------------------------------------------
It is also worth emphasizing that, although NHTSA is prohibited
from considering the availability of certain flexibilities in making
our determination about the levels of CAFE standards that would be
maximum feasible, manufacturers have a variety of flexibilities
available to aid their compliance. Section VI of this preamble
summarizes these flexibilities. NHTSA is proposing changes to some of
these flexibilities as shown in Table I-14 and Table I-15.
---------------------------------------------------------------------------
\46\ Climate benefits are based on reductions in CO<INF>2</INF>,
CH<INF>4</INF>, and N<INF>2</INF>O emissions and are calculated
using four different estimates of the social cost of each greenhouse
gas (SC-GHG model average at 2.5 percent, 3 percent, and 5 percent
DRs; 95th percentile at 3 percent DR), which each increase over
time. For the presentational purposes of this table and other
similar summary tables, we show the benefits associated with the
average global SC-GHG at a 3 percent discount rate, but the agency
does not have a single central SC-GHG point estimate. We emphasize
the importance and value of considering the benefits calculated
using all four SC-GHG estimates. See Section II.G.2 of this preamble
for more information. Where percent DR values are reported in this
table, the social benefits of avoided climate damages are discounted
at 3 percent. The climate benefits are discounted at the same DR as
used in the underlying SC-GHG values for internal consistency.
Table I-14--Overview of Compliance Flexibility Changes for CAFE Program (Vehicles With a Gross Vehicle Weight
Rating (GVWR) of 8,500 lbs. or Less and Medium-Duty Passenger Vehicles (MDPVs) With a GVWR Between 8,501 and
10,000 lbs.)
----------------------------------------------------------------------------------------------------------------
Determining average fleet performance
-----------------------------------------------------------------------------------------------------------------
Component General description Proposed changes in NPRM?
----------------------------------------------------------------------------------------------------------------
AC efficiency Fuel Consumption This adjustment to the results from the 2- Yes: Proposed changes to 49
Improvement Value (FCIV). cycle testing accounts for fuel CFR 531.6 and 533.6 to
consumption improvement from technologies eliminate AC efficiency
that improve AC efficiency that are not FCIVs for BEVs starting in
accounted for in the 2-cycle testing. The MY 2027.
AC efficiency FCIV program began in MY
2017.
[[Page 56144]]
Off-cycle FCIV....................... This adjustment to the results from the 2- Yes: Proposing changes to 49
cycle testing accounts for fuel CFR 531.6 and 533.6 to
consumption improvement from technologies eliminate off-cycle menu
that are not accounted for or not fully FCIVs for BEVs and to
accounted for in the 2-cycle testing. The eliminate the 5-cycle and
off-cycle FCIV program began in MY 2017. alternative approvals
starting in MY 2027. PHEVs
retain benefits. Proposing a
60-day response deadline for
requests for information
regarding off-cycle requests
for MY 2025-2026.
Advanced full-size pickup trucks FCIV This adjustment increases a manufacturer's No proposed changes. The
average fuel economy for hybridized and program is set to sunset in
other performance-based technologies for MY 2024 and NHTSA is not
MY 2017 and 2024. proposing to extend it.
----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
\47\ Docket ID NHTSA-2020-0079-0001.
Table I-15--Overview of Compliance for Heavy-Duty Fuel Efficiency Program for Pickup and Vans
[Vehicles with a GVWR between 8,500 and 14,000 lbs.]
----------------------------------------------------------------------------------------------------------------
Determining average fleet performance and certification flexibilities
-----------------------------------------------------------------------------------------------------------------
Component General description Proposed changes in NPRM?
----------------------------------------------------------------------------------------------------------------
Advanced technology credit multiplier In the 2016 Phase 2 Final Rule, EPA and Yes: Proposed technical
NHTSA explained that manufacturers may amendments to accurately
increase advanced technology credits by a reflect changes contemplated
3.5 multiplier for plug-in hybrid by 2016 final rule
electric vehicles, 4.5 for all-electric establishing requirements
vehicles, and 5.5 for fuel cell vehicles for Phase 2. The multiplier
through My 2027 for advanced technology
credits ends after MY 2027.
Innovative and off-cycle technology Manufacturer may generate credits for Yes: Proposed changes to
credits. vehicle or engine families or eliminate innovative and off-
subconfigurations having fuel consumption cycle technology credits for
reductions resulting from technologies heavy-duty pickup trucks and
not reflected in the Greenhouse Gas vans.
Emissions Model (GEM) simulation tool or
in the FTP chassis dynamometer.
Credit Transfers..................... Manufacturers may transfer advanced Yes: Proposed technical
technology credits across averaging sets. amendment to reflect, as
intended in the 2016 Phase 2
rule that advanced
technology credits may not
be transferred across
averaging sets for Phase 2
and beyond.\47\
----------------------------------------------------------------------------------------------------------------
The following sections of this preamble discuss the technical
foundation for the agency's analysis, the regulatory alternatives
considered in this proposal, the estimated effects of the regulatory
alternatives, the basis for NHTSA's tentative conclusion that the
proposed standards are maximum feasible, and NHTSA's approach to
compliance and enforcement. The extensive record supporting NHTSA's
tentative conclusion is documented in this preamble, in the Draft TSD,
the PRIA, the Draft EIS, and the additional materials on NHTSA's
website and in the rulemaking docket. NHTSA seeks comment on all
aspects of this proposal.
[[Page 56145]]
II. Technical Foundation for NPRM Analysis
A. Why is NHTSA conducting this analysis?
When NHTSA proposes new regulations, it generally presents an
analysis that estimates the impacts of those regulations, and the
impacts of other regulatory alternatives. These analyses derive from
statutes such as the Administrative Procedure Act (APA) and NEPA, from
E.O.s (such as E.O. 12866 and 13563), and from other administrative
guidance (e.g., Office of Management and Budget (OMB) Circular A-4).
For CAFE and HDPUV standards, the EPCA, as amended by the EISA,
contains a variety of provisions that NHTSA seeks to account for
analytically. Capturing all of these requirements analytically means
that NHTSA presents an analysis that spans a meaningful range of
regulatory alternatives, that quantifies a range of technological,
economic, and environmental impacts, and that does so in a manner that
accounts for EPCA/EISA's various express requirements for the CAFE and
HDPUV programs (e.g., passenger cars and light trucks must be regulated
separately; the standard for each fleet must be set at the maximum
feasible level in each MY; etc.).
NHTSA's proposed standards are thus supported by extensive analysis
of potential impacts of the regulatory alternatives under
consideration. Along with this preamble, a Draft TSD, a Preliminary
Regulatory Impact Analysis (PRIA), and a Draft EIS, together provide a
detailed enumeration of related methods, estimates, assumptions, and
results. These additional analyses can be found in the rulemaking
docket for this proposal \48\ and on NHTSA's website.\49\
---------------------------------------------------------------------------
\48\ Docket No. NHTSA-2023-0022, which can be accessed at
<a href="https://www.regulations.gov">https://www.regulations.gov</a>.
\49\ See National Highway Traffic Safety Administration. 2023.
Corporate Average Fuel Economy. Available at: <a href="https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy">https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy</a>. (Accessed: May 31,
2023).
---------------------------------------------------------------------------
This section provides further detail on the key features and
components of NHTSA's analysis. It also describes how NHTSA's analysis
has been constructed specifically to reflect governing law applicable
to CAFE and HDPUV standards (which may vary between programs). Finally,
the discussion reviews how NHTSA's analysis has been expanded and
improved in response to comments received on the 2021 proposal,\50\ as
well as additional work conducted over the last year. Further
improvements may be made in the future based on comments received to
this proposal, on the 2021 National Academies of Sciences (NAS)
Report,\51\ and on other work generally previewed in these rulemaking
documents. The analysis for this proposal aided NHTSA in implementing
its statutory obligations, including the weighing of various
considerations, by reasonably informing decision-makers about the
estimated effects of choosing different regulatory alternatives.
---------------------------------------------------------------------------
\50\ 86 FR 49602 (Sept. 3, 2021).
\51\ National Academies of Sciences, Engineering, and Medicine.
2021. Assessment of Technologies for Improving Light-Duty Vehicle
Fuel Economy--2025-2035. Washington, DC. The National Academies
Press. Available at: <a href="https://nap.nationalacademies.org/catalog/26092/assessment-of-technologies-for-improving-light-duty-vehicle-fuel-economy-2025-2035">https://nap.nationalacademies.org/catalog/26092/assessment-of-technologies-for-improving-light-duty-vehicle-fuel-economy-2025-2035</a> (Accessed: May 31, 2023) and for hard-copy
review at DOT headquarters.
---------------------------------------------------------------------------
1. What are the key components of NHTSA's analysis?
NHTSA's analysis makes use of a range of data (i.e., observations
of things that have occurred), estimates (i.e., things that may occur
in the future), and models (i.e., methods for making estimates). Two
examples of data include (1) records of actual odometer readings used
to estimate annual mileage accumulation at different vehicle ages and
(2) CAFE compliance data used as the foundation for the ``analysis
fleets'' containing, among other things, production volumes and fuel
economy/fuel efficiency levels of specific configurations of specific
vehicle models produced for sale in the U.S. Two examples of estimates
include (1) forecasts of future Gross Domestic Product (GDP) growth
used, with other estimates, to forecast future vehicle sales volumes
and (2) technology cost estimates, which include estimates of the
technologies' ``direct cost,'' marked up by a ``retail price
equivalent'' (RPE) factor used to estimate the ultimate cost to
consumers of a given fuel-saving technology, and an estimate of ``cost
learning effects'' (i.e., the tendency that it will cost a manufacturer
less to apply a technology as the manufacturer gains more experience
doing so).
NHTSA uses the CAFE Compliance and Effects Modeling System (usually
shortened to the ``CAFE Model'') to estimate manufacturers' potential
responses to new CAFE, HDPUV, and GHG standards and to estimate various
impacts of those responses. DOT's Volpe National Transportation Systems
Center (often simply referred to as the ``Volpe Center'') develops,
maintains, and applies the model for NHTSA. NHTSA has used the CAFE
Model to perform analyses supporting every CAFE rulemaking since 2001.
The 2016 ``Phase 2'' rulemaking \52\ establishing the most recent HDPUV
standards also used the CAFE Model for analysis.
---------------------------------------------------------------------------
\52\ 81 FR 73478 (October 25, 2016).
---------------------------------------------------------------------------
The basic design of the CAFE Model is as follows: The system first
estimates how vehicle manufacturers might respond to a given regulatory
scenario, and from that potential compliance solution, the system
estimates what impact that response will have on fuel consumption,
emissions, safety impacts, and economic externalities. In a highly
summarized form, Figure II-1 shows the basic categories of CAFE Model
procedures and the sequential flow between different stages of the
modeling. The diagram does not present specific model inputs or
outputs, as well as many specific procedures and model interactions.
The model documentation accompanying this proposal presents these
details, and Chapter 1 of the Draft TSD contains a more detailed
version of this flow diagram for readers who are interested.
BILLING CODE 4910-59-P
[[Page 56146]]
[GRAPHIC] [TIFF OMITTED] TP17AU23.004
BILLING CODE 4910-59-C
More specifically, the model may be characterized as an integrated
system of models. For example, one model estimates manufacturers'
responses, another estimates resultant changes in total vehicle sales,
and still another estimates resultant changes in fleet turnover (i.e.,
scrappage). Additionally, and importantly, the model does not determine
the form or stringency of the standards. Instead, the model applies
inputs specifying the form and stringency of standards to be analyzed
and produces outputs showing the impacts of manufacturers working to
meet those standards, which become part of the basis for comparing
different potential stringencies. A regulatory scenario, meanwhile,
involves specification of the form, or shape, of the standards (e.g.,
flat standards, or linear or logistic attribute-based standards), scope
of passenger car, light truck, and HDPUV regulatory classes, and
stringency of the CAFE or HDPUV standards for each MY to be analyzed.
For example, a regulatory scenario may define CAFE or HDPUV standards
for a particular class of vehicles that increase in stringency by a
given percent per year for a given number of consecutive years.
Manufacturer compliance simulation and the ensuing effects
estimation, collectively referred to as compliance modeling, encompass
numerous subsidiary elements. Compliance simulation begins with a
detailed user-provided initial forecast of the vehicle models offered
for sale during the simulation period.\53\ The compliance simulation
then attempts to bring each manufacturer into compliance with the
standards defined by the regulatory scenario contained within an input
file developed by the user.\54\
---------------------------------------------------------------------------
\53\ Because the CAFE Model is publicly available, anyone can
develop their own initial forecast (or other inputs) for the model
to use. The DOT-developed Market Data Input file that contains the
forecast for this proposal is available on NHTSA's website at
<a href="https://www.nhtsa.gov/corporate-average-fuel-economy/cafe-compliance-and-effects-modeling-system">https://www.nhtsa.gov/corporate-average-fuel-economy/cafe-compliance-and-effects-modeling-system</a>.
\54\ With appropriate inputs, the model can also be used to
estimate impacts of manufacturers' potential responses to new
CO<INF>2</INF> standards and to California's ZEV program.
---------------------------------------------------------------------------
Estimating impacts involves calculating resultant changes in new
vehicle costs, estimating a variety of costs (e.g., for fuel) and
effects (e.g., CO<INF>2</INF> emissions from fuel combustion) occurring
as vehicles are driven over their lifetimes before eventually being
scrapped, and estimating the monetary value of these effects.
Estimating impacts also involves consideration of consumer responses--
e.g., the impact of vehicle fuel economy/efficiency, operating costs,
and vehicle price on consumer demand for passenger cars, light trucks,
and HDPUVs. Both basic analytical elements involve the
[[Page 56147]]
application of many analytical inputs. Many of these inputs are
developed outside of the model and not by the model. For example, the
model applies fuel prices; it does not estimate fuel prices.
NHTSA also uses EPA's Motor Vehicle Emission Simulator (MOVES)
model to estimate ``vehicle'' or ``downstream'' emission factors (EF)
for criteria pollutants,\55\ and uses four Department of Energy (DOE)
and DOE-sponsored models to develop inputs to the CAFE Model, including
three developed and maintained by DOE's Argonne National Laboratory
(ANL). The agency uses the DOE Energy Information Administration's
(EIA's) National Energy Modeling System (NEMS) to estimate fuel
prices,\56\ and uses ANL's Greenhouse gases, Regulated Emissions, and
Energy use in Transportation (GREET) model to estimate emissions rates
from fuel production and distribution processes.\57\ DOT also sponsored
DOE/ANL to use ANL's Autonomie full-vehicle modeling and simulation
system to estimate the fuel economy/efficiency impacts for over a
million combinations of technologies and vehicle types.\58\ The Draft
TSD and PRIA describe details of our use of these models. In addition,
as discussed in the Draft EIS accompanying this proposal, DOT relied on
a range of climate models to estimate impacts on climate, air quality,
and public health. The Draft EIS discusses and describes the use of
these models.
---------------------------------------------------------------------------
\55\ See <a href="https://www.epa.gov/moves">https://www.epa.gov/moves</a>. This proposal uses version
MOVES3 (the latest version at the time of analysis), available at
<a href="https://www.epa.gov/moves/latest-version-motor-vehicle-emission-simulator-moves">https://www.epa.gov/moves/latest-version-motor-vehicle-emission-simulator-moves</a>.
\56\ See <a href="https://www.eia.gov/outlooks/aeo/">https://www.eia.gov/outlooks/aeo/</a>. This proposal uses
fuel prices estimated using the Annual Energy Outlook (AEO) 2022
version of NEMS (see <a href="https://www.eia.gov/outlooks/aeo/tables_ref.php">https://www.eia.gov/outlooks/aeo/tables_ref.php</a>.).
\57\ Information regarding GREET is available at <a href="https://greet.es.anl.gov/">https://greet.es.anl.gov/</a>. This proposal uses the 2022 version of GREET.
\58\ As part of the ANL simulation effort, individual technology
combinations simulated in Autonomie were paired with ANL's BatPaC
model to estimate the battery cost associated with each technology
combination based on characteristics of the simulated vehicle and
its level of electrification. Information regarding ANL's BatPaC
model is available at <a href="https://www.anl.gov/cse/batpac-model-software">https://www.anl.gov/cse/batpac-model-software</a>.
In addition, the impact of engine technologies on fuel consumption,
torque, and other metrics was characterized using GT-POWER
simulation modeling in combination with other engine modeling that
was conducted by IAV Automotive Engineering, Inc. (IAV). The engine
characterization ``maps'' resulting from this analysis were used as
inputs for the Autonomie full-vehicle simulation modeling.
Information regarding GT-POWER is available at <a href="https://www.gtisoft.com/gt-power/">https://www.gtisoft.com/gt-power/</a>.
---------------------------------------------------------------------------
To prepare for analysis supporting this proposal, DOT has refined
and expanded the CAFE Model through ongoing development. Examples of
such changes, some informed by past external comment, made since 2022
include: \59\
---------------------------------------------------------------------------
\59\ A more detailed list can be found in Chapter 1.1 of the
Draft TSD.
<bullet> Addition of HDPUV, and associated required updates across
entire model
<bullet> Updated technologies considered in the analysis
[cir] Addition of HCRE, HCRD and updated diesel technology models
\60\
---------------------------------------------------------------------------
\60\ See technologies descriptions in Draft TSD Chapter 3.
---------------------------------------------------------------------------
[cir] Removal of EFR, DSLIAD, manual transmissions, AT6L2, EPS,
IACC, LDB, SAX, and some P2 combinations \61\
---------------------------------------------------------------------------
\61\ See technologies description in 87 FR 25710 (May 2, 2022).
---------------------------------------------------------------------------
<bullet> User control of additional input parameters
<bullet> Updated modeling approach to manufacturers' expected
compliance with states' ZEV programs
<bullet> Expanded accounting for Federal incentives, such as the IRA
<bullet> Expanded procedures for estimating new vehicle sales and fleet
shares
<bullet> VMT coefficient updates
These changes reflect DOT's long-standing commitment to ongoing
refinement of its approach to estimating the potential impacts of new
CAFE and HDPUV standards. The Draft TSD elaborates on these changes to
the CAFE Model, as well as changes to inputs to the model for this
analysis.
NHTSA underscores that this analysis uses the CAFE Model in a
manner that explicitly accounts for the fact that in producing a single
fleet of vehicles for sale in the United States, manufacturers make
decisions that consider the combination of CAFE/HDPUV standards, EPA
GHG standards, and various policies set at sub-national levels (e.g.,
ZEV sales mandates, set by California and adopted by many other
states). These regulations have important structural and other
differences that affect the strategy a manufacturer could pursue in
designing a fleet that complies with each of the above. As explained,
NHTSA's analysis reflects a number of statutory and regulatory
requirements applicable to CAFE/HDPUV and EPA GHG standard-setting. As
stated previously, NHTSA will coordinate with EPA to optimize the
effectiveness of NHTSA's standards while minimizing compliance costs,
informed by public comments from all stakeholders and consistent with
the statutory factors. NHTSA seeks input to help inform these
objectives.
2. How do requirements under EPCA/EISA shape NHTSA's analysis?
EPCA contains multiple requirements governing the scope and nature
of CAFE standard setting. Some of these have been in place since EPCA
was first signed into law in 1975, and some were added in 2007, when
Congress passed EISA and amended EPCA. EISA also gave NHTSA authority
to set standards for HDPUVs, and that authority was generally less
constrained than for CAFE standards. NHTSA's modeling and analysis to
inform standard setting is guided and shaped by these statutory
requirements. EPCA/EISA requirements regarding the technical
characteristics of CAFE and HDPUV standards and the analysis thereof
include, but are not limited to, the following:
Corporate Average Standards: Section 32902 of 49 U.S.C. requires
standards for passenger cars, light trucks, and HDPUVs to be corporate
average standards, applying to the average fuel economy/efficiency
levels achieved by each corporation's fleets of vehicles produced for
sale in the U.S.\62\ The CAFE Model calculates the CAFE and
CO<INF>2</INF> levels of each manufacturer's fleets based on estimated
production volumes and characteristics, including fuel economy/
efficiency levels, of distinct vehicle models that could be produced
for sale in the U.S.
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\62\ This differs from certain other types of vehicle standards,
such as safety standards. For example, every vehicle produced for
sale in the U.S. must, on its own, meet all applicable Federal motor
vehicle safety standards (FMVSS), but no vehicle produced for sale
must, on its own, meet Federal fuel economy or efficiency standards.
Rather, each manufacturer is required to produce a mix of vehicles
that, taken together, achieve an average fuel economy/efficiency
level no less than the applicable minimum level.
---------------------------------------------------------------------------
Separate Standards for Passenger Cars, Light Trucks, and HDPUVs:
Section 32902 of 49 U.S.C. requires the Secretary of Transportation to
set CAFE standards separately for passenger cars and light trucks and
allows the Secretary to prescribe separate standards for different
classes of heavy-duty (HD) vehicles like HDPUVs. The CAFE Model
accounts separately for differentiated standards and compliance
pathways for passenger cars, light trucks, and HDPUVs when it analyzes
CAFE/HDPUV or GHG standards.
Attribute-Based Standards: Section 32902 of 49 U.S.C. requires the
Secretary of Transportation to define CAFE standards as mathematical
functions expressed in terms of one or more vehicle attributes related
to fuel economy, and NHTSA has extended this approach to HDPUV
standards as well through regulation. This means that for
[[Page 56148]]
a given manufacturer's fleet of vehicles produced for sale in the U.S.
in a given regulatory class and MY, the applicable minimum CAFE
requirement (or maximum HDPUV fuel consumption requirement) is computed
based on the applicable mathematical function, and the mix and
attributes of vehicles in the manufacturer's fleet. The CAFE Model
accounts for such functions and vehicle attributes explicitly.
Separately Defined Standards for Each Model Year: Section 32902 of
49 U.S.C. requires the Secretary of Transportation (by delegation,
NHTSA) to set CAFE standards (separately for passenger cars and light
trucks) \63\ at the maximum feasible levels in each MY. Fuel efficiency
levels for HDPUVs must also be set at the maximum feasible level, in
tranches of (at least) 3 MYs at a time. The CAFE Model represents each
MY explicitly, and accounts for the production relationships between
MYs.\64\
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\63\ Chaper 329 of title 49 of the U.S. Code uses the term
``non-passenger automobiles,'' while NHTSA uses the term ``light
trucks'' in its CAFE regulations. The terms' meanings are identical.
\64\ For example, a new engine first applied to a given mode/
configuration in MY 2027 will most likely persist in MY 2028 of that
same vehicle model/configuration, in order to reflect the fact that
manufacturers do not apply brand-new engines to a given vehicle
model every single year. The CAFE Model is designed to account for
these real-world factors.
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Separate Compliance for Domestic and Imported Passenger Car Fleets:
Section 32904 of 49 U.S.C. requires the EPA Administrator to determine
CAFE compliance separately for each manufacturer's fleets of domestic
passenger cars and imported passenger cars, which manufacturers must
consider as they decide how to improve the fuel economy of their
passenger car fleets.\65\ The CAFE Model accounts explicitly for this
requirement when simulating manufacturers' potential responses to CAFE
standards, and combines any given manufacturer's domestic and imported
cars into a single fleet when simulating that manufacturer's potential
response to GHG standards (because EPA does not have separate standards
for domestic and imported passenger cars).
---------------------------------------------------------------------------
\65\ There is no such requirement for light trucks or HDPUVs.
---------------------------------------------------------------------------
Minimum CAFE Standards for Domestic Passenger Car Fleets: Section
32902 of 49 U.S.C. requires that domestic passenger car fleets meet a
minimum standard, which is calculated as 92 percent of the industry-
wide average level required under the applicable attribute-based CAFE
standard, as projected by the Secretary at the time the standard is
promulgated. The CAFE Model accounts explicitly for this requirement
when simulating manufacturer compliance with CAFE standards and sets
this requirement aside when simulating manufacturer compliance with GHG
standards.
Civil Penalties for Noncompliance: Section 32912 of 49 U.S.C. (and
implementing regulations) prescribes a rate (in dollars per tenth of a
mpg) at which the Secretary is to levy civil penalties if a
manufacturer fails to comply with a passenger car or light truck CAFE
standard for a given fleet in a given MY, after considering available
credits. Some manufacturers have historically demonstrated a
willingness to pay civil penalties rather than achieving full numerical
compliance across all fleets. The CAFE Model calculates civil penalties
(adjusted for inflation) for CAFE shortfalls and provides means to
estimate that a manufacturer might stop adding fuel-saving technologies
once continuing to do so would effectively be more ``expensive'' (after
accounting for fuel prices and buyers' willingness to pay for fuel
economy) than paying civil penalties. The CAFE Model does not allow
civil penalty payment as an option for EPA's GHG standards or NHTSA's
HDPUV standards.\66\
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\66\ While civil penalties are an option in the HDPUV fleet, the
penalties for noncompliance are significantly higher, and thus
manufactures will try to avoid paying them. Setting the model to
disallow civil penalties acts to best simulate this behavior. If the
model does find no option other than ``paying a civil penalty'' in
the HDPUV fleet, this cost should be considered a proxy for credit
purchase. NHTSA seeks comment on whether and how to model civil
penalties for HDPUVs for the final rule.
---------------------------------------------------------------------------
Dual-Fueled and Dedicated Alternative Fuel Vehicles: For purposes
of calculating passenger car and light truck CAFE levels used to
determine compliance, 49 U.S.C. 32905 and 32906 specify methods for
calculating the fuel economy levels of vehicles operating on
alternative fuels to gasoline or diesel, such as electricity. In some
cases, after MY 2020, methods for calculating AFV fuel economy are
governed by regulation. The CAFE Model is able to account for these
requirements explicitly for each vehicle model. However, 49 U.S.C.
32902 prohibits consideration of the fuel economy of dedicated AFVs,
and requires that dual-fueled AFVs' fuel economy, such as plug-in
electric vehicle (EVs), be calculated as though they ran only on
gasoline or diesel, when NHTSA determines the maximum feasible fuel
economy level that manufacturers can achieve in a given year for which
NHTSA is establishing CAFE standards. The CAFE Model therefore has an
option to be run in a manner that excludes the additional application
of dedicated AFVs and counts only the gasoline fuel economy of dual-
fueled AFVs, in MYs for which maximum feasible standards are under
consideration. As allowed under NEPA for analysis appearing in
Environmental Impact Statements (EIS) that help inform decision makers
about the environmental impacts of CAFE standards, the CAFE Model can
also be run without this analytical constraint. The CAFE Model does
account for dedicated and dual-fueled AFVs when simulating
manufacturers' potential responses to EPA's GHG standards because the
Clean Air Act (CAA), under which the EPA derives its authority to set
GHG standards for motor vehicles, contains no restrictions in using
AFVs for compliance. There are no specific statutory directions in EISA
with regard to dedicated and dual-fueled AFV fuel efficiency for
HDPUVs, so the CAFE Model reflects relevant regulatory provisions by
calculating fuel consumption directly per 49 U.S.C. 32905 and 32906
specified methods.
ZEV Mandates: The CAFE Model can simulate manufacturers' compliance
with state-level ZEV mandates applicable in California and ``Section
177'' \67\ states. This approach involves identifying specific vehicle
model/configurations that could be replaced with BEVs and converting to
BEVs only enough vehicle models to meet the manufacturer's compliance
obligations under state-level ZEV mandates, before beginning to
consider the potential that other technologies could be applied toward
compliance with CAFE, HDPUV, or GHG standards.
---------------------------------------------------------------------------
\67\ The term ``Section 177'' states refers to states which have
elected to adopt California's standards in lieu of Federal
requirements, as allowed under section 177 of the CAA.
---------------------------------------------------------------------------
Creation and Use of Compliance Credits: Section 32903 of 49 U.S.C.
provides that manufacturers may earn CAFE ``credits'' by achieving a
CAFE level beyond that required of a given passenger car or light truck
fleet in a given MY and specifies how these credits may be used to
offset the amount by which a different fleet falls short of its
corresponding requirement. These provisions allow credits to be
``carried forward'' and ``carried back'' between MYs, transferred
between regulated classes (domestic passenger cars, imported passenger
cars, and light trucks), and traded between manufacturers. However,
credit use for passenger car and light truck compliance is also subject
to specific statutory limits. For example, CAFE compliance credits can
be carried
[[Page 56149]]
forward a maximum of five MYs and carried back a maximum of three MYs.
Also, EPCA/EISA caps the amount of credits that can be transferred
between passenger car and light truck fleets and prohibits
manufacturers from applying traded or transferred credits to offset a
failure to achieve the applicable minimum standard for domestic
passenger cars. The CAFE Model can simulate manufacturers' potential
use of CAFE credits carried forward from prior MYs or transferred from
other fleets.\68\ Section 32902 of 49 U.S.C. prohibits consideration of
manufacturers' potential application of CAFE compliance credits when
determining the maximum feasible fuel economy level that manufacturers
can achieve for their fleets of passenger cars and light trucks. The
CAFE Model can be operated in a manner that excludes the application of
CAFE credits for a given MY under consideration for standard setting,
and NHTSA operated the model with that constraint for the purpose of
determining the appropriate CAFE standard for passenger cars and light
trucks. No such statutory restrictions exist for setting HDPUV
standards. For modeling EPA's GHG standards, the CAFE Model does not
limit transfers because the CAA does not limit them. Insofar as the
CAFE Model can be exercised in a manner that simulates trading of GHG
compliance credits, such simulations treat trading as unlimited.\69\
---------------------------------------------------------------------------
\68\ The CAFE Model does not explicitly simulate the potential
that manufacturers would carry CAFE or GHG credits back (i.e.,
borrow) from future model years, or acquire and use CAFE compliance
credits from other manufacturers. At the same time, because EPA has
elected not to limit credit trading, the CAFE Model can be exercised
(for purposes of evaluating GHG standards) in a manner that
simulates unlimited (a.k.a. ``perfect'') GHG compliance credit
trading throughout the industry (or, potentially, within discrete
trading ``blocs''). For purposes of analyzing CAFE standards, NHTSA
believes it is challenging to predict precisely how manufacturers
may choose to use these particular flexibilities in the future: for
example, while it is reasonably foreseeable that a manufacturer who
over-complies in one year may ``coast'' through several subsequent
years relying on that over-compliance rather than making further
technology improvements, it is harder to know whether manufacturers
will rely on future technology investments to offset prior-year
shortfalls, or whether/how manufacturers will trade credits with
market competitors rather than making their own technology
investments. Historically, carry-back and trading have been much
less utilized than carry-forward, for a variety of reasons including
higher risk and preference not to `pay competitors to make fuel
economy improvements we should be making' (to paraphrase one
manufacturer), although NHTSA recognizes that carry-back and trading
are used more frequently when standards increase in stringency more
rapidly. Given these dynamics, and given also the fact that the
agency has yet to resolve some of the analytical challenges
associated with simulating use of these flexibilities, the agency
has decided to support this proposal with a conservative analysis
that sets aside the potential that manufactures would depend widely
on borrowing and trading--not to mention that, for purposes of
determining maximum feasible CAFE standards, statute prohibits NHTSA
from considering the trading, transferring, or availability of
credits (see 49 U.S.C. 32902(h)). While compliance costs in real
life may be somewhat different from what is modeled in the
rulemaking record as a result of this decision, that is broadly true
no matter what, and the agency does not believe that the difference
would be so great that it would change the policy outcome.
Furthermore, a manufacturer employing a trading strategy would
presumably do so because it represents a lower-cost compliance
option. Thus, the estimates derived from this modeling approach are
likely to be conservative in this respect, with real-world
compliance costs likely being lower.
\69\ To avoid making judgments about possible future trading
activity, the model simulates trading by combining all manufacturers
into a single entity, so that the most cost-effective choices are
made for the fleet as a whole.
---------------------------------------------------------------------------
Statutory Basis for Stringency: Section 32902 of 49 U.S.C. requires
the Secretary of Transportation (by delegation, NHTSA) to set CAFE
standards for passenger cars and light trucks at the maximum feasible
levels that manufacturers can achieve in a given MY, considering
technological feasibility, economic practicability, the need of the
United States to conserve energy, and the impact of other motor vehicle
standards of the Government on fuel economy. For HDPUV standards, which
must also achieve the maximum feasible improvement, the similar yet
distinct factors of appropriateness, cost-effectiveness, and
technological feasibility must be considered. EPCA/EISA authorizes the
Secretary of Transportation (by delegation, NHTSA) to interpret these
factors, and as the Department's interpretation has evolved, NHTSA has
continued to expand and refine its qualitative and quantitative
analysis to account for these statutory factors. For example, one of
the ways that economic practicability considerations are incorporated
into the analysis is through the technology effectiveness
determinations: the Autonomie simulations reflect the agency's judgment
that it would not be economically practicable (nor, for HDPUVs,
appropriate) for a manufacturer to ``split'' an engine shared among
many vehicle model/configurations into myriad versions each optimized
to a single vehicle model/configuration.
National Environmental Policy Act: NEPA requires NHTSA to consider
the environmental impacts of its actions in its decision-making
processes, including for CAFE standards. The Draft EIS accompanying
this proposal documents changes in emission inventories as estimated
using the CAFE Model, but also documents corresponding estimates--based
on the application of other models documented in the Draft EIS--of
impacts on the global climate, on air quality, and on human health.
Other Aspects of Compliance: Beyond these statutory requirements
applicable to DOT, EPA, or both are a number of specific technical
characteristics of CAFE, HDPUV, and/or GHG regulations that are also
relevant to the construction of this analysis, like the ``off-cycle''
technologies fuel economy/emissions improvements that apply for both
CAFE and GHG compliance. Although too little information is available
to account for these provisions explicitly in the same way that NHTSA
has accounted for other technologies, the CAFE Model includes and makes
use of inputs reflecting NHTSA's expectations regarding the extent to
which manufacturers may earn such credits, along with estimates of
corresponding costs. Similarly, the CAFE Model includes and makes use
of inputs regarding credits EPA has elected to allow manufacturers to
earn toward GHG levels (not CAFE or HDPUV) based on the use of air
conditioner refrigerants with lower global warming potential, or on the
application of technologies to reduce refrigerant leakage. In addition,
the CAFE Model accounts for EPA ``multipliers'' for certain AFVs, based
on current regulatory provisions or on alternative approaches. Although
these are examples of regulatory provisions that arise from the
exercise of discretion rather than specific statutory mandate, they can
materially impact outcomes.
3. What updated assumptions does the current model reflect as compared
to the 2022 final rule?
Besides the updates to the CAFE Model described above, any analysis
of regulatory actions that will be implemented several years in the
future, and whose benefits and costs accrue over decades, requires a
large number of assumptions. Over such time horizons, many, if not
most, of the relevant assumptions in such an analysis are inevitably
uncertain. Each successive CAFE analysis seeks to update assumptions to
better reflect the current state of the world and the best current
estimates of future conditions.
A number of assumptions have been updated since the 2022 final
rule. As discussed below, NHTSA has updated its ``analysis fleet'' from
a MY 2020 reference to a MY 2022 reference for passenger cars and light
trucks and has built an updated HDPUV analysis fleet (the last HDPUV
analysis fleet was built in 2016). NHTSA has also updated estimates of
manufacturers' compliance credit ``holdings,'' updated fuel price
projections to reflect the U.S. EIA's 2022 Annual Energy Outlook (AEO),
updated
[[Page 56150]]
projections of GDP and related macroeconomic measures, and updated
projections of future highway travel. While NHTSA would have made these
updates as a matter of course, we note that the ongoing global economic
recovery and the ongoing war in Ukraine have impacted major analytical
inputs such as fuel prices, GDP, vehicle production and sales, and
highway travel. Many inputs remain uncertain, and NHTSA has conducted
sensitivity analyses around many inputs to attempt to capture some of
that uncertainty. These and other updated analytical inputs are
discussed in detail in the Draft TSD and PRIA.
Additionally, E.O. 13990 required the formation of an Interagency
Working Group (IWG) on the Social Cost (SC) of GHGs and charged this
body with updating estimates of the SCs of carbon, nitrous oxide, and
methane (CH<INF>4</INF>). As discussed in the TSD, NHTSA has followed
DOT's determination that the values developed in the IWG's interim
guidance are the most consistent with the best available science and
economics and are the most appropriate estimates to use in the analysis
of this proposal. Those estimates of costs per ton of emissions (or
benefits per ton of emissions reductions) are considerably greater than
those applied in the analysis supporting the 2020 final rule. Even
still, the estimates NHTSA is now using are not able to fully quantify
and monetize a number of important categories of climate damages;
because of those omitted damages and other methodological limits, DOT
believes its values for SC-GHG are conservative underestimates.
B. What is NHTSA analyzing?
NHTSA is analyzing the effects of different potential CAFE and
HDPUV standards on industry, consumers, society, and the world at
large. These different potential standards are identified as regulatory
alternatives, and amongst the regulatory alternatives, NHTSA identifies
which ones the agency is proposing. As in the past several CAFE
rulemakings and in the Phase 2 HDPUV rulemaking, NHTSA is proposing to
establish attribute-based CAFE and HDPUV standards defined by a
mathematical function of vehicle footprint (which has an observable
correlation with fuel economy) and a towing-and-hauling-based WF
respectively.\70\ EPCA, as amended by EISA, expressly requires that
CAFE standards for passenger cars and light trucks be based on one or
more vehicle attributes related to fuel economy, and be expressed in
the form of a mathematical function.\71\ The statute gives NHTSA
discretion as to how to structure standards for HDPUVs, and NHTSA
continues to believe that attribute-based standards expressed as a
mathematical function remain appropriate for those vehicles as well,
given their similarity in many ways to light trucks. Thus, the proposed
standards (and the regulatory alternatives) for passenger cars and
light trucks take the form of fuel economy targets expressed as
functions of vehicle footprint (the product of vehicle wheelbase and
average track width) that are separate for passenger cars and light
trucks, and the proposed standards and alternatives for HDPUVs take the
form of fuel consumption targets expressed as functions of vehicle WF
(which is in turn a function of towing and hauling capabilities).
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\70\ Vehicle footprint is the vehicle's wheelbase times average
track width (or more simply, the length and width beween the
vehicle's four wheels). The HDPUV FE towing-and-hauling-based ``WF''
metric is based on a vehicle's payload and towing capabilities, with
an added adjustment for 4-wheel drive vehicles.
\71\ 49 U.S.C. 32902(a)(3)(A).
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For passenger cars and light trucks, under the footprint-based
standards, the function defines a fuel economy performance target for
each unique footprint combination within a car or truck model type.
Using the functions, each manufacturer thus will have a CAFE average
standard for each year that is almost certainly unique to each of its
fleets,\72\ based upon the footprint and production volumes of the
vehicle models produced by that manufacturer. A manufacturer will have
separate footprint-based standards for cars and for trucks, consistent
with 49 U.S.C. 32902(b)'s direction that NHTSA must set separate
standards for cars and for trucks. The functions are mostly sloped, so
that generally, larger vehicles (i.e., vehicles with larger footprints)
will be subject to lower mpg targets than smaller vehicles. This is
because smaller vehicles are generally more capable of achieving higher
levels of fuel economy, mostly because they tend not to have to work as
hard (and therefore to require as much energy) to perform their driving
task. Although a manufacturer's fleet average standard could be
estimated throughout the MY based on the projected production volume of
its vehicle fleet (and are estimated as part of EPA's certification
process), the standards with which the manufacturer must comply are
determined by its final model year (FMY) production figures. A
manufacturer's calculation of its fleet average standards, as well as
its fleets' average performance at the end of the MY, will thus be
based on the production-weighted average target and performance of each
model in its fleet.\73\
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\72\ EPCA/EISA requires NHTSA and EPA to separate passenger cars
into domestic and import passenger car fleets for CAFE compliance
purposes (49 U.S.C. 32904(b)), whereas EPA combines all passenger
cars into one fleet for GHG compliance purposes.
\73\ As discussed in prior rulemakings, a manufacturer may have
some vehicle models that exceed their target and some that are below
their target. Compliance with a fleet average standard is determined
by comparing the fleet average standard (based on the production-
weighted average of the target levels for each model) with fleet
average performance (based on the production-weighted average of the
performance of each model). This is inherent in the statutory
structure of CAFE, which requires NHTSA to set corporate average
standards.
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For passenger cars, consistent with prior rulemakings, NHTSA is
proposing to define fuel economy targets as shown in Equation II-1.
BILLING CODE 4910-59-P
[GRAPHIC] [TIFF OMITTED] TP17AU23.005
Where:
TARGET<INF>FE</INF> is the fuel economy target (in mpg) applicable
to a specific vehicle model type with a unique footprint
combination,
a is a minimum fuel economy target (in mpg),
b is a maximum fuel economy target (in mpg),
c is the slope (in gallons per mile (or gpm) per square foot) of a
line relating fuel
[[Page 56151]]
consumption (the inverse of fuel economy) to footprint, and
d is an intercept (in gpm) of the same line.
Here, MIN and MAX are functions that take the minimum and maximum
values, respectively, of the set of included values. For example,
MIN[40, 35] = 35 and MAX(40, 25) = 40, such that MIN[MAX(40, 25), 35] =
35.
For the Preferred Alternative, this equation is represented
graphically as the curves in Figure II-2.
[GRAPHIC] [TIFF OMITTED] TP17AU23.006
For light trucks, also consistent with prior rulemakings, NHTSA is
proposing to define fuel economy targets as shown in Equation II-2.
[GRAPHIC] [TIFF OMITTED] TP17AU23.007
Where:
TARGET<INF>FE</INF> is the fuel economy target (in mpg) applicable
to a specific vehicle model type with a unique footprint
combination,
a, b, c, and d are as for passenger cars, but taking values specific
to light trucks,
e is a second minimum fuel economy target (in mpg),
f is a second maximum fuel economy target (in mpg),
g is the slope (in gpm per square foot) of a second line relating
fuel consumption (the inverse of fuel economy) to footprint, and
h is an intercept (in gpm) of the same second line.
For the Preferred Alternative, this equation is represented
graphically as the curves in Figure II-3.
[[Page 56152]]
[GRAPHIC] [TIFF OMITTED] TP17AU23.008
Although the general model of the target function equation is the
same for passenger cars and light trucks, and the same for each MY, the
parameters of the function equation differ for cars and trucks. The
actual parameters for both the Preferred Alternative and the other
regulatory alternatives are presented in Section III.
The required CAFE level applicable to a passenger car (either
domestic or import) or light truck fleet in a given MY is determined by
calculating the production-weighted harmonic average of fuel economy
targets applicable to specific vehicle model configurations in the
fleet, as shown in Equation II-3.
[GRAPHIC] [TIFF OMITTED] TP17AU23.009
Where:
CAFE<INF>required</INF> is the CAFE level the fleet is required to
achieve,
i refers to specific vehicle model/configurations in the fleet,
PRODUCTION<INF>i</INF> is the number of model configuration i
produced for sale in the U.S., and
TARGET<INF>FE, i</INF> is the fuel economy target (as defined above)
for model configuration i.
For HDPUVs, NHTSA has previously set attribute-based standards, but
used a work-based metric as the attribute rather than footprint. Work-
based measurements such as payload and towing capability are key among
the parameters that characterize differences in the design of these
vehicles, as well as differences in how the vehicles will be used.
Since NHTSA has been regulating HDPUVs, these standards have been based
on a WF attribute that combines the vehicle's payload and towing
capabilities, with an added adjustment for 4-wheel drive vehicles.
Again, while NHTSA is not required by statute to set HDPUV standards
that are attribute-based and that are described by a mathematical
function, NHTSA continues to believe that doing so is reasonable and
appropriate for this segment of vehicles, consistent with prior HDPUV
standard-setting rulemakings. NHTSA proposes to continue using the
work-based attribute and gradually increasing stringency (which for
HDPUVs means that standards appear to decline, as compared to passenger
car and light truck standards where increasing stringency means that
standards appear to increase. This is because HDPUV standards are based
on fuel consumption, which is the inverse of fuel economy,\74\ the
metric that NHTSA
[[Page 56153]]
is statutorily required to use when setting standards for light-duty
vehicle (LDV) fuel use). NHTSA proposes to define HDPUV fuel efficiency
targets as shown in Equation II-4.
---------------------------------------------------------------------------
\74\ For additional information, see the National Academies of
Sciences, Engineering, and Medicine. 2011. Assessment of Fuel
Economy Technologies for Light-Duty Vehicles. Washington, DC. The
National Academies Press. Available at: <a href="https://nap.nationalacademies.org/catalog/12924/assessment-of-fuel-economy-technologies-for-light-duty-vehicles">https://nap.nationalacademies.org/catalog/12924/assessment-of-fuel-economy-technologies-for-light-duty-vehicles</a>. (Accessed: May 31, 2023). Fuel
economy is a measure of how far a vehicle will travel with a gallon
(or unit) of fuel and is expressed in mpg. Fuel consumption is the
inverse of fuel economy. It is the amount of fuel consumed in
driving a given distance. Fuel consumption is a fundamental
engineering measure that is directly related to fuel consumed per
100 miles and is useful because it can be employed as a direct
measure of volumetric fuel savings.
[GRAPHIC] [TIFF OMITTED] TP17AU23.010
---------------------------------------------------------------------------
Where:
WF = Work Factor = [0.75 x (Payload Capacity + Xwd)] + [0.25 x
Towing Capacity]
Where:
Xwd = 4wd adjustment = 500 lbs. if the vehicle group is equipped
with 4WD and all-wheel drive, otherwise equals 0 lbs. for 2wd
Payload Capacity = GVWR (lbs.) - Curb Weight (lbs.) (for each
vehicle group)
Towing Capacity = GCWR \75\ (lbs.) - GVWR (lbs.) (for each vehicle
group)
---------------------------------------------------------------------------
\75\ Gross Combined Weight Rating.
For the Preferred Alternative, this equation is represented
graphically as the curves in Figure II-4 and Figure II-5.
[GRAPHIC] [TIFF OMITTED] TP17AU23.011
[[Page 56154]]
[GRAPHIC] [TIFF OMITTED] TP17AU23.012
Similar to the standards for passenger cars and light trucks, NHTSA
(and EPA) have historically set HDPUV standards such that each
manufacturer's fleet average standard is based on production volume-
weighting of target standards for all vehicles, which are based on each
vehicle's WF as explained above. Thus, for HDPUVs, the required fuel
efficiency level applicable in a given MY is determined by calculating
the production-weighted harmonic average of subconfiguration targets
applicable to specific vehicle model configurations in the fleet, as
shown in Equation II-5.
[GRAPHIC] [TIFF OMITTED] TP17AU23.013
BILLING CODE 4910-59-C
Where:
Subconfiguration Target Standardi = fuel consumption standard for
each group of vehicles with the same payload, towing capacity, and
drive configuration (gallons per 100 miles), and
Volumei = production volume of each unique subconfiguration of a
model type based upon payload, towing capacity, and drive
configuration.
Chapter 1 of the Draft TSD contains a detailed description of the
use of attribute-based standards, generally, for passenger cars, light
trucks, and HDPUVs, and explains the specific decision, in past rules
and for the current proposal, to continue to use vehicle footprint as
the attribute over which to vary passenger car and light truck
stringency, and WF as the attribute over which to vary HDPUV
stringency. That chapter also discusses the policy and approach in
selecting the specific mathematical functions. NHTSA refers readers to
the Draft TSD for a full discussion of these topics and seeks comment
on that discussion.
C. What inputs does the compliance analysis require?
The first step in our analysis of the effects of different levels
of fuel economy standards is the compliance simulation. When we say,
``compliance simulation'' throughout this rulemaking, we mean the CAFE
Model's simulation of how vehicle manufacturers could comply with
different levels of CAFE standards by adding fuel-economy-improving
technology to an existing fleet of vehicles.\76\ At the most basic
level, a model is a set of equations, algorithms,\77\ or other
calculations that are used to make predictions about a
[[Page 56155]]
complex system, such as the environmental impact of a particular
industry or activity. A model may consider various inputs, such as
emissions data, technology costs, or other relevant factors, and use
those inputs to generate output predictions.
---------------------------------------------------------------------------
\76\ When we use the phase ``the model'' throughout this
section, we are referring to the CAFE Model. Any other model will be
specifically named.
\77\ See Merriam-websiter, ``algorithm.'' Broadly, an algorithm
is a step-by-step procedure for solving a problem or accomplishing
some end. More specifically, an algorithm is a procedure for solving
a mathematical problem (as of finding the greatest common divisor)
in a finite number of steps that frequently involves repetition of
an operation.
---------------------------------------------------------------------------
One important note about models is that a model is only as good as
the data and assumptions that go into it. We attempt to ensure that the
technology inputs and assumptions that go into the CAFE Model to
project the effects of different levels of CAFE standards are based on
sound science and reliable data, and that our reasons for using those
inputs and assumptions are transparent and understandable to
stakeholders. This section and the following section discuss at a high
level how we generate the technology inputs and assumptions that the
CAFE Model uses for the compliance simulation.\78\ The Draft Technical
Support Document, CAFE Model Documentation, CAFE Analysis Autonomie
Model Documentation,\79\ and other technical reports supporting this
proposal discuss our technology inputs and assumptions in more detail.
---------------------------------------------------------------------------
\78\ As explained throughout this section, our inputs are a
specific number or datapoint used by the model, and our assumptions
are based on judgment after careful consideration of available
evidence. An assumption can be an underlying reason for the use of a
specific datapoint, function, or modeling process. For example, an
input might be the fuel economy value of the Ford Mustang, whereas
the assumption is that the Ford Mustang's fuel economy value
reported in Ford's CAFE compliance data should be used in our
modeling.
\79\ The ANL report is titled ``Vehicle Simulation Process to
Support the Analysis for MY 2027 and Beyond CAFE and MY 2030 and
Beyond HDPUV FE Standards;'' however, for ease of use and
consistency with the Draft TSD, it is referred to as ``CAFE Analysis
Autonomie Documentation.''
---------------------------------------------------------------------------
We incorporate technology inputs and assumptions either directly in
the CAFE Model or in the CAFE Model's various input files. The heart of
the CAFE Model's decisions about how to apply technologies to
manufacturer's vehicles to project how the manufacturer could meet CAFE
standards is the compliance simulation algorithm. The compliance
simulation algorithm is several equations that direct the model to
apply fuel economy improving technologies to vehicles in a way that
estimates how manufacturers might apply those technologies to their
vehicles in the real world. The compliance simulation algorithm
projects a cost-effective pathway for manufacturers to comply with
different levels of CAFE standards, considering the technology present
on manufacturer's vehicles now, and what technology could be applied to
their vehicles in the future. Embedded directly in the CAFE Model is
the universe of technology options that the model can consider and some
rules about the order in which it can consider those options and
estimates of how effective fuel economy improving technology is on
different types of vehicles, like on a sedan or a pickup truck.
Technology inputs and assumptions are also located in all four of
the CAFE Model's input files. The Market Data Input file is a Microsoft
Excel file that characterizes the baseline automotive fleet used as the
starting point for the analysis. There is one Excel row describing each
vehicle model and model configuration manufactured in the United States
in a MY (or years), and input and assumption data that links that
vehicle to technology, economic, environmental, and safety effects.
Next, the Technologies Input File identifies approximately six dozen
technologies we use in the analysis, uses phase-in caps to identify
when and how widely each technology can be applied to specific types of
vehicles, provides most of the technology costs (only battery costs for
electrified vehicles are provided in a separate file), and provides
some of the inputs involved in estimating impacts on vehicle fuel
consumption and weight. The Scenarios Input File provides the
coefficient values defining the standards for each regulatory
alternative,\80\ and other relevant information applicable to modeling
each regulatory scenario. This information includes, for example, the
estimated value of select tax credits from the IRA, which provide
Federal technology incentives for electrified vehicles, and the PEF,
which is a value that the Secretary of Energy determines under EPCA
that applies to EV fuel economy values.\81\ Finally, the Parameters
Input File contains mainly economic and environmental data, as well as
data about how fuel economy credits and California's Zero Emissions
Vehicle program credits are simulated in the model.
---------------------------------------------------------------------------
\80\ The coefficient values are defined in Draft TSD Chapter
1.2.1 for both the CAFE and HDPUV FE standards.
\81\ See 49 U.S.C. 32904(a)(2), 88 FR 21525 (April 11, 2023).
---------------------------------------------------------------------------
We generate these technology inputs and assumptions in several
ways, including by and through evaluating data submitted by vehicle
manufacturers pursuant to their CAFE reporting obligations;
consolidating public data on vehicle models from manufacturer websites,
press materials, marketing brochures, and other publicly available
information; collaborative research, testing, and modeling with other
Federal agencies, like the DOE's ANL; research, testing, and modeling
with independent organizations, like IAV GmbH Ingenieurgesellschaft
Auto und Verkehr (IAV), Southwest Research Institute (SwRI), NAS and
FEV North America; determining that work done for prior rules is still
relevant and applicable; considering feedback from stakeholders on
prior rules and in meetings conducted before the commencement of this
rule; and using our own engineering judgment. When we say,
``engineering judgment'' throughout this rulemaking, we are referring
to decisions made by a team of engineers and analysts. This judgment is
based on their experience working in the automotive industry and other
relevant fields, and assessment of all the data sources described
above. Most importantly, we use engineering judgment to assess how best
to represent vehicle manufacturer's potential responses to different
levels of CAFE standards within the boundaries of our modeling tools,
as ``a model is meant to simplify reality in order to make it
tractable.'' \82\ In other words, we use engineering judgment to
concentrate potential technology inputs and assumptions from millions
of discrete data points from hundreds of sources to three datasets
integrated in the CAFE Model and four input files. How the CAFE Model
decides to apply technology, i.e., the compliance simulation algorithm,
has also been developed using engineering judgment, considering some of
the same factors that manufacturers consider when they add technology
to vehicles in the real world.
---------------------------------------------------------------------------
\82\ Chem. Mfrs. Ass'n v. E.P.A., 28 F.3d 1259, 1264-65 (D.C.
Cir. 1994) (citing Milton Friedman, The Methodology of Positive
Economics, in Essays in Positive Economics 3, 14-15 (1953)).
---------------------------------------------------------------------------
While upon first read this discussion may seem oversimplified, we
believe that there is value in all stakeholders being able to
understand how the analysis uses different sets of technology inputs
and assumptions and how those inputs and assumptions are based on real-
world factors. This is so that all stakeholders have the appropriate
context to better comment on the specific technology inputs and
assumptions discussed later and in detail in all of the associated
technical documentation.
1. Technology Options and Pathways
We begin the compliance analysis by defining the range of fuel
economy improving technologies that the CAFE Model could add to a
manufacturer's vehicles in the United States
[[Page 56156]]
market.<SUP>83 84 85</SUP> These are technologies that we believe are
representative of what vehicle manufacturers currently use on their
vehicles, and that vehicle manufacturers could use on their vehicles in
the timeframe of the standards (MYs 2027 and beyond for the LD analysis
and MYs 2030 and beyond for the HDPUV analysis). The technology options
include basic and advanced engines, transmissions, electrification, and
road load technologies, which include mass reduction (MR), aerodynamic
improvement (AERO), and tire rolling resistance (ROLL) reduction
technologies. Note that while EPCA/EISA constrains our ability to
consider the possibility that manufacturers would comply with CAFE
standards by implementing some electrification technologies when making
decisions about the level of CAFE standards that is maximum feasible,
there are several reasons why we must accurately model the range of
available electrification technologies. These are discussed in more
detail in Section II.D and in Section V.
---------------------------------------------------------------------------
\83\ 40 CFR 86.1806-17--Onboard diagnostics.
\84\ 40 CFR 86.1818-12--Greenhouse gas emission standards for
light-duty vehicles, light-duty trucks, and medium-duty passenger
vehicles.
\85\ Commission Directive 2001/116/EC--European Union emission
regulations for new LDVs--including passenger cars and light
commercial vehicles (LCV).
---------------------------------------------------------------------------
We require several data elements to add a technology to the range
of options that the CAFE Model can consider; those elements include a
broadly applicable technology definition, estimates of how effective
that technology is at improving a vehicle's fuel economy value on a
range of vehicles (e.g., sedan through pickup truck, or HD pickup truck
and HD van), and the cost to apply that technology on a range of
vehicles. Each technology we select is designed to be representative of
a wide range of specific technology applications used in the automotive
industry. For example, in MY 2022, eleven vehicle brands under five
vehicle manufacturers \86\ used what we call a ``downsized turbocharged
engine with cylinder deactivation.'' While we might expect brands owned
by the same manufacturer to use similar technology on their engines,
among those five manufacturers, the engine systems will be very
different. Some manufacturers may also have been making those engines
longer than others, meaning that they have had more time to make the
system more efficient while also making it cheaper, as they make gains
learning the development improvement and production process. If we
chose to model the best performing, cheapest engine and applied that
technology across vehicles made by all automotive manufacturers, we
would likely be underestimating the cost and underestimating the
technology required for the entire automotive industry to achieve
higher levels of CAFE standards. The reverse would be true if we
selected a system that was less efficient and more expensive. So, in
reality, some vehicle manufacturers' systems will perform better and
cost less than our modeled systems and some will perform worse and cost
more. However, selecting representative technology definitions for our
analysis will ensure that, on balance, we capture a reasonable level of
costs and benefits that would result from any manufacturer applying the
technology.
---------------------------------------------------------------------------
\86\ Ford, General Motors (GM), Honda, Stellantis, and VWA
represent the following 11 brands: Acura, Alfa Romeo, Audi, Bentley,
Buick, Cadillac, Chevrolet, Ford, GMC, Lamborghini, and Porsche.
---------------------------------------------------------------------------
We have been refining the LD technology options since first
developing the CAFE Model in the early 2000s. ``Refining'' means both
adding and removing technology options depending on technology
availability now and projected future availability in the United States
market, while balancing a reasonable amount of modeling and analysis
complexity. Since the last analysis we have reduced the number of LD
ICE technology options but have refined the options, so they better
reflect the diversity of engines in the current fleet. Our technology
options also reflect an increase in diversity for hybridization and
electrification options, though we utilize these options in a manner
that is consistent with statutory constraints. In addition to better
representing the current fleet, this reflects consistent feedback from
vehicle manufacturers who have told us that they will reduce investment
in ICEs while increasing investment in hybrid and plug-in BEV
options.\87\
---------------------------------------------------------------------------
\87\ 87 FR 25781 (May 2, 2022); Docket Submission of Ex Parte
Meetings Prior to Publication of the Corporate Average Fuel Economy
Standards for Passenger Cars and Light Trucks for Model Years 2027-
2032 and Fuel Efficiency Standards for Heavy-Duty Pickup Trucks and
Vans for Model Years 2030-2035 Notice of Proposed Rulemaking
memorandum, which can be found under References and Supporting
Material in the rulemaking Docket No. NHTSA-2023-0022.
---------------------------------------------------------------------------
Feedback on the past several CAFE rules has also centered
thematically on the expected scope of future electrified vehicle
technologies. We have received feedback that we cannot consider BEV
options and even so, our costs underestimate BEV costs when we do
consider them in, for example, the baseline. We have also received
comments that we should consider more electrified vehicle options and
our costs overestimate future costs. Consistent with our interpretation
of EPCA/EISA, discussed further in Section V.D.1, we include several LD
electrified technologies to appropriately represent the diversity of
current and anticipated future technology options while ensuring our
analysis remains consistent with statutory limitations. In addition,
this ensures that our analysis can appropriately capture manufacturer
decision making about their vehicle fleets for reasons other than CAFE
standards (e.g., other regulatory programs and manufacturing
decisions).
The technology options also include our judgment about which
technologies will not be available in the rulemaking timeframe. There
are several reasons why we may have concluded that it was reasonable to
exclude a technology from the options we consider. As with past
analyses, we did not include technologies unlikely to be feasible in
the rulemaking timeframe, engines technologies designed for markets
other than the United States market that are required to use unique
gasoline,\88\ or technologies where there were not appropriate data
available for the range of vehicles that we model in the analysis
(i.e., technologies that are still in the research and development
phase but are not ready for mass market production). Each technology
section below and in chapter 3 of the Draft TSD discusses these
decisions in detail.
---------------------------------------------------------------------------
\88\ In general, most vehicles produced for sale in the United
States have been designed to use ``Regular'' gasoline, or 87 octane.
See EIA. What is Octane. Available at: <a href="https://www.eia.gov/energyexplained/gasoline/octane-in-depth.php">https://www.eia.gov/energyexplained/gasoline/octane-in-depth.php</a>. (Accessed: May 31,
2023), for more information.
---------------------------------------------------------------------------
The HDPUV technology options also represent a diverse range of both
internal combustion and electrified powertrain technologies. We last
used the CAFE Model for analyzing HDPUV standards in the Phase 2
Medium- and Heavy-Duty Greenhouse Gas and Fuel Efficiency joint rules
with EPA in 2016.\89\ Since issuing that rule, we refined the ICE
technology options based on trends on vehicles in the fleet and updated
technology cost and effectiveness data. The HDPUV options also reflect
more electrification and hybridization options in that real-world
fleet. However, the HDPUV technology options are also less diverse than
the LD technology options, for several reasons.
[[Page 56157]]
The HDPUV fleet is significantly smaller than the LD fleet, with five
manufacturers building a little over 30 nameplates in one thousand
vehicle model configurations,\90\ compared with the almost 20 LDV
manufacturers building 369 nameplates in the range of over two thousand
configurations. Also, by definition, the HDPUV fleet only includes two
vehicle types: HD pickup trucks and work vans.\91\ These vehicle types
have focused applications, which includes transporting people and
moving equipment and supplies. As discussed in more detail below, these
vehicles are built with specific technology application, reliability,
and durability requirements in order to do work.\92\ We believe the
range of HDPUV technology options appropriately and reasonably
represents the smaller range of technology options available currently
and for application in future MYs for the United States market.
---------------------------------------------------------------------------
\89\ 81 FR 73478 (Oct. 25, 2016); CAFE Compliance and Effects
Modeling System. 2016 Final Rule for Model Years 2021-2027 Heavy-
Duty Pickups and Vans. Available at: <a href="https://www.nhtsa.gov/corporate-average-fuel-economy/cafe-compliance-and-effects-modeling-system">https://www.nhtsa.gov/corporate-average-fuel-economy/cafe-compliance-and-effects-modeling-system</a>. (Accessed: May 31, 2023).
\90\ In this example, a HDPUV ``nameplate'' could be the
``Sprinter 2500'', as in the Mercedes-Benz Sprinter 2500. The
vehicle model configurations are each unique variants of the
Sprinter 2500 that have an individual row in our Market Data Input
File, which are divided generally based on compliance fuel
consumption value and WF.
\91\ For this proposal, vehicles were divided between the LD and
HDPUV fleets solely on their gross vehicle weight rating (GVWR)
being above or below 8,500 lbs. We will revisit the distribution of
vehicles in the final rule to include the the distinction for MDPVs.
\92\ ``Work'' includes hauling, towing, carrying cargo, or
transporting people, animals, or equipment.
---------------------------------------------------------------------------
Note, however, that for both the LD and HDPUV analyses, the CAFE
Model does not dictate or predict the technologies manufacturers must
use to comply; rather, the CAFE Model outlines a technology pathway
that manufacturers could use to meet the standards cost-effectively.
While we estimate the costs and benefits for different levels of CAFE
standards estimating technology applications that manufacturers could
use in the rulemaking timeframe, it is entirely possible and reasonable
that a vehicle manufacturer will use different technology options to
meet our standards than the CAFE Model estimates and may even use
technologies that we do not include in our analysis. This is because
our standards do not mandate the application of any particular
technology. Rather, our standards are performance based: manufacturers
can and do use a range of compliance solutions that include technology
application, shifting sales from one vehicle model or trim level to
another,\93\ and even paying civil penalties. That said, we are
confident that the 75 LD technology options and 30 HDPUV technology
options included in the analysis (in particular considering that for
each technology option, the analysis includes distinct technology cost
and effectiveness values for fourteen different types of vehicles,
resulting in about a million different technology effectiveness and
cost data points) strike a reasonable balance between the diversity of
technology used by an entire industry and simplifying reality in order
to make modeling tractable.
---------------------------------------------------------------------------
\93\ Manufacturers could increase their production of one type
of vehicle that has higher fuel economy level, like the hybrid
version of a conventional vehicle model, to meet the standards. For
example, Ford has conventional, hybrid, and electric versions of its
F-150 pickup truck, and Toyota has conventional, hybrid, and plug-in
hybrid versions of its RAV4 sport utility vehicle.
\94\ A detailed discussion of all the technologies listed in the
table can be found in TSD Chapter 3.
---------------------------------------------------------------------------
Table II-1 and Table II-2 below list most of the technologies that
we used for the LD and HDPUV analyses. Each technology has a name that
loosely corresponds to its real-world technology equivalent. We
abbreviate the name to a short easy signifier for the CAFE Model to
read. We organize those technologies into groups based on technology
type: basic and advanced engines, transmissions, electrification, and
road load technologies, which include MR, aerodynamic improvement, and
low rolling resistance tire technologies.
Table II-1--Light Duty Vehicle Technology Options \94\
------------------------------------------------------------------------
Technology name Abbreviation Technology group
------------------------------------------------------------------------
Single Overhead Camshaft Engine SOHC.............. Basic Engines.
with VVT.
Double Overhead Camshaft Engine DOHC.............. Basic Engines.
with VVT.
Variable Valve Lift.............. VVL............... Basic Engines.
Stoichiometric Gasoline Direct SGDI.............. Basic Engines.
Injection.
Cylinder Deactivation............ DEAC.............. Basic Engines.
Turbocharged Engine.............. TURBO0............ Advanced Engines.
Turbocharged Engine with Cooled TURBOE............ Advanced Engines.
Exhaust Gas Recirculation.
Turbocharged Engine with Cylinder TURBOD............ Advanced Engines.
Deactivation.
Advanced Turbocharged Engine, TURBO1............ Advanced Engines.
Level 1.
Advanced Turbocharged Engine, TURBO2............ Advanced Engines.
Level 2.
DOHC Engine with Advanced ADEACD............ Advanced Engines.
Cylinder Deactivation.
SOHC Engine with Advanced ADEACS............ Advanced Engines.
Cylinder Deactivation.
High Compression Ratio Engine.... HCR............... Advanced Engines.
High Compression Ratio Engine HCRE.............. Advanced Engines.
with Cooled Exhaust Gas
Recirculation.
High Compression Ratio Engine HCRD.............. Advanced Engines.
with Cylinder Deactivation.
Variable Compression Ratio Engine VCR............... Advanced Engines.
Variable Turbo Geometry Engine... VTG............... Advanced Engines.
Variable Turbo Geometry Engine VTGE.............. Advanced Engines.
with eBoost.
Turbocharged Engine with Advanced TURBOAD........... Advanced Engines.
Cylinder Deactivation.
Advanced Diesel Engine........... ADSL.............. Advanced Engines.
Advanced Diesel Engine with DSLI.............. Advanced Engines.
Cylinder Deactivation.
Compressed Natural Gas Engine.... CNG............... Advanced Engines.
5-Speed Automatic Transmission... AT5............... Transmissions.
6-Speed Automatic Transmission... AT6............... Transmissions.
7-Speed Automatic Transmission AT7L2............. Transmissions.
with Level 2 high efficiency
gearbox (HEG).
8-Speed Automatic Transmission... AT8............... Transmissions.
8-Speed Automatic Transmission AT8L2............. Transmissions.
with Level 2 HEG.
8-Speed Automatic Transmission AT8L3............. Transmissions.
with Level 3 HEG.
9-Speed Automatic Transmission AT9L2............. Transmissions.
with Level 2 HEG.
10-Speed Automatic Transmission AT10L2............ Transmissions.
with Level 2 HEG.
10-Speed Automatic Transmission AT10L3............ Transmissions.
with Level 3 HEG.
6-Speed Dual Clutch Transmission. DCT6.............. Transmissions.
[[Page 56158]]
8-Speed Dual Clutch Transmission. DCT8.............. Transmissions.
Continuously Variable CVT............... Transmissions.
Transmission.
Continuously Variable CVTL2............. Transmissions.
Transmission with Level 2 HEG.
Conventional Powertrain (Non- CONV.............. Electrification.
Electric).
12V Micro-Hybrid Start-Stop SS12V............. Electrification.
System.
48V Belt Mounted Integrated BISG.............. Electrification.
Starter/Generator.
Parallel Strong Hybrid/Electric P2D............... Electrification.
Vehicle with DOHC Engine.
Parallel Strong Hybrid/Electric P2SGDID........... Electrification.
Vehicle with DOHC+SGDI Engine.
Parallel Strong Hybrid/Electric P2S............... Electrification.
Vehicle with SOHC Engine.
Parallel Strong Hybrid/Electric P2SGDIS........... Electrification.
Vehicle with SOHC+SGDI Engine.
Parallel Strong Hybrid Electric P2TRB0............ Electrification.
Vehicle with TURBO0 Engine.
Parallel Strong Hybrid Electric P2TRBE............ Electrification.
Vehicle with TURBOE Engine.
Parallel Strong Hybrid Electric P2TRB1............ Electrification.
Vehicle with TURBO1 Engine.
Parallel Strong Hybrid Electric P2TRB2............ Electrification.
Vehicle with TURBO2 Engine.
Parallel Strong Hybrid Electric P2HCR............. Electrification.
Vehicle with HCR Engine.
Parallel Strong Hybrid Electric P2HCRE............ Electrification.
Vehicle with HCRE Engine.
Power Split Strong Hybrid/ SHEVPS............ Electrification.
Electric Vehicle with Full Time
Atkinson Engine.
Plug-in Hybrid Vehicle with PHEV20T........... Electrification.
TURBO1 Engine and 20 miles of
electric range.
Plug-in Hybrid Vehicle with PHEV50T........... Electrification.
TURBO1 Engine and 50 miles of
electric range.
Plug-in Hybrid Vehicle with HCR PHEV20H........... Electrification.
Engine and 20 miles of electric
range.
Plug-in Hybrid Vehicle with HCR PHEV50H........... Electrification.
Engine and 50 miles of electric
range.
Plug-in Hybrid Vehicle with Full PHEV20PS.......... Electrification.
Time Atkinson Engine and 20
miles of electric range.
Plug-in Hybrid Vehicle with Full PHEV50PS.......... Electrification.
Time Atkinson Engine and 50
miles of electric range.
Battery Electric Vehicle with 200 BEV1.............. Electrification.
miles of range.
Battery Electric Vehicle with 250 BEV2.............. Electrification.
miles of range.
Battery Electric Vehicle with 300 BEV3.............. Electrification.
miles of range.
Battery Electric Vehicle with 350 BEV4.............. Electrification.
miles of range.
Fuel Cell Vehicle................ FCV............... Electrification.
Baseline Tire Rolling Resistance. ROLL0............. Rolling
Resistance.
Tire Rolling Resistance, 10% ROLL10............ Rolling
Improvement. Resistance.
Tire Rolling Resistance, 20% ROLL20............ Rolling
Improvement. Resistance.
Tire Rolling Resistance, 30% ROLL30............ Rolling
Improvement. Resistance.
Baseline Aerodynamic Drag AERO0............. Aerodynamic Drag.
Technology.
Aerodynamic Drag, 5% Drag AERO5............. Aerodynamic Drag.
Coefficient Reduction.
Aerodynamic Drag, 10% Drag AERO10............ Aerodynamic Drag.
Coefficient Reduction.
Aerodynamic Drag, 15% Drag AERO15............ Aerodynamic Drag.
Coefficient Reduction.
Aerodynamic Drag, 20% Drag AERO20............ Aerodynamic Drag.
Coefficient Reduction.
Baseline Mass Reduction MR0............... Mass Reduction.
Technology.
Mass Reduction--5.0% of Glider... MR1............... Mass Reduction.
Mass Reduction--7.5% of Glider... MR2............... Mass Reduction.
Mass Reduction--10.0% of Glider.. MR3............... Mass Reduction.
Mass Reduction--15.0% of Glider.. MR4............... Mass Reduction.
Mass Reduction--20.0% of Glider.. MR5............... Mass Reduction.
------------------------------------------------------------------------
Table II-2--Heavy-Duty Pickup Truck and Van Technology Options \95\
------------------------------------------------------------------------
Technology name Abbreviation Technology group
------------------------------------------------------------------------
Single Overhead Camshaft Engine SOHC.............. Basic Engines.
with VVT.
Double Overhead Camshaft Engine DOHC.............. Basic Engines.
with VVT.
Stoichiometric Gasoline Direct SGDI.............. Basic Engines.
Injection.
Cylinder Deactivation............ DEAC.............. Basic Engines.
Turbocharged Engine.............. TURBO0............ Advanced Engines.
Advanced Diesel Engine........... ADSL.............. Advanced Engines.
Advanced Diesel Engine with DSLI.............. Advanced Engines.
Improvements.
5-Speed Automatic Transmission... AT5............... Transmissions.
6-Speed Automatic Transmission... AT6............... Transmissions.
8-Speed Automatic Transmission... AT8............... Transmissions.
9-Speed Automatic Transmission AT9L2............. Transmissions.
with Level 2 HEG.
10-Speed Automatic Transmission AT10L2............ Transmissions.
with Level 2 HEG.
Conventional Powertrain (Non- CONV.............. Electrification.
Electric).
12V Micro-Hybrid Start-Stop SS12V............. Electrification.
System.
Belt Mounted Integrated Starter/ BISG.............. Electrification.
Generator.
Parallel Strong Hybrid/Electric P2S............... Electrification.
Vehicle with SOHC Engine. (P2D, P2TRB0).....
Plug-in Hybrid Vehicle with Basic PHEV50H........... Electrification.
Engine and 50 miles of electric (PHEV50T).........
range.
Battery Electric Vehicle with 150 BEV1.............. Electrification.
miles of range (for van classes)
or 200 miles of range (for
pickup classes).
Battery Electric Vehicle with 250 BEV2.............. Electrification.
miles of range (for van classes)
or 300 miles of range (for
pickup classes).
[[Page 56159]]
Fuel Cell Vehicle................ FCV............... Electrification.
Baseline Tire Rolling Resistance. ROLL0............. Rolling
Resistance.
Tire Rolling Resistance, 10% ROLL10............ Rolling
Improvement. Resistance.
Tire Rolling Resistance, 20% ROLL20............ Rolling
Improvement. Resistance.
Baseline Aerodynamic Drag AERO0............. Aerodynamic Drag.
Technology.
Aerodynamic Drag, 10% Drag AERO10............ Aerodynamic Drag.
Coefficient Reduction.
Aerodynamic Drag, 20% Drag AERO20............ Aerodynamic Drag.
Coefficient Reduction.
Baseline Mass Reduction MR0............... Mass Reduction.
Technology.
Mass Reduction--1.4% of Glider... MR1............... Mass Reduction.
Mass Reduction--13.0% of Glider.. MR2............... Mass Reduction.
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We then organize the groups into pathways. The pathways instruct
the CAFE Model how and in what order to apply technology. In other
words, the pathways define technologies that are mutually exclusive
(i.e., that cannot be applied at the same time), and define the
direction in which vehicles can advance as the model evaluates which
technologies to apply. Figure II-6 shows the LD and HDPUV technology
pathways used in this analysis. In general, the paths are tied to ease
of implementation of additional technology and how closely related the
technologies are.
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\95\ A detailed discussion of all the technologies listed in the
table can be found in TSD Chapter 3.
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BILLING CODE 4910-59-P
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[GRAPHIC] [TIFF OMITTED] TP17AU23.014
BILLING CODE 4910-59-C
As an example, our ``Turbo Engine Path'' consists of five different
engine technologies that employ different levels of turbocharging
technology. A
[[Page 56161]]
turbocharger is essentially a small turbine that is driven by exhaust
gases produced by the engine. As these gases flow through the
turbocharger, they spin the turbine, which in turn spins a compressor
that pushes more air into an engine's cylinder. Having more air in the
engine's cylinder allows the engine to burn more fuel, which then
creates more power, without needing a physically larger engine. In our
analysis, an engine that uses a turbocharger ``downsizes,'' or becomes
smaller. The smaller engine can use less fuel to do the same amount of
work as the engine did before it used a turbocharger and was downsized.
Allowing basic engines to be downsized and turbocharged instead of just
turbocharged keeps the vehicle's utility and performance constant so
that we can measure the costs and benefits of different levels of fuel
economy improvements, rather than the change in different vehicle
attributes. This concept is discussed further, below.
Grouping technologies on pathways also tells the model how to
evaluate technologies; continuing this example, a vehicle can only have
one engine, so if a vehicle has one of the Turbo engines the model will
evaluate which more advanced Turbo technology to apply. Or, if it is
more cost-effective to go beyond the Turbo pathway, the model will
evaluate whether to apply more advanced engine technologies and
hybridization path technology.
Then, the arrows between technologies instruct the model on the
order in which to evaluate technologies on a pathway. This ensures that
a vehicle that uses a more fuel-efficient technology cannot downgrade
to a less efficient option or that a vehicle would switch to technology
that was significantly technically different. As an example, if a
vehicle in the compliance simulation begins with a TURBOD engine--a
turbocharged engine with cylinder deactivation--it cannot adopt a
TURBO0 engine. Similarly, this vehicle with a TURBOD engine cannot
adopt an ADEACD engine.\96\ The model follows instructions pursuant to
the direction of arrows between technology groups and between
technologies on the same pathway.
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\96\ An engine could potentially be changed from TURBO0 to
TURBO2 without redesigning the engine block or requiring
significantly different expertise to design and implement. A change
to ADEACD would likely require a different engine block that might
not be possible to fit in the engine bay of the vehicle without a
complete redesign and different technical expertise requiring years
of research and development. This consideration which would strand
capital and break parts sharing is why the advanced engine paths
restrict most movement between them.
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We also consider two categories of technology that we could not
simulate as part of the CAFE Model's technology pathways. ``Off-cycle''
and air conditioning (AC) efficiency technologies improve vehicle fuel
economy, but the benefit of those technologies cannot be captured using
the fuel economy test methods that we must use under EPCA/EISA.\97\ As
an example, manufacturers can claim a benefit for technology like
active seat ventilation and solar reflective surface coatings that make
the cabin of a vehicle more comfortable for the occupants, who then do
not have to use other less efficient accessories like heat or AC.
Instead of including off-cycle and AC efficiency technologies in the
technology pathways, we include the improvement as a defined benefit
that gets applied to a manufacturer's entire fleet instead of to
individual vehicles. The defined benefit that each manufacturer
receives in the analysis for using off-cycle and AC efficiency
technology on their vehicles is located in the Market Data Input file.
See Chapter 3.7 of the Draft TSD for more discussion in how off-cycle
and AC efficiency technologies are developed and modeled.
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\97\ See 49 U.S.C. 32904(c) (``Testing and calculation
procedures. . . . the Administrator shall use the same procedures
for passenger automobiles the Administrator used for model year 1975
(weighted 55 percent urban cycle and 45 percent highway cycle), or
procedures that give comparable results.'').
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To illustrate, throughout this section we will follow the
hypothetical vehicle mentioned above that begins the compliance
simulation with a TURBOD engine. Our hypothetical vehicle, Generic
Motors' Ravine Runner F Series, is a roomy, top of the line sport
utility vehicle (SUV). The Ravine Runner F Series starts the compliance
simulation with technologies from most technology pathways;
specifically, after looking at Generic Motors' website and marketing
materials, we determined that it has technology that loosely fits
within the following technologies that we consider in the CAFE Model:
it has a turbocharged engine with cylinder deactivation, a fairly
advanced 10-speed automatic transmission, a 12V start-stop system, the
least advanced tire technology, a fairly aerodynamic vehicle body, and
it employs a fairly advanced level of MR. We track the technologies on
each vehicle using a ``technology key'', which is the string of
technology abbreviations for each vehicle. Again, the vehicle
technologies and their abbreviations that we consider in this analysis
are shown in Table II-1 and Table II-2 above. The technology key for
the Ravine Runner F Series is ``TURBOD; AT10L2, SS12V; ROLL0; AERO5;
MR3.''
2. Defining the Technology Baseline
The Market Data Input File is one of four Excel input files that
the CAFE Model uses for compliance and effects simulation. The Market
Data Input file's ``Vehicles'' tab (or worksheet) houses one of the
most significant compilations of technology inputs and assumptions in
the analysis, which is a characterization of a baseline fleet of
vehicles to which the CAFE Model adds fuel-economy-improving
technology. We call this fleet the ``baseline fleet'' or the ``analysis
fleet.'' The baseline fleet includes a number of inputs necessary for
the model to add fuel economy improving technology to each vehicle for
the compliance analysis and to calculate the resulting impacts for the
effects analysis.
There is one Microsoft Excel file row for each vehicle model, for
LD with the same certification fuel economy value and vehicle
footprint, and for HDPUV with the same certification fuel consumption
and WF. This means that vehicle models with different configurations
that affect the vehicle's certification fuel economy or fuel
consumption value--for example, our Ravine Runner example vehicle comes
in three di
[…truncated; see source link]Indexed from Federal Register on August 17, 2023.
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