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Proposed Rule2025-22014

The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule III for Model Years 2022 to 2031 Passenger Cars and Light Trucks

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Published

December 5, 2025

Issuing agencies

Transportation DepartmentNational Highway Traffic Safety Administration

Abstract

NHTSA, on behalf of the Department of Transportation (DOT), proposes to substantially recalibrate the Corporate Average Fuel Economy (CAFE) program to realign this program with Congressional intent. That recalibration includes proposing to amend DOT's fuel economy standards for light-duty vehicles for model years (MYs) 2022- 2026 and MYs 2027-2031. Consistent with statutory requirements, the fuel economy standards proposed in this rule are founded on light-duty vehicles powered by gasoline and diesel fuels, a category that includes non-plug-in hybrid vehicles. In formulating the proposed standards, NHTSA has not considered, consistent with law, the imputed fuel-economy performance of battery-powered electric vehicles (EVs) or the electric operation of vehicles that use plug-in hybrid electric powertrains, nor compliance credits or adjustments to the two-cycle fuel economy test procedures to account for air conditioning and off-cycle technologies. NHTSA also is proposing to eliminate the inter-manufacturer credit trading system and to amend the light-duty vehicle fleet classification system to allocate vehicles into passenger and non-passenger automobile fleets appropriately, based on their attributes and capabilities, starting in MY 2028. Elimination of unlawful considerations, combined with several of the proposed changes, would significantly improve the capabilities of manufacturers to meet fuel economy standards, better align the program with Congressional intent, and reduce manufacturer incentives to design vehicles and add features that are not desired by American consumers and that have questionable real-world fuel economy benefits. NHTSA is therefore proposing to set fuel economy standards that increase from newly proposed MY 2022 standards at a rate of 0.5 percent per year through MY 2026, followed by 0.25 percent per year through MY 2031, with MY 2027 stringency established as a bridge between the two sets of standards. The reduced stringency increases in later years, coupled with a reevaluation of the coefficients that define the functions governing fuel economy standards, are intended to establish maximum feasible standards in a manner that gains real-world fuel-economy-benefits, while enabling the industry to adapt to the proposed substantial recalibration of the CAFE program. NHTSA projects that the amended standards would correspond to the industry fleetwide average for all light-duty vehicles of roughly 34.5 miles per gallon (mpg) in MY 2031.

Full Text

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[Federal Register Volume 90, Number 232 (Friday, December 5, 2025)]
[Proposed Rules]
[Pages 56438-56656]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22014]

[[Page 56437]]

Vol. 90

Friday,

No. 232

December 5, 2025

Part IV

Department of Transportation

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National Highway Traffic Safety Administration

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49 CFR Parts 523, 531, 533, et al.

The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule III for Model
Years 2022 to 2031 Passenger Cars and Light Trucks; Proposed Rule

Federal Register / Vol. 90, No. 232 / Friday, December 5, 2025 /
Proposed Rules

[[Page 56438]]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 523, 531, 533, 536, and 537

[NHTSA-2025-0491]
RIN 2127-AM76

The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule III for
Model Years 2022 to 2031 Passenger Cars and Light Trucks

AGENCY: National Highway Traffic Safety Administration (NHTSA).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: NHTSA, on behalf of the Department of Transportation (DOT),
proposes to substantially recalibrate the Corporate Average Fuel
Economy (CAFE) program to realign this program with Congressional
intent. That recalibration includes proposing to amend DOT's fuel
economy standards for light-duty vehicles for model years (MYs) 2022-
2026 and MYs 2027-2031. Consistent with statutory requirements, the
fuel economy standards proposed in this rule are founded on light-duty
vehicles powered by gasoline and diesel fuels, a category that includes
non-plug-in hybrid vehicles. In formulating the proposed standards,
NHTSA has not considered, consistent with law, the imputed fuel-economy
performance of battery-powered electric vehicles (EVs) or the electric
operation of vehicles that use plug-in hybrid electric powertrains, nor
compliance credits or adjustments to the two-cycle fuel economy test
procedures to account for air conditioning and off-cycle technologies.
NHTSA also is proposing to eliminate the inter-manufacturer credit
trading system and to amend the light-duty vehicle fleet classification
system to allocate vehicles into passenger and non-passenger automobile
fleets appropriately, based on their attributes and capabilities,
starting in MY 2028. Elimination of unlawful considerations, combined
with several of the proposed changes, would significantly improve the
capabilities of manufacturers to meet fuel economy standards, better
align the program with Congressional intent, and reduce manufacturer
incentives to design vehicles and add features that are not desired by
American consumers and that have questionable real-world fuel economy
benefits. NHTSA is therefore proposing to set fuel economy standards
that increase from newly proposed MY 2022 standards at a rate of 0.5
percent per year through MY 2026, followed by 0.25 percent per year
through MY 2031, with MY 2027 stringency established as a bridge
between the two sets of standards. The reduced stringency increases in
later years, coupled with a reevaluation of the coefficients that
define the functions governing fuel economy standards, are intended to
establish maximum feasible standards in a manner that gains real-world
fuel-economy-benefits, while enabling the industry to adapt to the
proposed substantial recalibration of the CAFE program. NHTSA projects
that the amended standards would correspond to the industry fleetwide
average for all light-duty vehicles of roughly 34.5 miles per gallon
(mpg) in MY 2031.

DATES:
Comments: Comments are requested on or before January 20, 2026. See
the SUPPLEMENTARY INFORMATION section on ``Public Participation,''
below, for more information about written comments. In compliance with
the Paperwork Reduction Act, NHTSA is also seeking comments on a
modification of an existing information collection. For additional
information, see the Paperwork Reduction Act section under Section VIII
below. All comments relating to the information collection requirements
should be submitted to NHTSA and to the Office of Management and Budget
(OMB) at the address listed in the ADDRESSES section on or before 45
days from date of publication.
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
Supplemental Environmental Impact Statement (Draft SEIS) 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: 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>, 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.
Comments on the proposed information collection requirements should
be submitted to: Office of Management and Budget at <a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a>. To find this information collection, select
``Currently under Review--Open for Public Comment'' or use the search
function. It is requested that comments sent to the OMB also be sent to
the NHTSA rulemaking docket identified in the heading of this document.

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#a4e7e5e2e1fbe9c6cbdce4c0cbd08ac3cbd2">[email&#160;protected]</a>. For legal issues,
Hannah Fish, 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#7734363132283a15180f3713180359101801">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Acronyms and Abbreviations
------------------------------------------------------------------------
Abbreviation Term
------------------------------------------------------------------------
4WD............................... Four Wheel Drive.
AC................................ Air conditioning.
ACME.............................. Adaptive Cylinder Management Engine.
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.
AEB............................... Automatic Emergency Braking.
AEO............................... Annual Energy Outlook.

[[Page 56439]]

AER............................... All-Electric Range.
AERO.............................. Aerodynamic Drag Technology.
AERO0............................. Base Level Aerodynamic Drag
Technology.
AERO5............................. Aerodynamic Drag, 5% Drag
Coefficient Reduction.
AERO10............................ Aerodynamic Drag, 10% Drag
Coefficient Reduction.
AERO15............................ Aerodynamic Drag, 15% Drag
Coefficient Reduction.
AERO20............................ Aerodynamic Drag, 20% Drag
Coefficient Reduction.
AFV............................... Alternative Fuel Vehicle.
AHSS.............................. Advanced High Strength Steel.
AIS............................... Abbreviated Injury Scale.
AMFA.............................. Alternative Motor Fuels Act of 1988.
AMPC.............................. Advanced Manufacturing Production
Tax Credit.
AMTL.............................. Advanced Mobility Technology
Laboratory.
Argonne........................... Argonne National Laboratory.
ANSI.............................. American National Standards
Institute.
APA............................... Administrative Procedure Act.
AT................................ Automatic Transmission.
AWD............................... All-Wheel Drive.
BEV............................... Battery Electric Vehicle.
BGEPA............................. Bald and Golden Eagle Protection
Act.
BISG.............................. Belt Integrated Starter Generator.
BLS............................... Bureau of Labor Statistics.
BMEP.............................. Brake Mean Effective Pressure.
BSD............................... Blind Spot Detection.
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.
CFR............................... Code of Federal Regulations.
CH4............................... Methane.
CNG............................... Compressed Natural Gas.
CO2............................... Carbon Dioxide.
COVID-19.......................... Coronavirus disease of 2019.
CPM............................... Cost Per Mile.
CR................................ Compression Ratio.
CVC............................... Clean Vehicle Credits.
CVT............................... Continuously Variable Transmission.
CW................................ Curb Weight.
CY................................ Calendar Year.
CZMA.............................. Coastal Zone Management Act.
DCT............................... Dual-Clutch Transmission.
DEAC.............................. Dynamic Cylinder Deactivation.
DMC............................... Direct Manufacturing Costs.
DOE............................... U.S. Department of Energy.
DOI............................... U.S. Department of the Interior.
DOHC.............................. Dual-Overhead Camshaft.
DOT............................... U.S. Department of Transportation.
DSLI.............................. Advanced Diesel Engine With
Improvements.
eCVT.............................. Electronic Continuously Variable
Transmissions.
EGR............................... Exhaust Gas Recirculation.
EIA............................... U.S. Energy Information
Administration.
EISA.............................. Energy Independence and Security Act
of 2007
E.O............................... Executive Order.
EPA............................... U.S. Environmental Protection
Agency.
EPCA.............................. Energy Policy and Conservation Act
of 1975.
ESA............................... Endangered Species Act.
ETDS.............................. Electric Traction Drive System.
EV................................ Electric Vehicle.
FCEV.............................. Fuel Cell Electric Vehicle.
FCIV.............................. Fuel Consumption Improvement Value.
FCW............................... Forward Collision Warning.
FEOC.............................. Foreign entity of concern.
FHWA.............................. Federal Highway Administration.
FIP............................... Federal Implementation Plan.
FRIA.............................. Final Regulatory Impact Analysis.
FTP............................... Federal Test Procedure.
FWD............................... Front-wheel Drive.
FWS............................... U.S. Fish and Wildlife Service.
GCWR.............................. Gross Combined Weight Rating.

[[Page 56440]]

GDP............................... Gross Domestic Product.
GES............................... General Estimates System.
GM................................ General Motors.
GREET............................. Greenhouse gases, Regulated
Emissions, and Energy use in
Transportation.
GVWR.............................. Gross Vehicle Weight Rating.
HCR............................... High Compression Ratio.
HCRD.............................. High Compression Ratio Engine with
Cylinder Deactivation.
HCRE.............................. High Compression Ratio Engine with
Cooled Exhaust Gas Recirculation.
HEG............................... High Efficiency Gearbox.
HEV............................... Hybrid Electric Vehicle.
HFET.............................. Highway Fuel Economy Test.
HP................................ Horsepower.
HVAC.............................. Heating, Ventilation, and Air
Conditioning.
IAV............................... Ingenieurgesellschaft Auto und
Verkehr.
ICCT.............................. International Council on Clean
Transportation.
ICE............................... Internal Combustion Engine.
ICR............................... Information Collection Request.
IIHS.............................. Insurance Institute for Highway
Safety.
IRA............................... Inflation Reduction Act.
LCA............................... Lane Change Assist.
LD................................ Light-Duty.
LDW............................... Lane Departure Warning.
LDWF.............................. Light-Duty Work Factor.
LFP............................... Lithium Iron Phosphate.
LIVC.............................. Late Intake Valve Closing.
LKA............................... Lane Keep Assist.
MAD............................... Minimum Absolute Deviation.
MAGICC............................ Model for the Assessment of
Greenhouse Gas Induced Climate
Change.
MBTA.............................. Migratory Bird Treaty Act.
MDPCS............................. Minimum Domestic Passenger Car
Standard.
MDPV.............................. Medium-Duty Passenger Vehicle.
MOVES............................. Motor Vehicle Emission Simulator.
mpg............................... Miles Per Gallon.
mph............................... Miles Per Hour.
MR................................ Mass Reduction.
MR0............................... Base Level Mass Reduction
Technology.
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.
NCE............................... Non-Criteria Emission.
NEMS.............................. National Energy Modeling System.
NEPA.............................. National Environmental Policy Act.
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.
NTTAA............................. National Technology Transfer and
Advancement Act.
NVO............................... Negative Valve Overlaps.
gpm............................... gallons per mile.
OC................................ Off-Cycle.
OCR............................... Optical Character Recognition.
OEM............................... Original Equipment Manufacturer.
OHV............................... Overhead Valve.
OLS............................... Ordinary Least Square.
OMB............................... Office of Management and Budget.
OPEC.............................. Organization of the Petroleum
Exporting Countries.
ORNL.............................. Oak Ridge National Laboratory.
PAEB.............................. Pedestrian Automatic Emergency
Braking.
PC................................ Passenger Car.
PEF............................... Petroleum Equivalency Factor.
PHEV.............................. Plug-in Hybrid Electric Vehicle.
PM2.5............................. Particulate matter 2.5 microns or
less in diameter.
PPC............................... Passive Prechamber Combustion.
ppm............................... parts per million.
PRA............................... Paperwork Reduction Act of 1995.
PRIA.............................. Preliminary Regulatory Impact
Analysis.
ROLL.............................. Tire Rolling Resistance.

[[Page 56441]]

ROLL0............................. Base Level Tire Rolling Resistance.
ROLL10............................ Tire Rolling Resistance, 10%
Improvement.
ROLL20............................ Tire Rolling Resistance, 20%
Improvement.
ROLL30............................ Tire Rolling Resistance, 30%
Improvement.
RPE............................... Retail Price Equivalent.
RPM............................... Revolutions Per Minute.
RRC............................... Rolling Resistance Coefficient.
RWD............................... Rear-Wheel Drive.
SAE............................... Society of Automotive Engineers.
SEC............................... Securities and Exchange Commission.
SEIS.............................. Supplemental Environmental Impact
Statement.
SGDI.............................. Stoichiometric Gasoline Direct
Injection.
SHEV.............................. Strong Hybrid Electric Vehicle.
SHEVPS............................ Power-Split Strong Hybrid Electric
Vehicle.
SI................................ Spark Ignition.
SIP............................... State Implementation Plan.
SKIP.............................. Refers to skip input in Market Data
Input File.
SOC............................... State of Charge.
SOHC.............................. Single Overhead Camshaft.
SOX............................... Sulfur Oxide.
SS12V............................. 12V Micro Hybrid Start-Stop System.
SUV............................... Sport Utility Vehicle.
SwRI.............................. Southwest Research Institute.
TAR............................... Technical Assessment Report.
TS&D.............................. Fuel Transportation, Storage, and
Distribution.
TSD............................... Technical Support Document.
TURBO0............................ Reference baseline turbocharged
downsized technology.
TURBO1............................ Turbocharged downsized technology.
TURBO2............................ Advanced turbocharged downsized
technology.
TURBOAD........................... Turbocharged engine with advanced
cylinder deactivation.
TURBOD............................ Turbocharged engine with cylinder
deactivation.
TURBOE............................ Turbocharged engine with cooled
exhausted recirculation.
UMRA.............................. Unfunded Mandates Reform Act.
U.S............................... United States.
U.S.C............................. Unites States Code.
VCR............................... Variable Compression Ratio.
Volpe or Volpe Center............. Volpe National Transportation
Systems Center.
VMT............................... Vehicle Miles Traveled.
VSL............................... Value of a Statistical Life.
VTG............................... Variable Turbo Geometry.
VTGE.............................. Variable Turbo Geometry (Electric).
VVL............................... Variable Valve Lift.
VVT............................... Variable Valve Timing.
VWA............................... Volkswagen Group of America.
ZEV............................... Zero Emission Vehicle.
------------------------------------------------------------------------

Does this action apply to me?

This proposal affects companies that manufacture or sell new
passenger automobiles (passenger cars) and non-passenger automobiles
(light trucks), as defined under NHTSA's CAFE regulations.\1\ Regulated
categories and entities include:
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\1\ See 49 CFR part 523.

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[[Page 56442]]

[GRAPHIC] [TIFF OMITTED] TP05DE25.007

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 the NPRM Analysis
A. Why is NHTSA conducting this analysis?
1. What are the key components of NHTSA's analysis?
2. How do statutory requirements shape NHTSA's analysis?
3. What updated capabilities and assumptions does the current
model reflect as compared to the version used in the analysis of the
2024 final rule?
B. What is NHTSA analyzing?
C. What inputs does the compliance analysis require?
1. What inputs does the analysis require for 2022-2026?
2. What inputs does the compliance analysis require for 2027-
2031?
a. Technology Options and Pathways
b. Defining Manufacturers' Current Technology Positions in the
Analysis Fleet
c. Technology Effectiveness Values
d. Technology Costs
e. Simulating Tax Credits
f. Technology Applicability Equations and Rules
D. Technology Pathways, Effectiveness, and Cost
1. Engine Paths
2. Transmission Paths
3. Hybridization Paths
4. Road Load Reduction Paths
5. Mass Reduction
6. Aerodynamic Improvements
7. Low Rolling Resistance Tires
8. Simulating Air-Conditioning Efficiency and Off-Cycle
Technologies
E. Consumer Responses to Manufacturer Compliance Strategies
1. Consumer Responses to Manufacturer Compliance Strategies for
2027-2031
a. Macroeconomic and Consumer Behavior Assumptions
b. Fleet Composition
(1) Sales
(2) Scrappage
c. Changes in Vehicle-Miles Traveled
d. Changes to Fuel Consumption
F. Simulating Emissions Impacts of Regulatory Alternatives
G. Simulating Economic Impacts of Regulatory Alternatives
1. Private Costs and Benefits
2. External Costs and Benefits
H. Simulating Safety Effects of Regulatory Alternatives
1. Mass Reduction Impacts
2. Sales/Scrappage Impacts
3. Rebound Effect Impacts
4. Value of Safety Impacts
III. Regulatory Alternatives Considered in This NPRM
A. General Basis for Alternatives Considered
1. MYs 2022-2026
2. MYs 2027-2031
3. Minimum Domestic Passenger Car Standard Analysis Update
B. Regulatory Alternatives Considered
1. No-Action Alternatives for Passenger Cars and Light Trucks
a. No-Action Alternative for MYs 2022-2026 Amendment
b. No-Action Alternative for MYs 2027-2031 Amendment
2. Action Alternatives for Passenger Cars and Light Trucks
a. Action Alternatives for MYs 2022-2026 Amendment
(1) Alternative 1
(2) Alternative 2--Preferred Alternative
(3) Alternative 3
b. Action Alternatives for MYs 2027-2031 Amendment
(1) Alternative 1
(2) Alternative 2--Preferred Alternative
(3) Alternative 3
IV. Effects of the Regulatory Alternatives
A. Effects of the Regulatory Alternatives for MYs 2022-2026
B. Effects of the Regulatory Alternatives for 2027-2031
1. Effects on Vehicle Manufacturers
2. Effects on Society
3. Physical and Environmental Effects
4. Sensitivity Analysis
V. Basis for NHTSA's Tentative Conclusion That the Proposed
Standards Are Maximum Feasible
A. EPCA, as Amended by EISA
1. Administrative Provisions Governing CAFE Standard Setting
a. Lead Time, Amendatory Authority, and Number of Model Years
for Which Standards May Be Set at a Time
b. Separate Standards for Passenger Automobiles and Non-
Passenger Automobiles
c. Minimum Standards for Domestic Passenger Automobiles
d. Attribute-Based Standards Defined by a Mathematical Function
2. Maximum Feasible Standards
a. Technological Feasibility
b. Economic Practicability
c. The Effect of Other Motor Vehicle Standards of the Government
on Fuel Economy
d. The Need of the United States to Conserve Energy
(1) Consumer Costs and Fuel Prices
(2) National Balance of Payments
(3) Environmental Effects
(4) Foreign Policy Implications
e. Factors That NHTSA Is Prohibited From Considering
f. Additional Considerations Relevant to NHTSA's Statutory
Determination of Maximum Feasibility
B. Other Statutory Requirements
1. Administrative Procedure Act
2. National Environmental Policy Act
C. Evaluating the Statutory Factors and Other Considerations to
Arrive at the Proposed Standards
1. Why is NHTSA's tentative conclusion different from the 2020,
2022, and 2024 final rules?
2. Considerations Justifying the Proposed Standards
a. Technological Feasibility and the Effect of Other Motor
Vehicle Standards of the Government on Fuel Economy

[[Page 56443]]

b. Economic Practicability and Safety (Both Independently and as
a Subset of Economic Practicability)
c. The Need of the United States To Conserve Energy
3. Draft Supplemental Environmental Impact Statement Analysis
Results
D. Severability
VI. Compliance and Enforcement
A. Background and Overview of Compliance and Enforcement
B. Proposed Changes to the CAFE Program
1. Modification of Vehicle Classification in the CAFE Program
a. Non-Passenger Automobile Definition
b. Proposed Changes to Criteria for Off-Highway Capability
c. Proposed Changes to Criteria for Functional Performance
(1) Automobiles With Three or More Rows of Seating
(2) Light-Duty Work Factor
2. Removal of Credit Trading in the CAFE Program
3. Technical Amendments To Remove References to EPA's
Regulations for AC Efficiency and Off-Cycle Fuel Consumption
Improvement Values
4. Modification of Manufacturer Reporting Requirements
C. Technical Amendments
1. Technical Amendments To Remove Residual Mention of Fuel
Efficiency Standards for Trailers in NHTSA's Vehicle Classification
Regulations
2. Technical Amendment To Remove Heavy-Duty Trailers From the
List of Heavy-Duty Vehicle Regulatory Categories
3. Technical Amendments To Remove Civil Penalties for Non-
Compliance With Fuel Economy Standards From the CAFE Program
4. Additional Technical Amendments
a. Technical Amendments to Part 523
b. Technical Amendments to Part 531
c. Technical Amendments to Part 533
d. Technical Amendments to Part 536
e. Technical Amendments to Part 537
VII. Public Participation
VIII. Regulatory Notices and Analyses
A. Executive Order 12866, ``Regulatory Planning and Review'';
Executive Order 13563, ``Improving Regulation and Regulatory
Review''; Executive Order 14192, ``Unleashing Prosperity Through
Deregulation''; and Executive Order 14219, ``Ensuring Lawful
Governance and Implementing the President's `Department of
Government Efficiency' Deregulatory Initiative''
B. Environmental Considerations
1. National Environmental Policy Act
2. Clean Air Act as Applied to NHTSA's Proposed Rule
3. Endangered Species Act (ESA)
4. Other Regulatory Analyses Discussed in the Draft SEIS
5. Executive Order 13045: ``Protection of Children From
Environmental Health Risks and Safety Risks''
6. Executive Order 14154: ``Unleashing American Energy''
7. Executive Order 14173: ``Ending Illegal Discrimination and
Restoring Merit-Based Opportunity''
C. Regulatory Flexibility Act
D. Executive Order 13132 (``Federalism'')
E. Executive Order 12988 (``Civil Justice Reform'')
F. Executive Order 13175 (``Consultation and Coordination With
Indian Tribal Governments'')
G. Unfunded Mandates Reform Act
H. Regulation Identifier Number
I. National Technology Transfer and Advancement Act
J. Department of Energy Review
K. Paperwork Reduction Act
L. Rulemaking Summary, 5 U.S.C. 553(b)(4)
IX. Regulatory Text

I. Executive Summary

The relationship between the light-duty vehicle market and the CAFE
program has gone through several cycles over its almost 50-year
history. First created to require conservation of petroleum in response
to price shocks caused by the Arab oil embargoes of the 1970s, the CAFE
program has led not only to the desired improvements in fuel economy
but also created unintended responses from vehicle manufacturers--often
to the detriment of consumers.
Over the CAFE program's history, separate standards for the
passenger car and light truck fleets (referred to by law as passenger
automobiles and non-passenger automobiles) have led manufacturers to
reshape the market in unanticipated ways--such as by almost eliminating
the production of station wagons (passenger cars that generally have
more robust cargo capacity, adding mass and reducing fuel economy) in
favor of vehicles like minivans and crossover utility vehicles
(considered light trucks, and subject to less stringent standards).
Strict mile-per-gallon-based standards in the program's early years
also led manufacturers to seek significant reductions in vehicle size
and mass, leading to increased injury or fatality risk for occupants of
smaller vehicles involved in a crash.\2\ NHTSA sought to mitigate these
responses by creating attribute-based standards that relate the
``footprint'' size of vehicles to fuel economy, to some positive
effect.
---------------------------------------------------------------------------

\2\ Transportation Research Board and National Research Council,
Effectiveness and Impact of Corporate Average Fuel Economy (CAFE)
Standards, National Academies Press: Washington, DC (2002),
available at: <a href="https://nap.nationalacademies.org/catalog/10172/effectiveness-and-impact-of-corporate-average-fuel-economy-cafe-standards">https://nap.nationalacademies.org/catalog/10172/effectiveness-and-impact-of-corporate-average-fuel-economy-cafe-standards</a> (accessed: Feb. 7, 2024). This report describes at length
and quantifies the potential safety problem with average fuel
economy standards that specify a single numerical requirement for
the entire industry, noting that smaller and lighter vehicles
incentivized by those standards could be less safe for their
occupants.
---------------------------------------------------------------------------

Meanwhile, the U.S. Environmental Protection Agency (EPA) started
providing special fuel economy adjustments for technologies that had
potential for fuel economy improvements but were not measurable using
the laboratory test procedures (i.e., the ``two-cycle'' tests) for
vehicle fuel economy. This included accommodating adjustments to
efficiency values if manufacturers implemented preferred air
conditioning (AC) technologies, and if manufacturers installed special
technologies with purported fuel-saving benefits that could not be
captured on the aforementioned two-cycle tests, accordingly known as
``off-cycle'' (OC) technologies (e.g., vehicle stop/start functions
that shut off the engine when the vehicle has stopped). These
regulatory adjustments have led to widespread adoption of technologies
with uncertain real-world benefits, added costs, and, in many cases,
consumer backlash.
The creation of a system for inter-manufacturer credit trading--
intended to improve the cost-effectiveness of the CAFE program by
allowing manufacturers that could improve the fuel economy of their
fleets more cost-effectively to earn credits for exceeding fuel economy
standards and sell those credits to manufacturers that would need to
incur higher costs to meet fuel economy standards--has also resulted in
a windfall for EV-exclusive manufacturers that sell credits to other
non-EV manufacturers, which in turn pay for those credits with capital
that could be invested toward improving the fuel economy performance or
other desirable attributes of their traditional fleets. The enormous
fuel economy values assigned to EVs have, heretofore, been included in
the baseline fleet fuel economy for subsequent CAFE rulemakings upon
which stringency increases are applied--thereby significantly
increasing the fuel economy requirements for traditional gasoline- or
diesel-fueled fleets.\3\
---------------------------------------------------------------------------

\3\ In a hypothetical and simplified example, if the baseline
passenger car fleet of vehicles with an identical footprint
consisted of nine gasoline-powered vehicles achieving 30 mpg and one
EV achieving 150 mpg, the baseline fleet to which stringency
increases would apply would be measured at 42 mpg. When CAFE
standards are set unlawfully considering EV fuel economy,
manufacturers of gasoline-powered vehicles would face a challenge in
catching up to the overall fleet fuel economy, requiring
disproportionate investment in fuel-saving technologies, and
incentivizing the purchase of regulatory credits from the EV
manufacturer.
---------------------------------------------------------------------------

At the same time, the classification system that has long divided
the fleet between passenger cars (intended to

[[Page 56444]]

move passengers) and light trucks (intended to move cargo or operate
off road) no longer lives up to its anticipated use. Indeed, while 68
percent of the light-duty fleet meets the current light truck
regulatory definition, the majority of these vehicles (e.g., all-wheel
drive (AWD) crossover utility vehicles, vehicles with three or more
rows of seating, and vehicles that do not have an approach angle high
enough to handle an off-highway obstacle) cannot realistically operate
off road and have little value moving cargo. Instead, most of these
vehicles are designed and intended primarily to move passengers but
have additional features solely to meet regulatory definitions \4\--
resulting in little added functionality, reduced fuel economy
performance, added cost, and a fairly homogenous design language
lacking in creativity.
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\4\ Section VI discusses NHTSA's proposal to amend regulatory
definitions for passenger and non-passenger automobiles in detail
and includes examples of manufacturers excluding or including
specific features solely to meet regulatory definitions. Two
examples discussed in more detail in Section VI include
manufacturers discontinuing FWD versions of vehicles after NHTSA
properly reclassified over 1 million FWD automobiles as passenger
automobiles in line with EPCA and opting to instead manufacture only
AWD or 4WD versions to keep more of their products in the non-
passenger automobile fleets (74 FR 14196, Mar. 30, 2009), and
manufacturers including aerodynamic technologies to increase on-
highway functionality instead of opting to meet approach angle
requirements, which would make the vehicle more capable of
approaching off-highway obstacles and, thus, more off-highway
capable.
---------------------------------------------------------------------------

While the CAFE program was intended to push manufacturers to
improve fuel economy while preserving their ability to design and
produce vehicles that meet market demands, the system has spun off its
axis and requires recalibration. Instead of allowing manufacturers to
design and produce vehicles they believe their customers will want and
need, while spreading real-world fuel economy improvements across their
fleets, the system has increasingly led manufacturers to try to fit
square vehicle pegs in round classification holes to force the adoption
of technologies that do not meet the demands of American families
simply to obtain on-paper fuel economy improvements that may have
little basis in reality. All of this adds inefficiency and cost--
pushing even more consumers out of an already unaffordable new car
market.
By delegation of authority from the Secretary of Transportation
(the Secretary), NHTSA is proposing to amend the previously promulgated
CAFE standards applicable to passenger and non-passenger automobiles
(colloquially referred to as passenger cars and light trucks, and
together known as light-duty vehicles) produced for MYs 2022-2026 and
MYs 2027-2031. Proposing amended standards beginning with MY 2022 is
consistent with the Secretary's direction in the January 28, 2025,
memorandum titled ``Fixing the CAFE Program'' and is also the earliest
model year for which NHTSA has not concluded CAFE compliance
proceedings; additional discussion regarding NHTSA's proposal to amend
standards beginning in MY 2022 can be found in Section V.
Consistent with the terms of the CAFE program mandated in the
Energy Policy and Conservation Act (EPCA), as amended by the Energy
Independence and Security Act (EISA) and other laws (codified in
chapter 329 of title 49, United States Code), the fuel economy
standards proposed herein are founded on light-duty vehicles powered by
gasoline and diesel fuels, a category that includes non-plug-in hybrid
vehicles.\5\ In formulating the proposed standards, NHTSA has not
considered the imputed fuel-economy performance of EVs or the electric
operation of plug-in hybrid electric vehicles (PHEVs). This approach
marks a change from previous rulemakings, as described above, but
brings the CAFE program into compliance with statutory restrictions.
---------------------------------------------------------------------------

\5\ Non-plug-in hybrid vehicles are not dual-fueled vehicles
under Chapter 329 because any electricity generated by the electric
motors or other electric components are generated solely by the
petroleum-fueled engine and the batteries are incapable of charging
from an external source: ``a vehicle which is entirely dependent on
a petroleum fuel for its motive power, regardless of whether
electricity is used in the powertrain, is powered by petroleum.'' 63
FR 66066 (Dec. 1, 1998).
---------------------------------------------------------------------------

This proposed rule fulfills NHTSA's statutory obligation to set
CAFE standards at the maximum feasible level that the agency determines
vehicle manufacturers can achieve in each model year, balancing four
key factors: technological feasibility, economic practicability, the
need of the Nation to conserve energy, and the effect of other Federal
regulations on fuel economy.\6\ This balancing must take into account
current and projected circumstances and cannot consider the
availability of alternative fuel technologies (e.g., EVs or PHEV
electric operation), or compliance credits.\7\ This action is also
consistent with Executive Order (E.O.) 14148, ``Initial Rescissions of
Harmful Executive Orders and Actions,'' \8\ and E.O. 14154,
``Unleashing American Energy,'' \9\ as well as the Secretarial
memorandum titled ``Fixing the CAFE Program.'' \10\
---------------------------------------------------------------------------

\6\ 49 U.S.C. 32902(a) and (f).
\7\ 49 U.S.C. 32902(h).
\8\ 90 FR 8237 (Jan. 28, 2025).
\9\ 90 FR 8353 (Jan. 29, 2025).
\10\ See DOT, Memorandum: Fixing the CAFE Program (2025),
available at: <a href="https://www.transportation.gov/briefing-room/memorandum-fixing-cafe-program">https://www.transportation.gov/briefing-room/memorandum-fixing-cafe-program</a> (accessed: Sept. 10, 2025).
---------------------------------------------------------------------------

The standards presented in this proposal significantly differ from
those finalized in the 2020, 2022, and 2024 rules because, in
formulating those prior standards, NHTSA considered both the fuel
economy of EVs and PHEVs and compliance credits that could be earned
when a manufacturer over-complied with an applicable fuel economy
standard impermissibly. As a result, the fuel economy standards
previously established by NHTSA for passenger cars and light trucks for
MYs 2022-2031 failed to satisfy substantive statutory requirements.
NHTSA is proposing in this NPRM the ``maximum feasible'' amended fuel
economy requirements for the model years in question that best reflect
and balance the various practical considerations and limitations
mandated for the CAFE program.
This rulemaking is intended to establish maximum feasible fuel
economy standards while restoring the functionality intended by
Congress. It marks a significant reset. As an initial matter, NHTSA
proposes to remove consideration of prohibited technologies and credits
from every aspect of the standards development process to bring the
program back within its statutory constraints. NHTSA discussed
extensively its prior unlawful consideration of prohibited technologies
and credits in the standards development process in the final rule,
Resetting the Corporate Average Fuel Economy Program,\11\ and includes
a more detailed discussion in Section V, below.
---------------------------------------------------------------------------

\11\ 90 FR 24518 (June 11, 2025).
---------------------------------------------------------------------------

NHTSA is proposing to remove consideration of AC efficiency and OC
fuel consumption improvement values (FCIVs) from its standard-setting
analysis starting with MY 2028, which is the first year in which a
removal of FCIVs could go into effect.\12\ This change will ensure that
NHTSA's CAFE standards are achievable without the implementation of
technologies not demanded by consumers and with questionable fuel
economy benefits.
---------------------------------------------------------------------------

\12\ 49 U.S.C. 32904(d).
---------------------------------------------------------------------------

The agency also proposes to eliminate the inter-manufacturer credit
trading program (which is authorized, but not required, by 49 U.S.C.
32903(f)) beginning with MY 2028. This change in the program is long
overdue. While NHTSA does not consider the availability of credits or
credit trading in

[[Page 56445]]

establishing standards, the agency believes that eliminating inter-
manufacturer credit trading will encourage manufacturers to provide for
steady improvement in fuel economy across their fleets over time, as
opposed to relying upon credits acquired from third-party EV
manufacturers. NHTSA recognizes that manufacturers have made
investments in particular compliance pathways--pathways that may
include purchasing credits from other manufacturers even though the
availability of those credits is uncertain--and is proposing this
change beginning with MY 2028 to provide manufacturers with adequate
transition time, in recognition of any particular reliance interests in
the trading program to achieve compliance, before the program ends.
However, NHTSA is proposing standards in this notice at levels that do
not consider the use of compliance credits, thus minimizing any impacts
that this change may have on manufacturers' decisions about compliance
pathways. Moreover, this change will not impact automakers' ability to
transfer earned credits between different categories of vehicles in
their own fleets or carry their own credits forwards and backwards
across model years, as prescribed by statute.
The agency also proposes a substantial reclassification of the
light-duty fleet in a manner intended by Congress in creating the CAFE
program--with the passenger car fleet consisting of vehicles primarily
designed to move people, and the light truck fleet consisting of
vehicles primarily designed to operate off road or move cargo. NHTSA
believes these proposed changes are necessary to restore the CAFE
program to its intended orbit but recognizes the changes will introduce
significant design consideration for manufacturers. Moving a large
fraction of vehicles previously classified as light trucks into a
manufacturer's passenger vehicle fleet will have a significant effect
on the overall fuel economy performance of the manufacturer's passenger
fleet--after all, even if based upon the same platform as a passenger
car, the additional vehicle height adds significant mass and decreases
fuel economy. Meanwhile, removal of vehicles from a manufacturer's
light truck fleet will leave that fleet consisting of even heavier and
less aerodynamic vehicles, such as large sports utility vehicles and
pickup trucks, thereby decreasing the overall average fuel economy of
the light truck fleet. Accordingly, while a manufacturer's combined
overall fleet fuel economy may remain the same, both its passenger car
and light truck fleets will necessarily achieve lower measured fuel
economy. NHTSA is also proposing to update the classification criteria
from technology-based to performance-based standards where applicable,
consistent with best practices for regulation. This proposal intends to
take these changes into account through amendments to both the
footprint curves and standards applicable to various points within the
curves. NHTSA intends that, as a result of this proposed update,
automobiles classified as non-passenger will exhibit true non-passenger
capabilities that display relevant off-highway vehicle attributes such
as approach angle and running clearance or include design features that
provide higher payload and towing abilities for transporting property.
By surveying the measured fuel economy performance of gasoline- and
diesel-powered passenger cars and light trucks produced for the U.S.
market in MY 2022, NHTSA has created a maximum feasible foundation from
which to establish standards for subsequent model years. NHTSA is
proposing to set fuel economy standards that increase from the newly
proposed MY 2022 standards at a rate of 0.5 percent per year through MY
2026 followed by 0.25 percent per year through MY 2031, with MY 2027
stringency as a bridge between the two sets of standards.
In addition to the proposed standards (also referred to as the
``Preferred Alternative'') NHTSA considers a range of regulatory
alternatives for each fleet, consistent with the agency's obligations
under the Administrative Procedure Act (APA), National Environmental
Policy Act (NEPA), and E.O. 12866. The regulatory alternatives are as
follows:

[[Page 56446]]

[GRAPHIC] [TIFF OMITTED] TP05DE25.008

NHTSA \13\ has concluded tentatively that the levels of standards
represented by Alternative 2 are the maximum feasible level for these
model years, as discussed in more detail in Section V of this preamble.
NHTSA has determined that the proposed standards satisfy the statutory
requirements of maximum feasibility across the full range of gasoline-
and diesel-powered vehicles currently on the market. These standards
will be appropriately stringent in promoting fuel efficiency in the
Nation's light-duty vehicle fleet while remaining technologically
feasible and economically practicable to achieve without regard to EV
dedicated fuel economy or PHEV electric operation. The proposed
standards also consider the effect of other Federal regulatory mandates
on the fuel economy performance of new motor vehicles, as well as the
need of the Nation to conserve energy. NHTSA has tentatively determined
that it is both reasonable and congruent with EPCA's energy
conservation goals to weigh the need of the United States to conserve
energy such that vehicle fuel economy standards require continuous
improvements over time, but at sustainable levels for manufacturers,
consumers, and society at large. In particular, the diminishing effects
attributable to fuel economy improvements from higher standards
moderates against weighing the need of the United States to conserve
energy too heavily compared to the other statutory factors.\14\
Manufacturers have limited supplies of capital for technological
advancement and are constrained in recovering those investments by what
consumers can afford to pay for technological innovations in new
vehicles. Maximum feasible fuel economy standards, when set
appropriately weighing economic practicability, should never
incentivize manufacturers to add technology that consumers reject at
the cost of investments in, or application of, for instance, vehicle
safety technologies. Instead, when truly maximum feasible standards
apply, manufacturers should be able continually to develop, and apply,
both proven fuel-saving and safety-enhancing technologies in such a
manner that allows consumers both to desire and to afford the new
vehicle.
---------------------------------------------------------------------------

\13\ Percentages in the table represent the year over year
reduction in gal/mile applied to the mpg values on the target
curves. The reduction in gal/mile results in an increased mpg.
\14\ As an example, a vehicle owner who drives a light vehicle
15,000 miles per year and trades in a vehicle with fuel economy of
15 mpg for one with fuel economy of 20 mpg, will reduce their annual
fuel consumption from 1,000 gallons to 750 gallons--saving 250
gallons annually. If, however, that owner trades in a vehicle with
fuel economy of 30 mpg for one with fuel economy of 40 mpg, then the
owner's annual gasoline consumption would drop from 500 gallons/year
to 375 gallons/year--a fuel savings of only 125 gallons even though
the mpg improvement is twice as large. Going from 40 to 50 mpg would
save only 75 gallons/year. Yet each additional fuel economy
improvement becomes much more expensive as the easiest to achieve
low-cost technological improvement options are exhausted.
---------------------------------------------------------------------------

NHTSA's preliminary conclusion is that this decision best comports
with statutory requirements and is justified to reset standards set in
final rules issued in 2020, 2022, and 2024, respectively, which were
established improperly above the maximum feasible level because NHTSA
considered statutorily prohibited factors in establishing those

[[Page 56447]]

standards.\15\ Those rules resulted in distortions in the marketplace,
which this proposed rule would minimize. These distortions include
major non-market-based changes in automobile designs and the
introduction of fundamental alterations in their production processes
not primarily driven by market demand.
---------------------------------------------------------------------------

\15\ 85 FR 24174 (Apr. 30, 2020); 87 FR 25710 (May 2, 2022); 89
FR 52540 (June 24, 2024).
---------------------------------------------------------------------------

Increasing the stringency of standards at modest annual rates,
following a reset to eliminate the consideration of impermissible
factors that were applied in setting the current standards, and coupled
with a re-examination of the shape of the fuel economy target functions
and the vehicle classification definitions, best comports with
statutory requirements. Moreover, the level, shape, and applicability
of the standards to the proposed passenger and non-passenger automobile
fleets are justified by the inappropriate distortions the existing
regulations have caused in the marketplace. Those regulations resulted
in unnecessary regulatory burdens that did not further statutory
purposes because the standards were not attainable for the gasoline-
and diesel-powered vehicle fleet.
The proposed CAFE standards remain vehicle-footprint-based, like
the current CAFE standards in effect since MY 2011. 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. This means that the
standards are defined by mathematical equations that represent
constrained linear functions relating vehicle footprint to fuel economy
targets for passenger cars and light trucks.\16\ For this proposal,
NHTSA has updated the mathematical functions (i.e., the target curves
relating footprint to fuel economy) for passenger cars and light trucks
based on the latest available data. NHTSA has concluded preliminarily,
based on this data, that the relationship between footprint and fuel
economy has shifted from MY 2008 (the model year on which the current
curves are based) and it is thus appropriate to modify the mathematical
functions accordingly. NHTSA has also updated the functions that would
be applied beginning in MY 2028 to reflect changes based on the
proposed reclassified fleet.
---------------------------------------------------------------------------

\16\ 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.
---------------------------------------------------------------------------

NHTSA estimates that the proposed standards would correspond to a
combined industry fleetwide average of roughly 34.5 mpg in MY 2031 for
passenger cars and light trucks.\17\ NHTSA notes that this is a
projection, since the actual CAFE standards are the footprint target
curves for passenger cars and light trucks. This is important because
it means that the ultimate fleetwide levels will vary depending on the
mix of vehicles that manufacturers produce for sale in those model
years. NHTSA also calculates and presents ``estimated achieved'' fuel
economy levels, which differ somewhat from the estimated required
levels for each fleet, for each year.\18\ Note that the industry-
average required and achieved values presented below reflect the end of
manufacturers' ability to claim AC and FCIV adjustments, beginning in
MY 2028, and updated vehicle classification regulatory definitions,
which are also applicable beginning in MY 2028.
---------------------------------------------------------------------------

\17\ NHTSA notes both that real-world fuel economy is generally
20-30 percent lower than the estimated required CAFE level stated
above, since 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) must use the same procedures used for MY 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, AC 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 United States, effective with MY 2008 vehicles.
\18\ NHTSA's analysis reflects that almost all manufacturers
make the technological improvements prompted by CAFE standards at
times that coincide with existing product ``refresh'' and
``redesign'' cycles, rather than unrealistically 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. See the Draft
TSD and preamble Section II for additional discussion about
manufacturer refresh and redesign cycles.
---------------------------------------------------------------------------

For simplification, NHTSA provides industry-wide mpg estimates
corresponding to the proposed standards in the table below but
reiterates that the coefficients that define the mathematical functions
comprise the actual standards.

[[Page 56448]]

[GRAPHIC] [TIFF OMITTED] TP05DE25.009

To the extent that manufacturers appear to be over-complying with
required fuel economy levels in MY 2027, NHTSA notes that this is due
to factors including previous application of fuel economy technologies
required by standards set improperly for prior model years that
unlawfully considered prohibited alternative fuel (e.g., EV) technology
applications. Once the program is restored to its intended strictures
and standards are established that consider all statutory factors and
limitations appropriately, manufacturers that previously applied
technologies to meet exaggerated requirements will have relief, while
manufacturers that faced certain penalties can continue to improve
efficiency to meet maximum feasible standards. NHTSA's review of
achieved compliance at the manufacturer level also shows that, while
some manufacturers manage to achieve greater over-compliance, other
manufacturers are expected to achieve compliance values that will track
the levels of the new standards more closely. In addition, NHTSA
believes that the proposed standards established for model years prior
to the significant MY 2028 fleet reclassification will allow
manufacturers to plan strategically with sufficient lead time to manage
that transition within their projected model year sales cycles. For all
fleets, average requirements and average achieved CAFE levels will
depend ultimately on manufacturer and consumer response to standards,
technology developments, economic conditions, fuel prices, and other
factors.
---------------------------------------------------------------------------

\19\ There is no 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.
---------------------------------------------------------------------------

NHTSA is also proposing new minimum domestic passenger car CAFE
standards (MDPCS) for MYs 2022-2026 and MYs 2027-2031 as required by
EISA, which are applied to passenger cars that are deemed to be
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 model year; these standards
are shown in Table I-3 below. NHTSA continues to apply an offset
(albeit a far smaller one than was first used in the 2020 final rule
and applied to the 2022 and 2024 final rules) when calculating the
MDPCSs for MYs 2027-2031, reflecting prior differences between
passenger car footprints forecast originally by the agency and
passenger car footprints as they occurred in the real world. The
proposed minimum domestic passenger car standards (MDPCS) for each
model year are as shown in the table below.
[GRAPHIC] [TIFF OMITTED] TP05DE25.010

[[Page 56449]]

NHTSA uses the CAFE Compliance and Effects Modeling System (the
CAFE Model) developed and maintained by the Volpe National
Transportation Systems Center (Volpe Center or Volpe) as a tool for
assessing the likely regulatory effects of the proposal and various
regulatory alternatives. The Model does not determine which standards
satisfy the requirements of EPCA, and no model can predict precisely
the engineering configurations automakers are likely to introduce in
response to evolving trends in market demand. However, the analysis
developed using the CAFE Model provides further support for NHTSA's
preliminary judgment that the standards proposed in this rule are the
maximum standards that are technologically feasible and economically
practicable for the gasoline- and diesel-powered vehicles covered by
the proposed rule, considering the effect of other motor vehicle
standards of the Government on fuel economy, and the need of the United
States to conserve energy.
One significant modification from previous standard-setting
proceedings and previous applications of the CAFE Model is that NHTSA
did not include EVs in the base fleet for analysis purposes and did not
consider or model the potential production of EVs as a CAFE compliance
strategy for automakers. Section 32902 of chapter 49 directs NHTSA to
establish fuel economy standards that are feasible and practicable for
gasoline- and diesel-powered vehicles without regard to any reliance on
non-gasoline- or diesel-powered alternatives. Automakers, of course,
are free to produce EVs in response to market demand, and their
production and sale of EVs will earn credit toward compliance with the
CAFE standards in accordance with the ``petroleum equivalency factor,''
or ``PEF,'' prescribed by the Department of Energy (DOE).\20\
---------------------------------------------------------------------------

\20\ 49 U.S.C. 32904(a)(2)(B); Public Law 96-185, 93 Stat. 1324
(1980). <a href="https://www.congress.gov/96/statute/STATUTE-93/STATUTE-93-Pg1324.pdf">https://www.congress.gov/96/statute/STATUTE-93/STATUTE-93-Pg1324.pdf</a>; 10 CFR part 474.
---------------------------------------------------------------------------

Additional updates to the CAFE Model and its inputs since the 2024
final rule include updating the Market Data Input File to reflect the
change in analysis fleet from MYs 2022-2024, updating the modeling
capability to allow for vehicle reclassification, updating the
Scenarios Input File to set the value of civil penalties at zero,\21\
updating the Parameters Input File to set the monetary value of changes
in non-criteria emissions at zero, updating other economic values, such
as rebound elasticity and the payback periods, and updating fuel price
projections using the 2025 Annual Energy Outlook's (AEO) Alternative
Transportation Case. These and other updates are described in more
detail in Section II and the Draft TSD.
---------------------------------------------------------------------------

\21\ See Public Law 119-21, 139 Stat. 72 (July 4, 2025). <a href="https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf">https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf</a>.
---------------------------------------------------------------------------

NHTSA estimates that this proposed rule would reduce the average
up-front vehicle costs due to CAFE standards by approximately $900,
cutting in half what consumers might expect to pay as a result of
increased requirements under the No-Action Alternative. NHTSA also
estimates that this rule will be net beneficial economically for
society. The tables below summarize estimates of selected impacts
viewed from both the MY and calendar year (CY) perspectives,\22\ for
each of the regulatory alternatives, relative to the No-Action
Alternative.
---------------------------------------------------------------------------

\22\ The bulk of the analysis for passenger cars and light
trucks presents a ``model year'' perspective rather than a
``calendar year'' perspective. The model year perspective considers
the lifetime impacts attributable to all passenger cars and light
trucks produced through MY 2031, accounting for the operation of
these vehicles over their entire lives (with some MY 2031 vehicles
estimated to be in service as late as 2050). This approach
emphasizes the role of the model years for which new standards are
being proposed. The calendar year perspective, on the other hand,
includes the annual impacts attributable to all vehicles estimated
to be in service in each calendar year for which the analysis
includes a representation of the entire registered light-duty fleet.
For this proposed rule, this calendar year perspective covers each
of CYs 2024-2050. Compared to the model year perspective, the
calendar year perspective includes model years of vehicles produced
in the longer term, beyond those model years for which standards are
being proposed.
\23\ For this and similar tables in this section, net benefits
may differ from benefits minus costs due to rounding.
[GRAPHIC] [TIFF OMITTED] TP05DE25.011

[[Page 56450]]

The current estimates of costs and benefits are important
considerations, performed as directed by E.O. 12866, and also serve as
an informative data point in NHTSA's consideration of the factors that
NHTSA is required to balance by statute when determining maximum
feasible standards. NHTSA concludes, for the purposes of this proposal,
that Alternative 2 is maximum feasible on the basis of these respective
factors. NHTSA also considered several sensitivity cases by varying
different inputs and concluded that, even when varying inputs resulted
in changes to net benefits, those changes were not significant enough
to alter the tentative conclusion that Alternative 2 is maximum
feasible.
Finally, NHTSA has computed ``annualized'' benefits and costs
relative to the No-Action Alternative, as follows:
---------------------------------------------------------------------------

\24\ For this and similar tables in this section, net benefits
may differ from benefits minus costs due to rounding.
[GRAPHIC] [TIFF OMITTED] TP05DE25.012

Though NHTSA is prohibited from considering the availability of
certain flexibilities in making its determination about the levels of
CAFE standards that would be maximum feasible, manufacturers have a
variety of flexibilities available to aid their compliance. NHTSA is
proposing certain changes to these flexibilities and other features of
the CAFE program as shown in Table I-6, and as described further in
Section VI of this preamble.
BILLING CODE 4910-59-P

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[[Page 56452]]

[GRAPHIC] [TIFF OMITTED] TP05DE25.014

[[Page 56453]]

[GRAPHIC] [TIFF OMITTED] TP05DE25.015

BILLING CODE 4910-59-C
The following sections of this preamble discuss the technical
foundation for NHTSA's analysis, the regulatory alternatives considered
in this proposed rule, 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 for this action
consists of this proposed rule, a Draft Technical Support Document
(Draft TSD), a Preliminary Regulatory Impact Analysis (PRIA), and a
Draft SEIS, along with extensive analytical documentation, supporting
references, and many other resources. Most of these resources are
available on NHTSA's website,\26\ 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. NHTSA
seeks comment on all aspects of this proposal and seeks comment on
particular topics where indicated in each Section.
---------------------------------------------------------------------------

\25\ DOT will update the CAFE civil penalties regulations in 49
CFR 578.6(h) to reflect the statutory amendment in section 40006 of
Public Law 119-21 in the next DOT-wide annual civil penalties update
rulemaking.
\26\ See NHTSA, Corporate Average Fuel Economy, Last revised:
2023, <a href="https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy">https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy</a> (accessed: Sept. 10, 2025).
---------------------------------------------------------------------------

II. Technical Foundation for the NPRM Analysis

A. Why is NHTSA conducting this analysis?

When NHTSA promulgates new regulations or amends its existing
regulations, it generally presents an analysis that estimates the
impacts of those regulations, including the impacts of other regulatory
alternatives it considered during the rulemaking. These analyses derive
from statutes such as the APA \27\ and the National Environmental
Policy Act (NEPA),\28\ from Executive orders (such as E.O. 12866),\29\
and from other administrative guidance (e.g., Office of Management and
Budget (OMB) Circular A-4).\30\ For this analysis in particular, EPCA
contains several requirements governing the scope and nature of fuel
economy standard setting.\31\ Among these, some have been in place
since EPCA was first signed into law in 1975, some were added in the
Alternative Motor Fuels Act of 1988 (AMFA) \32\ and in the Energy
Policy Act of 1992,\33\ and others were added in 2007 when Congress

[[Page 56454]]

passed the EISA.\34\ Most recently, One Big Beautiful Bill Act (OB3)
amended EPCA's civil penalty provisions.\35\
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\27\ Codified in 5 U.S.C. 551-559.
\28\ Codified in 42 U.S.C. 4321-4347.
\29\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993).
\30\ Office of Management and Budget, Circular A-4 (Sept. 17,
2003), available at: <a href="https://www.whitehouse.gov/wp-content/uploads/2025/08/CircularA-4.pdf">https://www.whitehouse.gov/wp-content/uploads/2025/08/CircularA-4.pdf</a> (accessed Sept. 10, 2025).
\31\ Public Law 94-163, 89 Stat. 871 (Dec. 22, 1975). <a href="https://www.govinfo.gov/content/pkg/STATUTE-89/pdf/STATUTE-89-Pg871.pdf">https://www.govinfo.gov/content/pkg/STATUTE-89/pdf/STATUTE-89-Pg871.pdf</a>.
\32\ Public Law 100-494, 102 Stat. 2441 (Oct. 14, 1988). <a href="https://www.govinfo.gov/content/pkg/STATUTE-102/pdf/STATUTE-102-Pg2441.pdf">https://www.govinfo.gov/content/pkg/STATUTE-102/pdf/STATUTE-102-Pg2441.pdf</a>.
\33\ Public Law 102-486, 106 Stat. 2776 (Oct. 24, 1992). <a href="https://www.govinfo.gov/content/pkg/STATUTE-106/pdf/STATUTE-106-Pg2776.pdf">https://www.govinfo.gov/content/pkg/STATUTE-106/pdf/STATUTE-106-Pg2776.pdf</a>.
\34\ Public Law 110-140, 121 Stat. 1492 (Dec. 19, 2007). <a href="https://www.govinfo.gov/content/pkg/STATUTE-121/pdf/STATUTE-121-Pg1492.pdf">https://www.govinfo.gov/content/pkg/STATUTE-121/pdf/STATUTE-121-Pg1492.pdf</a>.
\35\ Public Law 119-21, 139 Stat. 72 (July 4, 2025). <a href="https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf">https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf</a>.
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These statutes contain a variety of requirements for which NHTSA
seeks to account in its analysis. NHTSA captures all of these
requirements by presenting 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 various express statutory requirements for the CAFE
program (e.g., passenger cars and light trucks must be regulated
separately; and the standard for each fleet must be set at the maximum
feasible level in each model year). NHTSA's standards are thus
supported by, though not dictated by, extensive analysis of potential
impacts of the regulatory alternatives under consideration. Together
with this preamble, a Draft TSD, a PRIA, and a Draft SEIS provide a
detailed enumeration of related analysis methods, estimates,
assumptions, and results. These additional analyses can be found in the
rulemaking docket for this proposed rule and on NHTSA's website.\36\
\37\
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\36\ Docket Nos. NHTSA-2025-0491; NHTSA-2025-0490.
\37\ See NHTSA, Corporate Average Fuel Economy, Last revised:
2023, 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: Sept. 10, 2025).
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This section provides further detail on the key features and
components of NHTSA's standard-setting (also known as ``constrained'')
analysis. NHTSA's standard-setting analysis reflects statutory
limitations on what NHTSA can consider when determining maximum
feasible CAFE standards. In determining maximum feasible fuel economy
levels, ``the Secretary of Transportation--(1) may not consider the
fuel economy of dedicated automobiles; (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.'' \38\ NHTSA also conducts an
``unconstrained'' CAFE Model analysis to evaluate, as required by NEPA,
the reasonably foreseeable environmental effects of its proposed action
and a reasonable range of alternatives that meet the purpose and need
for the proposed action.\39\ The technical assumptions for EIS
simulations are discussed in the Draft EIS Appendix C.
---------------------------------------------------------------------------

\38\ 49 U.S.C. 32902(h).
\39\ 42 U.S.C. 4332.
---------------------------------------------------------------------------

This section also describes how NHTSA's analysis has been
constructed specifically to reflect other governing law applicable to
CAFE standards, reviews how NHTSA's analysis has been updated to
represent relevant statutory provisions more closely, and describes
additional technical work recently conducted by the agency. The
analysis for this proposed rule aids NHTSA in implementing its
statutory obligations, including the weighing of various
considerations, by informing decision-makers about the estimated
effects of different regulatory alternatives.
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 are unknown
or 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 ``reference fleet'' containing, among other things, production
volumes and fuel economy levels of specific configurations of specific
vehicle models produced for sale in the United States. 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'' factor, 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).
In coordination with the DOT Volpe National Transportation Systems
Center (Volpe or the Volpe Center), NHTSA uses the CAFE Compliance and
Effects Modeling System (CAFE Model or the Model) to simulate and
analyze manufacturers' potential responses to new CAFE standards and to
estimate various impacts of those responses. NHTSA has used the CAFE
Model to perform analyses supporting every CAFE rulemaking since 2001.
Working together, NHTSA and Volpe ensure that the CAFE Model's
operation reflects the statutory directives discussed in more detail in
Section II below.
The CAFE Model first estimates how vehicle manufacturers might
respond to a given regulatory scenario; from that potential compliance
solution, the system estimates what impact that response will have on
fuel consumption, emissions, safety impacts, and economic
externalities. The following section summarizes information necessary
to understand the analysis, while Draft TSD Chapter 2 and the CAFE
Model Documentation present additional details on the Model's
operation.
The CAFE Model may be characterized as an integrated system of
models that estimate the impact of various policy options. 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). Importantly, the
modeling system does not determine the form or stringency of the
standards, which must be developed in consideration of statutory
factors that must be balanced by policy-makers. Instead, the CAFE 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 and light truck regulatory classes,
and stringency of the standards for each model year to be analyzed. For
example, a regulatory scenario may define 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.\40\ The compliance simulation
then attempts to bring each

[[Page 56455]]

manufacturer into compliance with the standards defined by the
regulatory scenario contained within an input file developed by the
user.
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\40\ 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 proposed rule 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>.
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Estimating impacts involves calculating resulting changes in new
vehicle costs, estimating a variety of costs (e.g., for fuel
expenditures or reduced or increased technology costs) and effects
(e.g., gallons of fuel used by the fleet) 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, operating costs, and vehicle price on consumer
demand for light-duty vehicles). Both basic analytical elements involve
the application of many inputs. Many of these inputs are developed
outside of the Model and not by the Model. For example, the Model
applies fuel price projections from DOE; it does not estimate fuel
prices.
NHTSA also uses EPA's Motor Vehicle Emission Simulator (MOVES)
model to estimate ``vehicle'' or ``downstream'' emission factors for
criteria pollutants \41\ and uses four DOE and DOE-sponsored models to
develop inputs to the CAFE Model, including three developed and
maintained by DOE's Argonne National Laboratory (Argonne). The agency
uses the National Energy Modeling System (NEMS) of DOE's Energy
Information Administration (EIA) to estimate fuel prices \42\ and uses
Argonne's Greenhouse gases, Regulated Emissions, and Energy use in
Transportation (GREET) Model to estimate emissions rates from fuel
production and distribution processes.\43\ DOT also sponsors Argonne to
run its Autonomie full-vehicle modeling and simulation system to
estimate the fuel economy impacts for over a million combinations of
technologies and vehicle types.\44\ The Draft TSD and PRIA describe
details of the agency's use of these models. In addition, as discussed
in the Draft SEIS accompanying this proposed rule, NHTSA relied on a
range of models to estimate various environmental impacts.
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\41\ See <a href="https://www.epa.gov/moves">https://www.epa.gov/moves</a>. This proposed rule uses
version MOVES5 (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>.
\42\ See <a href="https://www.eia.gov/outlooks/aeo/">https://www.eia.gov/outlooks/aeo/</a>. This proposed rule
uses fuel prices estimated using the Annual Energy Outlook (AEO)
2025 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>.
\43\ Information regarding GREET is available at <a href="https://greet.anl.gov/">https://greet.anl.gov/</a>. This proposed rule uses the R&D GREET 2023 version.
\44\ As part of the Argonne simulation effort, individual
technology combinations simulated in Autonomie were paired with
Argonne'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 Argonne's BatPaC model is available at <a href="https://www.anl.gov/cse/electrochemical-chemical-TEA">https://www.anl.gov/cse/electrochemical-chemical-TEA</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>.
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To prepare for the analysis that supports this proposed rule, DOT
has continued to refine and expand the capabilities of the CAFE Model.
As examples, and as discussed in more detail below, the reference fleet
uses mid-MY 2024 compliance data (the most recent available data at the
time of the analysis) and includes the capability (in addition to
capabilities integrated into the modeling system) to account for
proposed changes to the regulatory vehicle classification definitions.
The analysis also employs separate input files for the modeling runs
that NHTSA uses for its standard-setting analysis, which excludes the
49 U.S.C. 32902(h) factors that NHTSA cannot consider (constrained
analysis), and the modeling runs that NHTSA uses for its analysis of
impacts under the National Environmental Policy Act, which does not
exclude the 49 U.S.C. 32902(h) factors (unconstrained analysis), and
those input files have been updated accordingly. Common to both
analyses are routine updates to dollar year values (e.g., 2021$ to
2024$) or routine updates to gas price projections. Some other updates,
like updates to manufacturer credit banks, are confined to the
unconstrained analysis only and are discussed further in the Draft SEIS
Appendix C. The values of many inputs remain uncertain, and NHTSA has
conducted sensitivity analyses around selected inputs to attempt to
capture some of that uncertainty. These changes reflect DOT's long-
standing commitment to ongoing refinement of its approach to estimating
the potential impacts of new CAFE standards. These and other updated
analytical inputs are outlined in Section II below and discussed in
detail in the Draft TSD and PRIA.
2. How do statutory requirements shape NHTSA's analysis?
Multiple requirements govern the scope and nature of CAFE standard
setting; the specific requirements regarding the technical
characteristics of CAFE standards and the analysis thereof include, but
are not limited to, the following:
Corporate Average Standards: 49 U.S.C. 32902 requires that
standards apply to the average fuel economy levels achieved by each
manufacturer's fleet of vehicles produced for sale in the United
States. The CAFE Model calculates the average fuel economy of each
manufacturer's fleet based on estimated production volumes and
characteristics, including fuel economy levels of distinct vehicle
models that could be produced for sale in the United States.
Separate Standards for Passenger and Non-Passenger Automobiles: 49
U.S.C. 32902 requires DOT to set CAFE standards separately for
passenger and non-passenger automobiles. The CAFE Model accounts
separately for passenger and non-passenger automobiles, including
differentiated standards and compliance.
Attribute-Based Standards: 49 U.S.C. 32902 requires DOT to define
CAFE standards for passenger and non-passenger automobiles as
mathematical functions expressed in terms of one or more attributes
related to fuel economy. This means that, for a given manufacturer's
fleet of vehicles produced for sale in the United States in a given
regulatory class and model year, the applicable minimum CAFE
requirement (i.e., the numerical value of the requirement) is computed
based on the applicable mathematical function as well as 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: 49 U.S.C. 32902
requires DOT to set CAFE standards (separately for passenger and non-
passenger automobiles) at the maximum feasible levels in each model
year. The CAFE Model represents each model year explicitly and accounts
for the production relationships between model years. For example, a
new engine first applied to a given vehicle model/configuration in MY
2030 most likely will be retained in MY 2031 for that same vehicle
model 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 this reality, while still respecting applicable
statutory constraints.
Separate Compliance for Domestic and Imported Passenger Car Fleets:
49 U.S.C. 32904 requires EPA to determine average fuel economy
separately for each manufacturer's fleet of domestic passenger cars and
imported passenger

[[Page 56456]]

cars. A passenger car is considered to be domestic or imported based on
the definitions provided in 49 U.S.C. 32904. The CAFE Model accounts
explicitly for this requirement when simulating manufacturers'
potential responses to CAFE standards.
Minimum CAFE Standards for Domestic Passenger Car Fleets: 49 U.S.C.
32902 requires that domestic passenger car fleets also meet a minimum
CAFE standard, which is calculated as 92 percent of the average fuel
economy projected by the Secretary for the combined passenger car fleet
manufactured for sale in the United States by all manufacturers in the
model year. This projection is published at the time the standard is
promulgated. The CAFE Model accounts explicitly for this requirement.
Statutory Basis for Stringency: 49 U.S.C. 32902 requires DOT to set
CAFE standards for passenger and non-passenger automobiles at the
maximum feasible levels, considering technological feasibility,
economic practicability, the need of the U.S. to conserve energy, and
the impact of other motor vehicle standards of the Government on fuel
economy. The analysis and balancing of these factors necessarily
changes in light of current and projected economic and market
conditions. Accordingly, NHTSA has continued to expand and refine its
qualitative and quantitative analysis to account for these statutory
factors in light of such conditions. For example, the simulations of
technology effectiveness reflect the agency's judgment that it would
not be economically practicable, appropriate, or cost effective for a
manufacturer to ``split'' an engine shared among many vehicle models/
configurations into myriad versions each optimized to a single vehicle
model/configuration.
Civil Penalties for Noncompliance: 49 U.S.C. 32912 (and
implementing regulations) prescribe a rate (in dollars per tenth of a
mile per gallon (mpg)) at which the Secretary is to levy civil
penalties if a manufacturer fails to comply with a CAFE standard for a
given fleet in a given model year. When civil penalties are applicable
(i.e., when they are not set by statute to a value of $0, as they have
been at the time of this analysis of the proposed rule), the CAFE Model
will calculate civil penalties for CAFE shortfalls (if directed to do
so by the user). However, as stated, civil penalty values are currently
set by statute to a value of $0; therefore, the CAFE Model's
calculations will always result in zero civil penalties.
Dual-Fueled and Dedicated Alternative Fuel Vehicles: For purposes
of calculating CAFE standards used to determine passenger and non-
passenger automobile fleet compliance, 49 U.S.C. 32905 and 32906
specify methods for calculating the fuel economy levels of vehicles
operating on alternatives to gasoline or diesel fuels. The CAFE Model
can account for these requirements explicitly for each relevant vehicle
model. However, 49 U.S.C. 32902 also prohibits consideration of the
fuel economy of dedicated alternative fuel vehicle (AFV) models (or the
non-gasoline or non-diesel calculated fuel economy of dual-fueled AFVs)
when NHTSA determines what levels of passenger and non-passenger
automobile CAFE standards are maximum feasible. Therefore, the CAFE
Model is run in a manner that excludes dedicated AFV technologies and
limits the consideration of a dual-fueled AFV's fuel economy to only
its gasoline or diesel operation. NHTSA operates the Model with this
limitation when performing the analysis that is used to inform the
setting of standards. The CAFE Model can also be run without this
analytical constraint, and the agency does so in the NEPA analysis
described below.
Creation and Use of Compliance Credits: 49 U.S.C. 32903 provides
that manufacturers may earn CAFE ``credits'' by achieving an average
fuel economy level beyond that required of a given fleet in a given
model year 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'' a
maximum of five model years, ``carried back'' a minimum of three model
years, transferred between regulated classes, and traded between
manufacturers. However, credit use is also subject to specific limits:
the statute caps the amount of credit that can be transferred between a
manufacturer's fleets and prohibits manufacturers from applying traded
or transferred credits to offset a failure to achieve the minimum
standard for domestic passenger automobiles. The CAFE Model has the
capability to simulate manufacturers' potential use of credits carried
forward from prior model years or transferred from other fleets; \45\
however, this capability is not used in the standard-setting analysis
because 49 U.S.C. 32902 prohibits consideration of manufacturers'
potential application of CAFE compliance credits when setting maximum
feasible CAFE standards for passenger and non-passenger automobiles.
---------------------------------------------------------------------------

\45\ Note that the CAFE Model does not simulate the potential
for manufacturers to carry CAFE credits back (i.e., borrow) from
future model years or acquire and use CAFE compliance credits from
other manufacturers. NHTSA believes that there is significant
uncertainty in 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 1 year may
``coast'' through several subsequent years relying on that prior
improvement rather than continuing to make technology improvements
year after year, it is harder to assume with confidence that
manufacturers will rely on future technology investments to offset
prior-year shortfalls, or whether and how manufacturers will trade
credits with market competitors rather than make their own
technology investments.
---------------------------------------------------------------------------

National Environmental Policy Act (NEPA): The Draft SEIS
accompanying this proposed rule documents changes in fuel use and
emissions as estimated using the CAFE Model and also documents
corresponding estimates--based on the application of other models
documented in the Draft SEIS--of environmental impacts of the
regulatory alternatives under consideration.
3. What updated capabilities and assumptions does the current Model
reflect as compared to the version used in the analysis of the 2024
final rule?
DOT has continued its ongoing effort to refine and expand the
capabilities of the CAFE Model for use in analyzing regulatory
alternatives as considered in this proposal. Any analysis of regulatory
actions that will be implemented several years in the future, and whose
benefits and costs accrue over decades, requires many assumptions. Over
such time horizons, many, perhaps even most, of the relevant
assumptions in such an analysis are inevitably uncertain. To help
address this, NHTSA updates the assumptions used in each successive
CAFE analysis to reflect the current state of the world more accurately
and to apply the best current estimates of future conditions.
Accordingly, since the 2024 final rule, DOT has made the following
changes to the CAFE Model and its inputs:
<bullet> Updating the Market Data Input File to reflect the change
in analysis fleet from MYs 2022-2024;
<bullet> Updating algorithms and settings to remove statutorily
prohibited inputs from the standard-setting analysis and to select
between different types of analyses (i.e., constrained and
unconstrained);
<bullet> Updating the base dollar year from 2021$ to 2024$;
<bullet> Updating the capability to exclude plug-in hybrid electric
vehicle (PHEV) electricity usage when PHEV fuel economy operation is in
gasoline-only mode for standard setting;

[[Page 56457]]

<bullet> Updating the modeling capability to allow for vehicle
reclassification;
<bullet> Updating the Market Data Input File to include vehicle
reclassification;
<bullet> Updating the Model to use a bracketed costing approach to
determine prices for the five levels of mass reduction (MR);
<bullet> Updating the Scenarios Input File to remove AC and OC
FCIVs;
<bullet> Updating the Market Data Input File to include advanced
truck credits for MY 2024 vehicles, noting that those credits sunset
after MY 2024 and are therefore only applicable to that one year;
<bullet> Updating the Parameters Input File to set the social cost
of carbon at zero;
<bullet> Updating the Parameters Input File for changes in other
economic variables;
<bullet> Updating the Scenarios Input File with an adjusted tax
credit phase-out timeframe;
<bullet> Updating the Scenarios Input File to set civil penalties
to zero;
<bullet> Updating selected economic assumptions:
[cir] Rebound elasticity;
[cir] Payback period;
[cir] Value of travel time per vehicle; and
[cir] Numerous other updates based on the 2025 AEO; and
<bullet> Updating emission rates based on EPA's ``MOVES5'' model.
These and other updated analytical inputs are discussed in the
remainder of this section and in detail in the Draft TSD.

B. What is NHTSA analyzing?

NHTSA is analyzing the effects of different potential CAFE
standards on industry, consumers, and society at large. These different
potential standards are described as ``regulatory alternatives,'' and,
amongst the regulatory alternatives, NHTSA identifies which ones the
agency is proposing to select. 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.\46\ Thus, the
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.
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\46\ 49 U.S.C. 32902(a)(3)(A).
---------------------------------------------------------------------------

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 an average fuel economy standard for each year that is unique
to each of its regulatory fleets (i.e., passenger automobiles and non-
passenger automobiles, consistent with 49 U.S.C. 32902(b)), based on
the footprint and production volumes of the vehicle models produced by
that manufacturer. The functions are negatively sloped, so that larger
vehicles (i.e., vehicles with larger footprints) will generally be
subject to lower mpg targets than smaller vehicles. This is because
smaller vehicles are typically more capable of achieving higher levels
of fuel economy, because they tend not to require as much energy to
propel the mass necessary to perform their driving task. Although a
manufacturer's fleet average standard could be estimated throughout the
model year based on the projected production volume of its vehicle
fleet (and is estimated as part of EPA's certification process), the
standards with which the manufacturer must comply are determined by its
final model year production figures. A manufacturer's calculation of
its fleet average standards, as well as its fleets' average performance
at the end of the model year, will thus be based on the production-
weighted average target and performance of each model in its fleet.\47\
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\47\ 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.
---------------------------------------------------------------------------

For passenger cars, consistent with prior rulemakings, NHTSA is
defining fuel economy targets as shown in Equation II-1.
Equation II-1: Passenger Car Fuel Economy Footprint Target Curve
[GRAPHIC] [TIFF OMITTED] TP05DE25.016

Where:

TARGETFE 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 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 light trucks, also consistent with prior rulemakings, NHTSA is
defining fuel economy targets as shown in Equation II-2.
Equation II-2: Light Truck Fuel Economy Footprint Target Curve
[GRAPHIC] [TIFF OMITTED] TP05DE25.017

Where:

TARGETFE is the fuel economy target (in mpg) applicable to a
specific vehicle model type with a unique footprint combination, and
a, b, c, and d are as for passenger cars, but take values specific
to light trucks.

Though the general model of the target function equation is the
same for passenger cars and light trucks, and the

[[Page 56458]]

same for each model year, the parameters of the function equation
differ for cars and trucks.
The parameters defining the general curve shapes have remained the
same since the 2012 final rule. NHTSA periodically reconsiders whether
to update the mathematical functions but in each prior instance
concluded that the existing curves continued to represent the
relationship between footprint and fuel economy reasonably. Consistent
with the agency's past practice of reviewing the mathematical functions
prior to each rulemaking, NHTSA re-examined the curve shapes for this
proposal.
More specifically, NHTSA performed descriptive statistical analyses
using manufacturer-reported data for the MY 2022 and MY 2024 fleets.
NHTSA used the MY 2022 fleet for analysis of curve shapes relevant to
the MYs 2022-2027 standards and used the MY 2024 ``reclassified'' fleet
for analysis of curve shapes relevant to the MYs 2028-2031 standards.
As discussed in more detail in Draft TSD Chapter 1, the proposed
updates to NHTSA's vehicle classification regulations beginning in MY
2028 have material impacts on the relationship between fuel economy and
footprint for each regulatory class, as expressed by the standards-
defining functions.
To estimate the relationship between fuel economy and footprint and
to maintain general consistency with analyses of past rules (and the
conformance to statutory prohibitions), the agency excluded all diesel
engine vehicles and all plug-in electric vehicles, which include plug-
in hybrid electric vehicles, battery electric vehicles (BEV), and fuel
cell electric vehicles (FCEV), and applied weighting and other
adjustments to the fuel consumption and footprint data. Table II-1
summarizes the methodological approaches that NHTSA considered for
reassessing the footprint curves.

[[Page 56459]]

[GRAPHIC] [TIFF OMITTED] TP05DE25.018

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\48\ The maximum technology fleet was simulated with the CAFE
Model, assuming a MY 2024 fleet and maximum allowable technology
application.

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[[Page 56460]]

NHTSA believes that the ordinary least-squares (OLS) regression
framework continues to be an appropriate method for estimating the
relationship of footprint to fuel economy. While the agency relied on
the minimum absolute deviation (MAD) regression framework in the 2010
final rule to address the effects of ``outlier'' vehicles in the fleet,
the agency addresses outlier vehicles in this reconsideration through
technology-based exclusions (i.e., by excluding diesels, PHEVs, BEVs,
and FCEVs, as mentioned above) and data normalization through the
application of controls, including curb weight (CW) to footprint,
horsepower (HP) to CW, and both together, depending on the regulatory
fleet under consideration, as it has in each of its CAFE rulemaking
actions since 2012. The curves also reflect updated fleet data to reset
the ``cutpoints,'' or the places at the lowermost and uppermost bounds
of vehicle footprint distributions where the standards remain flat
(i.e., the mpg target does not continue to increase as footprint
decreases, and vice versa). The resulting footprint curves are shown in
Section III's discussion of the regulatory alternatives.
As discussed in Draft TSD Chapter 1, NHTSA considers a variety of
technical and policy issues when determining the footprint curve shape
in any CAFE rulemaking action. For example, standards that decrease
sharply with increasing footprint could create incentives for
manufacturers to upsize vehicles, since small changes in vehicle
footprint would result in a significant change in the vehicle's fuel
economy target; conversely, flatter standards could create a
significant amount of additional technology burden for larger vehicles
to meet fuel economy targets like those of smaller vehicles. That said,
NHTSA performed an analysis for the 2024 final rule showing that
vehicle footprints, within vehicle types, have been stable on a sales-
weighted basis since MY 2012.\49\ The biggest increase to within-type
footprints was for the sedan/wagon category, which increased by 3.4
percent (or about 2 square feet) from 2012 (for reference, a 1.5-square
foot increase would equate to about a 2-inch increase in the track
width of a MY 2022 Toyota Corolla). NHTSA concluded that the disconnect
between vehicle class-level characteristics and what was being
perceived at the fleet level (i.e., vehicles seemingly getting larger)
was traceable to the increase in the share of fleet vehicles classified
as light trucks relative to the share of passenger cars. Available data
indicate that the use of footprint as an attribute did not appear to
lead to manufacturers significantly altering the size of their vehicles
within vehicle classes and that the major shift in fleet share was not
a result of the shape of the footprint curves.
---------------------------------------------------------------------------

\49\ NHTSA, Technical Support Document: Corporate Average Fuel
Economy Standards for Passenger Cars and Light Trucks for Model
Years 2027 and Beyond and Fuel Efficiency Standards for Heavy-Duty
Pickup Trucks and Vans for Model Years 2030 and Beyond, NHTSA:
Washington, DC, pp. 1-20 (2024).
---------------------------------------------------------------------------

The footprint curve updates for this proposal are intended to
ensure that the agency appropriately captures the footprint-to-fuel
economy relationship using the most current data. As discussed in Draft
TSD Chapter 1, the observed relationship between footprint and fuel
economy for both the passenger car and light truck fleets is on average
``flatter'' (i.e., on average, the fuel economy did not vary as much
across footprint levels) than the MY 2008 fleet used to create the
footprint curves for the past several rules. While the technical
concerns and policy trade-offs associated with the curve shapes still
hold to some extent, NHTSA believes it is more likely, as shown from
the agency's 2024 analysis and the updated analysis presented in
Section VI, that any shift in vehicle attributes present in the market
over time has not been due to the shapes of curves or the use of
footprint as the relevant attribute. NHTSA seeks comments on this
belief, as well as the updated footprint curve shape analysis,
discussed in more detail in Draft TSD Chapter 1.
Finally, the required CAFE level applicable to a passenger car
(either domestic or import) or light truck fleet in a given model year
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.
Equation II-3: Calculation for Required CAFE Level
[GRAPHIC] [TIFF OMITTED] TP05DE25.019

Where:

CAFErequired is the CAFE level the fleet is required to achieve,
i refers to specific vehicle model configurations in the fleet,
PRODUCTIONi is the number of model configuration i produced for sale
in the United States, and
TARGETFE, i is the fuel economy target (as defined above) for model
configuration i.

Additional details about the specific values defining the
mathematical functions and visual representations of the fuel economy
target curves are presented in Section III, below.

C. What inputs does the compliance analysis require?

The first step in the agency's analysis of the effects of different
levels of fuel economy standards is the compliance simulation. As used
throughout this rulemaking, ``compliance simulation'' means the
simulation of how manufacturers could comply with different levels of
CAFE standards by adding fuel economy-improving technology to an
existing fleet of vehicles, using the CAFE Model. The CAFE Model uses a
variety of data, including data provided by manufacturers, to simulate
final fleet sales and performance.\50\
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\50\ When NHTSA uses the phase ``the Model'' throughout this
section, NHTSA is referring to the CAFE Model. Any other model is
specifically named.
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At the most basic level, a model is a set of equations,
algorithms,\51\ or other calculations used to make predictions about a
complex system. A model may consider various inputs, such as technology
costs or other relevant factors, and use those inputs to generate
output predictions. NHTSA used two separate approaches for which it is
proposing to amend the existing CAFE standards, one for MYs 2022-2026
and one for MYs 2027-2031. The sections

[[Page 56461]]

below discuss the inputs each of those analyses used.
---------------------------------------------------------------------------

\51\ See Merriam-Webster ``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.
---------------------------------------------------------------------------

1. What inputs does the analysis require for 2022-2026?
For the MYs 2022-2026 analysis, NHTSA has performed two exercises:
first, it has re-evaluated the statistical model used to determine the
shape (i.e., slope, intercept, and cutpoints) of the target functions
for passenger cars and light trucks. Based on its preferred choice of
shape, NHTSA has evaluated the compliance position of manufacturers in
MYs 2022-2024 under alternative stringencies and compared results to
the manufacturers' achieved average fuel economy in these years. For
both exercises, NHTSA relies on compliance data from manufacturer mid-
year compliance reports. For its curve fitting analysis, NHTSA uses
vehicle model level data on vehicle attributes, including footprint,
HP, CW, and 2-cycle fuel economy. NHTSA also uses mid-year estimates of
model sales from manufacturer compliance data for this exercise.
NHTSA's curve fitting analysis is described in greater detail in Draft
TSD Chapter 1. For NHTSA's comparison of achieved fuel economy and
proposed standards levels, the agency uses compliance data at the model
level for vehicle footprint, 2-cycle fuel economy, and mid-year
estimates of vehicle sales.
For MYs 2022-2024, NHTSA uses each proposed standard to calculate
vehicle model target function values for each vehicle model in the
standard-setting fleet.\52\ Consistent with past rulemakings, the
agency uses piecewise linear functions of vehicle footprint, which map
to a target value of fuel consumption rate in gallons-per-mile.\53\
NHTSA determines a vehicle's target fuel economy level in miles per
gallon for a given set of standards, and then takes the reciprocal of
this value. NHTSA determines the CAFE standards for each manufacturer
at the regulatory class level under each alternative by taking the
sales-weighted harmonic mean of the relevant models produced by the
manufacturer in each regulatory class in each model year. The agency
repeats these calculations for each model year under consideration to
determine a single value for each regulatory class in which the
manufacturer produced vehicles.
---------------------------------------------------------------------------

\52\ Per 49 U.S.C. 32902(h), dedicated alternative fueled
vehicles, such as EVs, are excluded from this analysis. For duel-
fueled vehicles, the analysis uses a fuel economy value for the
vehicles operating only on gasoline or diesel fuel. Id.
\53\ See Chapter 1.2 of the Draft TSD discussing footprint
functions.
---------------------------------------------------------------------------

NHTSA also computes the MDPCS for each model year by taking the
sales-weighted harmonic mean of the model-level target function values
for all vehicles in the passenger car fleet in that model year and
multiplying the value by 92 percent.\54\
---------------------------------------------------------------------------

\54\ 49 U.S.C. 32902(b)(4).
---------------------------------------------------------------------------

NHTSA determines each manufacturer's achieved fuel economy in miles
per gallon separately for each regulatory class using the sales-
weighted average of the 2-cycle fuel economy values of all models
produced by the manufacturer in the relevant regulatory class. NHTSA
then compares this achieved value to the corresponding manufacturer
regulatory class standard in each model year to determine whether the
fleet of vehicles to which it corresponds would comply with each
proposed standard in that model year. To determine the total number of
vehicles out of compliance, NHTSA determines compliance for each
manufacturer's regulatory fleet in each model year under each proposed
alternative, and if a fleet is determined to be out of compliance, the
agency sums the total number of vehicles sold in the non-compliant
fleet.
As discussed in more detail in Section IV, NHTSA analyzes the
difference between each manufacturer's fleet CAFE compliance value and
the proposed standard. NHTSA has considered using the CAFE Model to
simulate behavior for the MYs 2022-2026 compliance period to estimate
how manufacturers and consumers could have responded to different CAFE
standards. However, for MYs 2022-2025, production is already closed or
is in process, and MY 2026 production plans likely are solidified and
underway by the time of this NPRM's publishing. This type of analysis
overestimates the ability of manufacturers to optimize in response to
the proposed standards for these years and likely leads to different
results from the actual outcomes. Thus, simulating a response and any
monetized costs or benefits deriving from that do not represent real
economic effects from the proposed change in policy.
2. What inputs does the compliance analysis require for 2027-2031?
For the MYs 2027-2031 amendment analysis, NHTSA used the CAFE Model
to simulate manufacturers' potential responses to new CAFE standards
and to estimate the various impacts of those responses on manufacturers
and society. The Model considers various inputs, such as technology
effectiveness data, technology costs, and other relevant factors, and
uses those inputs to generate output predictions.
NHTSA attempts to ensure that the technology inputs and assumptions
that go into the CAFE Model are based on sound science and reliable
data and that NHTSA's 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 the agency generates
the technology inputs and assumptions that the CAFE Model uses for the
compliance simulation.\55\ The Draft TSD, CAFE Model Documentation,
CAFE Analysis Autonomie Documentation,\56\ and other technical reports
supporting this proposed rule discuss the agency's technology inputs
and assumptions in more detail.
---------------------------------------------------------------------------

\55\ As explained throughout this section, a NHTSA input is a
specific number or datapoint used by the Model, and NHTSA's
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 NHTSA's modeling.
\56\ The Argonne 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.''
---------------------------------------------------------------------------

NHTSA incorporates technology inputs and assumptions either
directly in the CAFE Model or in the CAFE Model's various input files.
The compliance simulation algorithm is at the heart of the CAFE Model's
decisions about how to apply technologies to a manufacturer's vehicles
to project how the manufacturer could meet CAFE standards. The
compliance simulation algorithm consists of several equations that
direct the Model to apply fuel economy-improving technologies to
vehicles in a way that simulates 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 manufacturers' vehicles now and
what technology could be applied to their vehicles in the future.
Embedded in the CAFE Model is the universe of technology options that
the Model can consider and rules about the order in which it can
consider those options, as well as estimates of how effective fuel
economy-improving technology is on different types of vehicles (e.g.,
sedan or pickup truck).

[[Page 56462]]

Technology inputs and assumptions are also located in all four of
the CAFE Model Input Files. The Market Data Input File is a spreadsheet
file that characterizes the fleet of vehicles used as the starting
point for the CAFE Model. There is one row describing each vehicle
model and model configuration manufactured for the United States market
in a model year (or years) and input and assumption data that links
those vehicles to technology and economic, environmental, and safety
inputs and assumptions. The Technologies Input File identifies 71
technologies the agency uses in the analysis, along with information
used to inform the compliance simulation and effects estimates,
including phase-in caps to identify when and how widely each technology
can be applied to specific types of vehicles, most of the technology
costs (hybrid vehicle battery costs are provided in a separate file),
and the fuel share percentage for PHEV to capture the charge sustaining
operation. The Scenarios Input File provides the coefficient values
defining the standards for each regulatory alternative \57\ and other
relevant information applicable to modeling each regulatory
scenario.\58\ Finally, the Parameters Input File contains mainly
economic and environmental data.\59\
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\57\ The coefficient values are defined in PRIA Chapter 3 for
the CAFE standard.
\58\ This file also includes information about the amount of
fuel consumption improvement values a manufacturer may generate for
compliance purposes for model years in which a manufacturer may
generate them.
\59\ See CAFE Model Documentation for a detailed discussion of
what inputs are held in each of the input data files.
---------------------------------------------------------------------------

NHTSA generates these technology inputs and assumptions in several
ways, including using data submitted by vehicle manufacturers pursuant
to their CAFE reporting obligations; 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 Argonne; and research,
testing, and modeling with independent organizations, like IAV GmbH
Ingenieurgesellschaft Auto und Verkehr (IAV), Southwest Research
Institute (SwRI), National Academy of Sciences (NAS), and FEV North
America. NHTSA also considers the work done to develop inputs and
assumptions for prior rules to the extent it is still relevant and
applicable; feedback from stakeholders on prior rules and from meetings
conducted before the commencement of this proposed rule; and NHTSA's
own engineering judgment. NHTSA uses the term ``engineering judgment''
throughout this rulemaking to refer to decisions made by a team of
NHTSA 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, the agency uses engineering judgment to assess how best to
represent vehicle manufacturers' potential responses to different
levels of CAFE standards within the boundaries of the agency's modeling
tools, as ``a model is meant to simplify reality in order to make it
tractable.'' \60\ In other words, NHTSA uses engineering judgment to
concentrate potential technology inputs and assumptions from millions
of discrete data points from hundreds of sources into four external
input files and three datasets integrated into the CAFE Model. How the
CAFE Model decides to apply technology (i.e., the compliance simulation
algorithm), has been developed using engineering judgment, considering
factors that manufacturers consider when they add technology to
vehicles in the real world. The specific technology inputs and
assumptions are discussed in more detail in the following sections and
in the associated technical documentation.
---------------------------------------------------------------------------

\60\ Chem. Mfrs. Ass'n v. EPA, 28 F.3d 1259, 1264-65 (D.C. Cir.
1994) (citing Milton Friedman, in Friedman, M., The Methodology of
Positive Economics, in Essays in Positive Economics 3, University of
Chicago Press: Chicago, IL, pp. 14-15 (1953), available at: <a href="https://www.wiwiss.fu-berlin.de/fachbereich/bwl/pruefungs-steuerlehre/loeffler/Lehre/bachelor/investition/Friedman_the_methology_of_positive_economics.pdf">https://www.wiwiss.fu-berlin.de/fachbereich/bwl/pruefungs-steuerlehre/loeffler/Lehre/bachelor/investition/Friedman_the_methology_of_positive_economics.pdf</a> (accessed: Sept.
10, 2025)).
---------------------------------------------------------------------------

a. Technology Options and Pathways
NHTSA begins 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 U.S. market.\61\ These are technologies
that the agency believes are representative of what vehicle
manufacturers currently use on their vehicles, and that vehicle
manufacturers could use on their vehicles in the timeframe for the
proposed standards (MYs 2027-2031). The technology options include
engines, transmissions, hybridization, and road load technologies,
which include MR, aerodynamic improvement (aerodynamic drag technology
(AERO)), and tire rolling resistance (ROLL) reduction technologies.\62\
---------------------------------------------------------------------------

\61\ 40 CFR 86.1806-17, Onboard diagnostics; 40 CFR 86.1818-12,
Greenhouse gas emission standards for light-duty vehicles, light-
duty trucks, and medium-duty passenger vehicles; Commission
Directive 2001/116/EC--European Union emission regulations for new
LDVs--including passenger cars and light commercial vehicles (LCV).
\62\ Draft TSD Chapter 3 contains discussion on the technology
tree and technologies available.
---------------------------------------------------------------------------

Adding a technology to the range of options that the CAFE Model can
consider requires several data elements, including a broadly applicable
technology definition, estimates of how effective that technology is at
improving fuel economy on different vehicle types (e.g., sedan or
pickup truck), and the cost to apply that technology to each. Each
technology the agency selects is designed to be representative of a
wide range of specific technology applications used in the automotive
industry. Some manufacturers' systems may perform better or worse than
NHTSA's modeled systems, and some may cost more or less than NHTSA's
modeled systems. However, selecting representative technology
definitions for the agency's analysis ensures the agency captures a
reasonable level of costs and benefits that would result from any
manufacturer applying the technology.
NHTSA has been refining the technology options it considers since
first developing the CAFE Model in 2002. In this context, ``refining''
means both adding and removing technology options depending on current
technology availability and projected future availability in the U.S.
market, while balancing a reasonable amount of modeling and analytical
complexity. In recent years, the agency has refined the internal
combustion engine (ICE) technology options, particularly the TURBO and
HCR pathways, to reflect better the diversity of engines in the current
fleet. Consistent with NHTSA's interpretation of EPCA/EISA, discussed
further in Section II.0 and V, the agency includes several hybrid
technologies to represent appropriately the diversity of current and
anticipated future technology options while ensuring NHTSA's analysis
remains consistent with statutory limitations prohibiting the
consideration of EVs in establishing standards and considering only the
gas or diesel operation of dual fueled automobiles.
The technology options do not include technologies NHTSA has
determined will not be available in the rulemaking timeframe. As with
past analyses, the agency does not include technologies unlikely to be
feasible in the rulemaking timeframe, engine technologies designed for
markets other than the United States market required to use unique
gasoline,\63\ or technologies

[[Page 56463]]

for which appropriate data are not available for the range of vehicles
that the agency models in the analysis (i.e., technologies that are
still in the research and development phase and not ready for mass-
market production). Each technology section below and Chapter 3 of the
Draft TSD discuss these modeling decisions in detail.
---------------------------------------------------------------------------

\63\ In general, most vehicles produced for sale in the United
States have been designed to use ``regular'' gasoline, or 87 octane.
See EIA, Gasoline Explained: What is octane?, Last revised: Nov. 17,
2022, 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: Sept. 10, 2025).
---------------------------------------------------------------------------

In this analysis, 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 NHTSA estimates the costs and
benefits for different levels of CAFE standards based on a simulation
of the technology manufacturers could apply in the rulemaking
timeframe, it is entirely possible and reasonable that manufacturers
may use different technology options to meet the agency's standards in
the real world and may even use technologies that NHTSA does not
include in the analysis. This is because NHTSA's standards do not
mandate the application of any particular technology. Rather, NHTSA's
standards are performance-based: manufacturers in the real world can
and do use a range of compliance solutions that include technology
application and encouraging sales shifts from one vehicle model or trim
level to another.\64\ The agency has determined that the 71 technology
options included in the analysis strike a reasonable balance between
representing the diversity of technology used by the entire industry
and simplifying reality to make modeling workable.\65\
---------------------------------------------------------------------------

\64\ Manufacturers could increase their production of one type
of vehicle with higher fuel economy, like the hybrid version of a
conventional vehicle model, to meet the standards. For example, Ford
has conventional and hybrid versions of its F-150 pickup truck, and
Toyota has conventional, hybrid, and plug-in hybrid versions of its
RAV4 sport utility vehicle.
\65\ For each technology option, the analysis includes distinct
technology cost and effectiveness values for 10 different types of
vehicles, resulting in nearly half a million different technology
effectiveness and cost data points.
---------------------------------------------------------------------------

Chapter 3 of the Draft TSD and Section II.0 below describe the
technologies that NHTSA uses for the analysis. Each technology has a
name that loosely corresponds to its real-world technology equivalent.
NHTSA abbreviates the name to a short signifier for the CAFE Model to
read. The agency organizes those technologies into groups based on
technology type: basic and advanced engines, transmissions,
hybridization, and road load technologies, which include MR,
aerodynamic improvement, and low rolling resistance tire technologies.
NHTSA then organizes the groups into pathways. The pathways
instruct the CAFE Model how and in what order to apply technology. In
other words, the pathways define mutually exclusive technologies (i.e.,
those 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. The respective technology chapters in the Draft TSD and
Section 4 of the CAFE Model Documentation include a visual of each
technology pathway. In general, the paths are tied to ease of
implementation of additional technology and how closely related the
technologies are.
As an example, NHTSA's ``Turbo Engine Path'' consists of five
different engine technologies that employ different levels of
turbocharging technology. A turbocharger is essentially a small turbine
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 cylinders. Having more
air in the engine's cylinders allows the engine to burn more fuel,
which then creates more power, without needing a physically larger
engine. In the agency's analysis, an engine that is turbocharged
``downsizes,'' or becomes smaller. Choosing to turbocharge an engine
allows a manufacturer to maintain similar levels of performance to a
larger, non-turbocharged engine with a smaller engine that uses less
fuel to do the same amount of work. Allowing basic engines to be
downsized and turbocharged instead of just turbocharged keeps the
vehicle's utility and performance constant so that NHTSA can measure
the costs and benefits of different levels of fuel economy
improvements, rather than the change in different vehicle attributes.
This concept of performance neutrality is discussed further, below.
The Model only allows forward movement along the technology
pathways, adding more advanced technology as the Model moves through
the technology tree. This ensures that a vehicle that uses a more
advanced technology cannot downgrade to a less advanced version of the
technology or ensures that a vehicle does not switch to technology that
is significantly technically different. This progressive order also
realistically represents how manufacturers often start with the lowest
and most cost-effective technologies and generally advance along
particular technology pathways. 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.\66\
Similarly, this vehicle with a TURBOD engine cannot adopt an advanced
cylinder deactivation on a dual-overhead camshaft engine (ADEACD)
engine.\67\ As an example of NHTSA's rationale for ordering
technologies on the technology tree, 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 likely would require a different engine block that
might not fit in the engine bay of the vehicle without a complete
redesign and different technical expertise requiring years of research
and development. This change, which would strand capital and impact
parts sharing, is why the advanced engine paths restrict most movement
between them. The concept of stranded capital is discussed further in
Section II.C.2.f.
---------------------------------------------------------------------------

\66\ TURBO0 is the baseline turbocharged engine and TURBOD is
TURBO0 with the addition of cylinder deactivation (DEAC). Chapter 3
of the Draft TSD provides more discussion on engine technologies.
\67\ ADEACD is a dual-overhead camshaft engine with advanced
cylinder deactivation. Chapter 3 of the Draft TSD provides more
discussion on engine technologies.
---------------------------------------------------------------------------

NHTSA also considers two categories of technology, for model years
in which the technology categories are applicable, that the agency
could not simulate as part of the CAFE Model's technology pathways.
``Off-cycle'' and AC efficiency are two types of technologies that
improve vehicle fuel economy but are not accounted for using 2-cycle
testing. To account for the benefits of these technologies, EPA has
allowed manufacturers to generate FCIVs when they add these
technologies, which are used to improve a manufacturers' certified fuel
economy. As an example, manufacturers can generate FCIVs for technology
like active seat ventilation and solar reflective surface coatings that
make the cabin of a vehicle more comfortable for the occupants without
using less efficient accessories like heat or AC. Instead of including
OC and AC efficiency technologies in the technology pathways, NHTSA
includes the improvement as a defined benefit that gets applied to a
manufacturer's entire fleet in applicable model years instead of to
individual vehicles. The defined benefit that each manufacturer
receives in the analysis for using OC and AC efficiency technology on
their vehicles is located in the Market Data

[[Page 56464]]

Input File. Chapter 3.7 of the Draft TSD provides more discussion on
how OC and AC efficiency technologies are developed and modeled.
Preamble Section VI contains discussion of this program's updates in
this rule.
To illustrate how NHTSA simulates technology application,
throughout this section NHTSA follows the hypothetical vehicle
mentioned above that begins the compliance simulation with a TURBOD
engine. The agency's 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, the agency
determines that it has technology that loosely fits within the
following technologies that the agency considers 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. NHTSA tracks the technologies on
each vehicle using a ``technology key,'' which is the string of
technology abbreviations for each vehicle. The vehicle technologies and
their abbreviations that the agency considers in this analysis are
shown in Draft TSD Chapter 2. The technology key for the Ravine Runner
F Series is ``TURBOD; AT10L2; SS12V; ROLL0; AERO5; MR3.''
b. Defining Manufacturers' Current Technology Positions in the Analysis
Fleet
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 the fleet of vehicle
models each manufacturer produced for sale in the United States for MY
2024. This provides the starting point from which the CAFE Model adds
fuel economy-improving technology. NHTSA calls this fleet the
``analysis fleet.'' The analysis 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.
The ``Vehicles'' tab contains a separate row for each vehicle
model. Vehicle models are vehicles that share the same fuel economy
value and vehicle footprint. This means that vehicle models with
different configurations that affect the vehicle's certification fuel
economy value are distinguished in separate rows in the Vehicles tab.
For example, the agency's Ravine Runner example vehicle comes in three
different configurations--the Ravine Runner FWD, Ravine Runner AWD, and
Ravine Runner F Series--which would result in three separate rows.
In each row, NHTSA also designates a vehicle's engine,
transmission, and platform codes.\68\ Vehicles that have the same
engine, transmission, or platform code are deemed to ``share'' that
component in the CAFE Model. Parts sharing helps manufacturers achieve
economies of scale, deploy capital efficiently, and make the most of
shared research and development expenses, while still presenting a wide
array of consumer choices to the market. The CAFE Model has been
developed to treat vehicles, platforms, engines, and transmissions as
separate entities, which allows the modeling system to evaluate
technology improvements on multiple vehicles that may share a common
component concurrently. Sharing also enables realistic propagation, or
``inheriting,'' of previously applied technologies from an upgraded
component down to the vehicle ``users'' of that component that have not
yet realized the benefits of the upgrade. Section 2.1 and Section 4.4
of the CAFE Model Documentation contain additional information about
the initial state of the fleet, as well as technology evaluation and
inheriting within the CAFE Model.
---------------------------------------------------------------------------

\68\ Each numeric engine, transmission, or platform code
designates important information about that vehicle's technology;
for example, a vehicle's 6-digit transmission code includes
information about the manufacturer, the vehicle's drive
configuration (e.g., front-wheel drive, all-wheel drive, 4WD, or
rear-wheel drive), transmission type, number of gears (i.e., a 6-
speed transmission has 6 gears), and the transmission variant.
---------------------------------------------------------------------------

Figure II-1 below shows how NHTSA separates the different
configurations of the hypothetical Ravine Runner. NHTSA sees by the
Platform Codes that these Ravine Runners all share the same platform,
but only the Ravine Runner FWD and Ravine Runner AWD share an engine.
Even so, all three certification fuel economy values are different,
which is common for vehicles that differ in drive type (drive type
meaning whether the vehicle has AWD, 4-wheel drive (4WD), front-wheel
drive (FWD), or rear-wheel drive (RWD). While it is simpler to
aggregate vehicles by model, ensuring that NHTSA captures model
variants with different fuel economy values improves the accuracy of
the analysis and the potential that estimated costs and benefits from
different levels of standards are appropriate. NHTSA includes
information about other vehicle technologies at the farthest right side
of the Vehicles tab, and in the ``Engines,'' ``Transmissions,'' and
``Platforms'' worksheets, as discussed further below.

[[Page 56465]]

[GRAPHIC] [TIFF OMITTED] TP05DE25.020

Moving from left to right on the Vehicles tab, after including
general information about vehicles and their compliance fuel economy
value, NHTSA includes sales and manufacturer's suggested retail price
(MSRP) data, regulatory class information (e.g., domestic passenger
automobile, import passenger automobile, or non-passenger automobile),
and information about how NHTSA classifies vehicles for the
effectiveness and safety analyses. Each of these data points is
important to different parts of the compliance and effects analysis, so
that the CAFE Model can accurately average the technologies required
across a manufacturer's regulatory fleet to meet its CAFE standard or
estimate the impacts of higher fuel economy standards on vehicle sales.
---------------------------------------------------------------------------

\69\ Note that not all data columns are shown in this example
for brevity.
---------------------------------------------------------------------------

Next, NHTSA includes vehicle information necessary for applying
different types of technology; for example, designating a vehicle's
body style allows NHTSA to apply aerodynamic technology appropriately,
and designating starting CW values allows the agency to apply MR
technology more accurately. Importantly, this section also includes
vehicle footprint data, which is needed because NHTSA sets footprint-
based standards.
NHTSA also sets product design cycles, which are the years in which
the CAFE Model can apply technologies to vehicles. Manufacturers often
introduce fuel-saving technologies at a ``redesign'' of their product
or adopt technologies at ``refreshes'' in between product redesigns. As
an example, the redesigned third generation Chevrolet Silverado was
released for MY 2019 and featured a new platform, updated drivetrain,
increased towing capacity, reduced weight, improved safety, and
expanded trim levels, to name a few improvements. For MY 2022, the
Chevrolet Silverado received a refresh (or facelift as it is commonly
called), with an updated interior, infotainment, and front-end
appearance.\70\ Setting these product design cycles provides realistic
durations of product stability and ensures that the CAFE Model
simulates the opportunities manufacturers have to apply technologies in
line with refresh and redesign cycles.
---------------------------------------------------------------------------

\70\ GM Authority, 2022 Chevy Silverado, Last revised: 2022,
available at: <a href="https://gmauthority.com/blog/gm/chevrolet/silverado/2022-chevrolet-silverado/">https://gmauthority.com/blog/gm/chevrolet/silverado/2022-chevrolet-silverado/</a> (accessed: Sept. 10, 2025).
---------------------------------------------------------------------------

During modeling, all improvements from technology application are
initially realized on a component and then propagated (or inherited)
down to the vehicles that share that component. As such, new component-
level technologies are initially evaluated and applied to a platform,
engine, or transmission during their respective redesign or refresh
years. Any vehicles that share the same redesign or refresh schedule as
the component apply these technology improvements during the same model
year. The rest of the vehicles inherit technologies from the component
during their refresh or redesign year (for engine- and transmission-
level technologies) or during a redesign year only (for platform-level
technologies). Section 4.4 of the CAFE Model Documentation contains
additional information about technology evaluation and inheriting
within the CAFE Model.
The CAFE Model also considers the potential safety effect of MR
technologies and crash compatibility of

[[Page 56466]]

different vehicle types. MR technologies lower the vehicle's CW, which
may change crash compatibility and safety, depending on the type of
vehicle. NHTSA assigns each vehicle in the Market Data Input File a
``safety class'' that best aligns with the CAFE Model's analysis of
vehicle mass, size, and safety, and include the vehicle's starting
CW.71 72
---------------------------------------------------------------------------

\71\ Vehicle curb weight is the weight of the vehicle with all
fluids and components but without the drivers, passengers, or cargo.
\72\ NPRM preamble Section II.H.1 and Draft TSD Chapter 7.3
provides more in depth discussion on the impacts of mass reduction
on safety.
---------------------------------------------------------------------------

The CAFE Model includes procedures to consider the direct labor
impacts of manufacturers' responses to CAFE regulations, considering
the assembly location of vehicles, engines, and transmissions; the
percent U.S. content (based on the percent U.S. and Canadian content,
as reported by manufacturers to NHTSA); and the dealership employment
associated with new vehicle sales. Estimated labor information, by
vehicle, is included in the Market Data Input File. Sales volumes
included in and adapted from the market data also influence total
estimated direct labor projected in the analysis. Chapter 6.2.5 of the
Draft TSD contains additional discussion of the labor utilization
analysis.
NHTSA then assigns the technologies to individual vehicles. This
initial linkage of vehicle technologies is how the CAFE Model knows how
to advance a vehicle down each technology pathway. Assigning CAFE Model
technologies to individual vehicles is dependent on the mix of
information the agency has about any particular vehicle and trends
about how a manufacturer has added technology to that vehicle in the
past, equations and models that translate real-world technologies to
their counterparts in NHTSA's analysis (e.g., drag coefficients and
body styles can be used to determine a vehicle's AERO level), and the
agency's engineering judgment.
As discussed further below, the agency uses information directly
from manufacturers to populate some fields in the Market Data Input
File, like vehicle HP ratings and vehicle weight. NHTSA also uses
manufacturer data as an input to various other models that calculate
how a manufacturer's real-world technology equates to a technology
level in the agency's model. For example, the agency calculates initial
MR, aerodynamic drag reduction, and ROLL levels by looking at industry-
wide trends and calculating--through models or equations--levels of
improvement for each technology. The models and algorithms that the
agency uses are described further below and in detail in Chapter 3 of
the Draft TSD. Other fields, like vehicle refresh and redesign years,
are projected forward based on historic trends.
Recall the Ravine Runner F Series example with the technology key
``TURBOD; AT10L2, SS12V; ROLL0; AERO5; MR3.'' For this example, Generic
Motor's publicly available spec sheet for the Ravine Runner F Series
says that it uses Generic Motor's Turbo V6 engine with proprietary
Adaptive Cylinder Management Engine (ACME) technology. Generic Motor's
ACME improves fuel economy and lowers emissions by operating the engine
using only three of the engine's cylinders in most conditions and using
all six engine cylinders when more power is required. Based on this
information, NHTSA would conclude that this engine is turbocharged and
uses a form of cylinder deactivation, meaning it would be appropriately
classified as TURBOD. Generic Motors uses this engine in several of
their vehicles, and the specifications of the engine can be found in
the Engines Tab of the Market Data Input File, under a six-digit engine
code.\73\
---------------------------------------------------------------------------

\73\ Like the transmission codes discussed above, the engine
codes include information identifying the manufacturer, engine
displacement (how many liters the engine is), whether the engine is
naturally aspirated or force-inducted (turbocharged), and other
unique engine attributes.
---------------------------------------------------------------------------

This is a relatively easy engine to assign based on publicly
available specification sheets, but some technologies are more
difficult to assign. Manufacturers use different trade names or terms
for different technology, and the way that the agency assigns the
technology in the agency's analysis may not necessarily line up with
how a manufacturer describes the technology. NHTSA must use some
engineering judgment to determine how discrete technologies in the
market best fit the technology options that the agency considers in the
agency's analysis. The agency discusses factors used to assign each
vehicle technology in the individual technology subsections below.
In addition to the Vehicles Tab that houses the analysis fleet, the
Market Data Input File includes information that affects how the CAFE
Model might apply technology to vehicles in the compliance simulation.
Specifically, the Market Data Input File's ``Manufacturers'' tab
includes a list of vehicle manufacturers considered in the analysis and
several pieces of information about their economic and compliance
behaviors. For this analysis, the compliance simulation assumes that
manufacturers continue to apply technology to the extent practicable to
reach compliance. This modeling change is made by indicating in the
``Manufacturers'' tab that all manufacturers will comply with NHTSA's
standards and is consistent with the recent amendment to EPCA that set
civil penalties (i.e., fines) to $0 effective for MY 2022 vehicles and
beyond.\74\ The CAFE Model's compliance simulation algorithm is
discussed in Section II.C.2.f.
---------------------------------------------------------------------------

\74\ See Public Law 119-21, 139 Stat. 72, sec. 40006 (July 4,
2025), <a href="https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf">https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf</a>.
---------------------------------------------------------------------------

Finally, NHTSA designates a ``payback period'' for each
manufacturer. The payback period represents an assumption that
consumers are willing to buy vehicles with more fuel economy technology
because the fuel economy technology saves them money on gas in the long
run. For the past several rulemaking analyses using the CAFE Model the
agency has assumed that in the absence of CAFE or other regulatory
standards, manufacturers apply technology that ``pays for itself''--by
saving the consumer money on fuel--in 30-months, or 2.5 years. NHTSA
has updated the agency's payback period for this proposed rule to
assume a full 3-year payback period based on an examination of
empirical economics literature. This is discussed in detail in Section
II.E.1.a below, and in the Draft TSD and PRIA.
Before the agency begins building the Market Data Input File for
any analysis, NHTSA must consider what model year vehicles comprise the
analysis fleet. There is an inherent time delay in the data the agency
can use for any particular analysis because NHTSA receives compliance
data after a model year has been completed.
Using recent data for the analysis fleet is more likely to reflect
the current vehicle fleet than older data. Recent data reflects (1)
manufacturers' realized decisions on what fuel economy-improving
technology to apply; (2) mix shifts in response to consumer
preferences; (e.g., more recent data reflects manufacturer and consumer
preference towards larger vehicles),\75\ and (3) industry sales volumes
that incorporate substantive macroeconomic events. Using an analysis
fleet year that

[[Page 56467]]

has been impacted by these transitory shocks may not represent trends
in future years; however, on balance, updating to using the most
complete set of available fleet data provides the most accurate
analysis fleet for the CAFE Model to calculate compliance and effects
of different levels of future fuel economy standards. Also, using
recent data decreases the likelihood that the CAFE Model selects
compliance pathways for future standards that affect vehicles already
built in previous model years.\76\
---------------------------------------------------------------------------

\75\ See EPA, The 2024 EPA Automotive Trends Report, Greenhouse
Gas Emissions, Fuel Economy, and Technology since 1975, EPA-420-R-
24-022, pp. 17--21 (2024), available at: <a href="https://nepis.epa.gov/Exe/ZyPURL.cgi?Dockey=P101CUU6.TXT">https://nepis.epa.gov/Exe/ZyPURL.cgi?Dockey=P101CUU6.TXT</a> (accessed: Sept. 10, 2025)
(hereinafter, ``2024 EPA Automotive Trends Report'').
\76\ For example, in this analysis, the CAFE Model must apply
technology to the MY 2024 fleet from MYs 2025-2026 for the
compliance simulation that begins in MY 2027. While manufacturers
have already built MY 2024 and beyond vehicles, the most current,
complete dataset with regulatory fuel economy test results to build
the analysis fleet at the time of writing remains MY 2024 data for
the light-duty fleet.
---------------------------------------------------------------------------

At the time NHTSA starts building the analysis fleet, data received
from vehicle manufacturers \77\ offers the best snapshot of vehicles
for sale in the United States in a model year. The mid-model year
reports include information about individual vehicles at the vehicle
configuration level. NHTSA uses the vehicle configuration,
certification fuel economy, sales, regulatory class, and additional
technology data from these reports as the starting point to build a
``row'' (i.e., a vehicle configuration, with all necessary information
about the vehicle) in the Market Data Input File's Vehicles Tab.
Additional technology data comes from publicly available information,
including vehicle specification sheets, manufacturer press releases,
owner's manuals, and websites. NHTSA also generates some assumptions in
the Market Data Input File for data fields where there is limited data,
like refresh and redesign cycles for future model years, and technology
levels for certain road load reduction technologies like MR and
aerodynamic drag reduction.
---------------------------------------------------------------------------

\77\ 49 U.S.C. 32907(a)(2) and 49 CFR part 537.
---------------------------------------------------------------------------

For this analysis, the light-duty analysis fleet consists of every
vehicle model in MY 2024 in nearly every configuration that has a
different compliance fuel economy value. This results in nearly 4,000
individual rows in the Vehicles Tab of the Market Data Input File.
The next section discusses how the agency's analysis evaluates how
effectively adding technology to a vehicle in the analysis fleet
improves that vehicle's fuel economy value.
c. Technology Effectiveness Values
The CAFE Model uses technology effectiveness values to allow it to
know which technologies to apply. Without these values, it does not
know how effective any particular technology is at improving a
vehicle's fuel economy value. Accurate technology effectiveness
estimates require information about (1) the vehicle type and size; (2)
other technologies on the vehicle or being added to the vehicle at the
same time; and (3) and how the vehicle is driven. Any
oversimplification of these complex factors could make the
effectiveness estimates less accurate.
To build a database of technology effectiveness estimates that
includes these factors, NHTSA partners with Argonne. Argonne has
developed and maintains a modeling and simulation tool called Autonomie
that generates technology effectiveness estimates for the CAFE Model.
The Autonomie Model is a mathematical representation of an entire
vehicle, including its individual technologies (such as the engine and
transmission), overall vehicle characteristics (such as mass and
aerodynamic drag), and environmental conditions (such as ambient
temperature and barometric pressure). The Autonomie Model simulates
vehicle behavior over time.
NHTSA simulates a vehicle model's behavior over the two-cycle tests
used to measure vehicle fuel economy.\78\ The two-cycle test is carried
out by operating a vehicle on a dynamometer. Using a dynamometer is
like running a car on a treadmill following a program--or more
specifically, two programs. The programs are the Federal Test Procedure
(FTP) and the Highway Fuel Economy Test (HFET). The FTP and HFET are
also commonly referred to as the urban cycle and highway cycle,
respectively. For the FTP drive cycle, the vehicle meets certain speeds
at certain times during the test, or in technical terms, the vehicle
must follow a designated speed trace.\79\ The FTP is meant to simulate
stop-and-go city driving, and the HFET is meant to simulate steady
flowing highway driving at about 50 miles per hour (mph). The agency
also uses Society of Automotive Engineers (SAE) recommended practices
to simulate hybridized drive cycles,\80\ which involves the test cycles
mentioned above as well as additional test cycles to measure battery
energy consumption and range. For PHEVs, this analysis utilizes only
the gasoline (charge-sustaining) mode for the drive cycles.
---------------------------------------------------------------------------

\78\ NHTSA is statutorily required to use the two-cycle tests to
measure vehicle fuel economy in the CAFE program. See 49 U.S.C.
32904(c) (``Testing and calculation procedures. . . . [T]he
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.'').
\79\ EPA, Emissions Standards Reference Guide: EPA Federal Test
Procedure (FTP), Last revised: Mar. 13, 2025, available at: <a href="https://www.epa.gov/emission-standards-reference-guide/epa-federal-test-procedure-ftp">https://www.epa.gov/emission-standards-reference-guide/epa-federal-test-procedure-ftp</a> (accessed: Sept. 10, 2025).
\80\ SAE, Recommended Practice for Measuring the Exhaust
Emissions and Fuel Economy of Hybrid-Electric Vehicles, Including
Plug-in Hybrid Vehicles, SAE Standard J1711_202302 (2023), SAE
International: Warrendale, PA, available at: <a href="https://www.sae.org/standards/content/j1711_202302/">https://www.sae.org/standards/content/j1711_202302/</a> (accessed: Sept. 10, 2025); SAE,
Battery Electric Vehicle Energy Consumption and Range Test
Procedure, SAE Standard J1634_202104 (2021), SAE International:
Warrendale, PA, available at: <a href="https://www.sae.org/standards/content/j1634_202104/">https://www.sae.org/standards/content/j1634_202104/</a> (accessed: Sept. 10, 2025).
---------------------------------------------------------------------------

Measuring every vehicle's fuel economy value by using the same test
cycles ensures that the fuel economy certification results are
repeatable for each vehicle model and comparable across all of the
different vehicle models. When performing physical vehicle cycle
testing, sophisticated test and measurement equipment is calibrated
according to strict industry standards, which ensures repeatability and
comparability of the results. Testing variables can include
dynamometers, environmental conditions, types and locations of
measurement equipment, and precise testing procedures. These physical
tests provide the benchmarking empirical data used to develop and
verify Autonomie's vehicle control algorithms and simulation results.
Autonomie's inputs are discussed in more detail later in this section.
Full-vehicle modeling and simulation are also essential to
measuring how all technologies on a vehicle interact. For example, if
technology A improves a particular vehicle's fuel economy by 5 percent
and technology B improves a particular vehicle's fuel economy by 10
percent, an analysis using single or limited point estimates may
erroneously assume that applying both of these technologies together
would achieve a simple additive fuel economy improvement of 15 percent.
Single point estimates generally do not provide accurate effectiveness
values because they do not capture complex relationships among
technologies. Technology effectiveness often differs significantly
depending on the vehicle type (e.g., sedan or pickup truck) and the way
in which the technology interacts with other technologies on the
vehicle, as different technologies may provide different incremental
levels of fuel economy improvement if implemented alone or in
combination with other technologies. Any oversimplification of these
complex factors could lead to less accurate technology effectiveness
estimates.

[[Page 56468]]

In addition, because manufacturers often add several fuel-saving
technologies simultaneously when redesigning a vehicle, it is difficult
to isolate the effect of adding any one individual technology to the
full-vehicle system. Modeling and simulation offer the opportunity to
isolate the effects of individual technologies by using a single or
small number of initial vehicle configurations and incrementally adding
technologies to those configurations. This provides a consistent
reference point for the incremental effectiveness estimates for each
technology and for combinations of technologies for each vehicle type.
Vehicle modeling also reduces the potential for overcounting or
undercounting technology effectiveness.
Argonne does not build an individual vehicle model for every
single-vehicle configuration in NHTSA's light-duty Market Data Input
File. This would be nearly impossible, because Autonomie requires very
detailed data on hundreds of different vehicle attributes (e.g., the
weight of the vehicle's fuel tank, the weight of the vehicle's
transmission housing, the weight of the engine, or the vehicle's 0-60
mph time) to build a vehicle model. For practical reasons, NHTSA cannot
acquire 4,000 vehicles and obtain these measurements every time the
agency promulgates a new rule, and the agency cannot acquire vehicles
that have not yet been built. Rather, Argonne builds a discrete number
of vehicle models representative of the most popular vehicles on sale
today. The agency refers to the vehicle model's type and performance
level as the vehicle's ``technology class.'' By assigning each vehicle
in the Market Data Input File a ``technology class,'' NHTSA can connect
it to the Autonomie effectiveness estimate that best represents how
effective the technology would be on the vehicle, accounting for
vehicle characteristics like body style (e.g., sedan or pickup truck)
and performance metrics. Because each vehicle technology class has
unique characteristics, the effectiveness of technologies and
combinations of technologies is different for each technology class.
There are 10 technology classes for this analysis: small car
(SmallCar), small performance car (SmallCarPerf), medium car (MedCar),
medium performance car (MedCarPerf), small SUV (SmallSUV), small
performance SUV (SmallSUVPerf), medium SUV (MedSUV), medium performance
SUV (MedSUVPerf), pickup truck (Pickup), and high towing pickup truck
(PickupHT).
NHTSA uses a two-step process that involves two algorithms to give
vehicles a ``fit score'' that determines which vehicles best fit into
each technology class. At the first step, the agency determines the
vehicle's size. At the second step, NHTSA determines the vehicle's
performance level. Both algorithms consider several metrics about the
individual vehicle and compare that vehicle to other vehicles in the
analysis fleet. This process is discussed in detail in Draft TSD
Chapter 2.2.
Consider NHTSA's example Ravine Runner F Series, which is a medium-
sized performance SUV. The exact same combination of technologies on
the Ravine Runner F Series operate differently in a compact car or
pickup truck because they are different vehicle sizes. The example
Ravine Runner F Series also achieves slightly better performance
metrics than other medium-sized SUVs in the analysis fleet. By
``performance metrics,'' the agency means power, acceleration,
handling, braking, and so on. For the performance versus standard
technology classification, the agency considers the vehicle's estimated
0-60 mph time compared to an average 0-60 mph time for the vehicle's
technology class. Accordingly, the ``technology class'' for the Ravine
Runner F Series in the agency's analysis is ``MedSUVPerf,'' because it
meets the criteria of a ``performance'' 0-60 mph acceleration time.
Table II-2 shows how vehicles in different technology classes that
use the exact same fuel economy technology have very different absolute
fuel economy values. Note that the Autonomie absolute fuel economy
values are not used directly in the CAFE Model; NTHSA calculates the
ratio between two Autonomie absolute fuel economy values (one for each
technology key for a specific technology class) and applies that ratio
to an analysis fleet vehicle's starting fuel economy value.
[GRAPHIC] [TIFF OMITTED] TP05DE25.021

Depending on the technology, when two technologies are added to the
vehicle together, they may not result in an additive fuel economy
improvement. This is an important concept to understand because in
Section II.D, NHTSA presents technology effectiveness estimates for
every single combination of technology that could be applied to a
vehicle. In some cases, technology effectiveness estimates show that a
combined technology has a different effectiveness estimate than if the
individual technologies were added together individually. However, this
is expected and not an error. Continuing NHTSA's example from above,
turbocharging technology and dynamic cylinder deactivation (DEAC)
technology both improve fuel economy by reducing the engine
displacement and accordingly burning less fuel. Turbocharging allows a
manufacturer to use a smaller engine that can offer performance
equivalent to a larger naturally aspirated engine, and its fuel
efficiency improvements are, in part, due to the reduced displacement.
DEAC effectively makes an engine with a particular displacement
intermittently offer some of the fuel economy benefits of a smaller
displacement engine by deactivating cylinders when the work demand does
not require the full engine displacement and reactivating them as-
needed to meet higher work demands;

[[Page 56469]]

the greater the displacement of the deactivated cylinders, the greater
the fuel economy benefit. Therefore, a manufacturer upgrading to an
engine that uses both a turbocharger and DEAC technology, like the
TURBOD engine in the example above, would not see the full combined
fuel economy improvement from that specific combination of
technologies. Table II-3 shows a vehicle's fuel economy value when
using the first-level DEAC technology and when using the first-level
turbocharging technology, compared to the agency's example vehicle that
uses both of those technologies combined with a TURBOD engine.
[GRAPHIC] [TIFF OMITTED] TP05DE25.022

As expected, the percent improvement in Table II-3 between the
first and second rows is 1.7 percent and between the third and fourth
rows is 0.3 percent, even though the only difference within the two
sets of technology keys is the DEAC technology (note that the agency
only compares technology keys within the same technology class). This
is because there are complex interactions between all fuel economy-
improving technologies. The agency models these individual technologies
and groups of technologies to reduce the uncertainty and improve the
accuracy of the CAFE Model outputs.
Some technology synergies that NHTSA discusses in Section II.D
include advanced engine and hybrid powertrain technology synergies. As
an example, NHTSA does not see a particularly high effectiveness
improvement from applying advanced engines to existing parallel strong
hybrid (e.g., P2) architectures.\81\ In this instance, the P2
powertrain improves fuel economy, in part, by allowing the engine to
spend more time operating at efficient engine speed and load
conditions. This reduces the advantage of adding advanced engine
technologies, which also improve fuel economy, by broadening the range
of speed and load conditions for the engine to operate at high
efficiency. This redundancy in fuel-saving mechanisms results in a
lower effectiveness when the technologies are added to each other.
Again, NHTSA expects that different combinations of technologies will
provide different effectiveness improvements on different vehicle
types. These examples all illustrate relationships observed using only
full-vehicle modeling and simulation.
---------------------------------------------------------------------------

\81\ A parallel strong hybrid powertrain is fundamentally
similar to a conventional powertrain but adds one electric motor to
improve efficiency. Draft TSD Chapter 3 shows all of the parallel
strong hybrid powertrain options that NHTSA has modeled in this
analysis.
---------------------------------------------------------------------------

Just as NHTSA's CAFE Model analysis requires a large set of
technology inputs and assumptions, the Autonomie modeling uses a large
set of technology inputs and assumptions. Figure II-2 below shows the
suite of fuel consumption input data used in the Autonomie modeling to
generate the fuel consumption input data NHTSA uses in the CAFE Model.

[[Page 56470]]

[GRAPHIC] [TIFF OMITTED] TP05DE25.023

As shown in Figure II-2 above, full-vehicle benchmarking is a major
source of data for the Autonomie model. For full-vehicle benchmarking,
vehicles are instrumented with sensors and tested on both the road and
chassis dynamometers (i.e., the full-vehicle treadmills used to
exercise the vehicle to provide means to calculate vehicle's fuel
economy values) under different conditions and duty-cycles. Vehicles
are selected for benchmarking with the goal of selecting a mix of
vehicles most representative of vehicle fleet and available
technologies, taking into account sales volume, cost, and availability.
Some examples of full-vehicle benchmark testing performed in
conjunction with the agency's partners at Argonne include a 2019
Chevrolet Silverado, a 2021 Toyota Rav4 Prime, and a 2022 Hyundai
Sonata Hybrid.\82\ NHTSA has produced a report for each vehicle
benchmarked, which can be found in the docket. As discussed further
below, full-vehicle benchmarking data are used as inputs to the engine
modeling and Autonomie full-vehicle simulation modeling. Component
benchmarking is like full-vehicle benchmarking, but instead of testing
a full vehicle, the agency instruments a single production component or
prototype component with sensors and tests it on a similar duty-cycle
as a full vehicle. Examples of components NHTSA benchmarks include
engines, transmissions, axles, electric motors, and batteries.
Component benchmarking data are used as an input to component modeling,
where a production or prototype component is changed in fit, form, or
function and modeled in the same scenario. As an example, NHTSA might
model a decrease in the size of holes in fuel injectors to see the fuel
atomization impact or see how it affects the fuel spray angle.
---------------------------------------------------------------------------

\82\ For all Argonne full-vehicle benchmarking reports, see
Docket No. NHTSA-2023-0022-0010.
---------------------------------------------------------------------------

NHTSA uses a range of models to do the component modeling. As shown
in Figure II-2, battery pack modeling using Argonne's BatPaC Model and
engine modeling are two of the most significant component models used
to generate data for the Autonomie modeling. NHTSA discusses BatPaC in
detail in Section II.D, but briefly, BatPaC is the battery pack
modeling tool used to estimate the cost of vehicle battery packs for
all hybridized vehicles, which is based on the materials chemistry,
battery design, and manufacturing design of the plants manufacturing
the battery packs.
Engine modeling is used to generate engine fuel map models that
define the fuel consumption rate for an engine equipped with specific
technologies when operating over a variety of engine load and engine
speed conditions. Some performance metrics captured in engine modeling
include power, torque, airflow, volumetric efficiency, fuel
consumption, turbocharger performance and matching, pumping losses, and
more. Each engine map model has been developed ensuring the engine will
still operate under real-world constraints using a suite of other
models. Some examples of these models that ensure the engine map models
capture real-world operating constraints include simulating heat
release through a predictive combustion model, simulating knock
characteristics through a kinetic fit knock model,\83\ and using
physics-based heat flow and friction models, among others. NHTSA
simulates these constraints using data gathered from component
benchmarking as well as engineering and physics calculations.
---------------------------------------------------------------------------

\83\ Engine knock occurs when combustion of some of the air/fuel
mixture in the cylinder does not result from propagation of the
flame front ignited by the spark plug; rather one or more pockets of
air/fuel mixture explode outside of the envelope of the normal
combustion front. Engine knock can result in unsteady operation and
damage to the engine.
---------------------------------------------------------------------------

IAV develops the engine map models, using their GT-POWER modeling
tool, by creating a base, or root, engine map and then modifying that
root map, incrementally, to isolate the effects of the added
technologies. The engine maps are based on real-world engine

[[Page 56471]]

designs. An important feature of the engine maps is that they use a
knock model. As noted above, a knock model ensures that any engine size
or specification that the agency models in the analysis does not result
in engine knock, which could damage engine components in a real-world
vehicle. Though the same engine map models are used for all vehicle
technology classes, the effectiveness varies based on the
characteristics of each class. For example, as discussed above, a
compact car with a turbocharged engine has a different effectiveness
value than a pickup truck with the same engine technology type. The
engine map model development and specifications are discussed further
in Chapter 3 of the Draft TSD.
Argonne also compiles a database of vehicle attributes and
characteristics reasonably representative of the vehicles in that
technology class used to build the vehicle models. Relevant vehicle
attributes may include a vehicle's fuel efficiency, HP, 0-60 mph
acceleration time, and stopping distance, among others, while vehicle
characteristics may include whether the vehicle has all-wheel-drive,
18-inch wheels, summer tires, and so on. Argonne has identified
representative vehicle attributes and characteristics for the light-
duty fleet from publicly available information and automotive
benchmarking databases, such as A2Mac1,\84\ Argonne's Downloadable
Dynamometer Database (D\3\),\85\ EPA compliance and fuel economy
data,\86\ EPA guidance on 2-cycle tests,\87\ and industry
partnerships.\88\ The resulting vehicle technology class baseline
assumptions and characteristics database consists of over 100 different
attributes like vehicle height and width and weights for individual
vehicle parts.
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\84\ A2Mac1: Automotive Benchmarking (proprietary data),
available at: <a href="https://www.a2mac1.com">https://www.a2mac1.com</a> (accessed: Sept. 10, 2025).
A2Mac1 is subscription-based benchmarking service that conducts
vehicle and component teardown analyses. Annually, A2Mac1 removes
individual components from production vehicles, such as oil pans,
electric machines, engines, and transmissions, among many other
components. These components are weighed and documented for key
specifications, which are then available to subscribers.
\85\ Argonne National Laboratory, Downloadable Dynamometer
Database, Last revised: 2025, available at: <a href="https://www.anl.gov/taps/downloadable-dynamometer-database">https://www.anl.gov/taps/downloadable-dynamometer-database</a> (accessed: Sept. 10, 2025).
\86\ EPA, Compliance and Fuel Economy Data: Data on Cars Used
for Testing Fuel Economy, Last revised: May 19, 2025, available at:
<a href="https://www.epa.gov/compliance-and-fuel-economy-data/data-cars-used-testing-fuel-economy">https://www.epa.gov/compliance-and-fuel-economy-data/data-cars-used-testing-fuel-economy</a> (accessed: Sept. 10, 2025).
\87\ EPA PD TSD, at pp. 2-265--2-266.
\88\ North American Council for Freight Efficiency, Research &
Analysis Are Fundamental (2025), available at: <a href="https://www.nacfe.org/research/overview">https://www.nacfe.org/research/overview</a> (accessed: Sept. 10, 2025).
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Argonne then assigns ``reference'' technologies to each vehicle
model. The reference technologies are the technologies on the first
step of each CAFE Model technology pathway, and they closely (but not
exactly) correlate to the technology abbreviations that NHTSA uses in
the CAFE Model. As an example, the first Autonomie vehicle model in the
MedSUVPerf technology class starts out with the least advanced engine,
which is DOHC (a dual-overhead cam engine) in the CAFE Model, or eng01
in the Autonomie modeling. The vehicle has the least advanced
transmission (AT5), the least advanced MR level (MR0), the least
advanced aerodynamic body style (AERO0), and the least advanced ROLL
level (ROLL0). The first vehicle model is also defined by initial
vehicle attributes and characteristics that consist of data from the
suite of sources mentioned above. Again, these attributes are meant to
represent the average of vehicle attributes found on vehicles in a
certain technology class.
Then, just as a vehicle manufacturer tests its vehicles to ensure
they meet specific performance metrics, Autonomie ensures that the
built vehicle model meets its performance metrics. NHTSA includes
quantitative performance metrics in the agency's Autonomie modeling to
ensure that the vehicle models can meet real-world performance metrics
that consumers observe and that are important for vehicle utility and
customer satisfaction. The four performance metrics that NHTSA uses in
the Autonomie modeling for light-duty vehicles are low-speed
acceleration (the time required to accelerate from 0 to 60 mph), high-
speed passing acceleration (the time required to accelerate from 50 to
80 mph), gradeability (the ability of the vehicle to maintain constant
65 mph speed on a 6-percent upgrade), and towing capacity for light-
duty pickup trucks. The agency has been using these performance metrics
for the last several CAFE Model analyses, and vehicle manufacturers
have agreed that these performance metrics are representative of the
metrics considered in the automotive industry.\89\ Argonne simulates
the vehicle model driving the two-cycle tests (i.e., running its
treadmill ``programs'') to ensure that it meets its applicable
performance metrics (i.e., NHTSA's MedSUVPerf does not have to meet the
towing capacity performance metric because it is not a pickup truck).
These metrics are based on commonly used metrics in the automotive
industry, including SAE J2807 tow requirements.\90\ Additional details
about how NHTSA sizes light-duty powertrains in Autonomie to meet
defined performance metrics can be found in the CAFE Analysis Autonomie
Documentation.
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\89\ See NHTSA-2021-0053-1492, at 134 (``Vehicle design
parameters are never static. With each new generation of a vehicle,
manufacturers seek to improve vehicle utility, performance, and
other characteristics based on research of customer expectations and
desires, and to add innovative features that improve the customer
experience. [NHTSA and EPA] have historically sought to maintain the
performance characteristics of vehicles modeled with fuel economy-
improving technologies. Auto Innovators encourages the Agencies to
maintain a performance-neutral approach to the analysis, to the
extent possible. Auto Innovators appreciates that the Agencies
continue to consider high-speed acceleration, gradeability, towing,
range, traction, and interior room (including headroom) in the
analysis when sizing powertrains and evaluating pathways for road-
load reductions. All of these parameters should be considered
separately, not just in combination. (For example, we do not support
an approach where various acceleration times are added together to
create a single `performance' statistic. Manufacturers must provide
all types of performance, not just one or two to the detriment of
others.)'').
\90\ SAE, Performance Requirements for Determining Tow-Vehicle
Gross Combination Weight Rating and Trailer Weight Rating, SAE
Standard J2807_202411, SAE International: Warrendale, PA, available
at: <a href="https://doi.org/10.4271/J2807_202411">https://doi.org/10.4271/J2807_202411</a> (accessed: Sept. 10, 2025).
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If the vehicle model does not initially meet one of the performance
metrics, then Autonomie's powertrain sizing algorithm increases the
vehicle's engine power. The increase in power is achieved by increasing
engine displacement (which is the measure of the volume of all
cylinders in an engine), which might involve an increase in the number
of engine cylinders, which may lead to an increase in the engine
weight. This iterative process then determines if the baseline vehicle
with increased engine power and corresponding updated engine weight
meets the required performance metrics. The powertrain sizing algorithm
stops once all the baseline vehicle's performance requirements are met.
Some technologies require extra steps for performance optimization
before the vehicle models are ready for simulation. Specifically, the
sizing and optimization process is more complex for hybridized
vehicles, which include hybrid electric vehicle (HEVs) and PHEVs,
compared to vehicles with only ICE engines, as discussed further in the
Draft TSD Chapter 3.3.4. As an example, a PHEV powertrain that can
travel a certain number of miles on its battery energy alone (referred
to as all-electric range (AER)), or as performing in electric-only
mode) is also sized to ensure that it can

[[Page 56472]]

meet the performance requirements of the SAE standardized drive cycles
mentioned above in electric-only mode. Autonomie follows EPA's
regulatory guidance and uses the SAE J1711 test procedure to model the
incremental effectiveness of adding PHEV technology to a vehicle. The
procedure from this guidance is divided into several phases that model
``charge sustaining,'' ``charge depleting,'' and ``cold operation''
\91\ calculations for different test cycles. This is described in
detail in the CAFE Analysis Autonomie Documentation.\92\ Draft TSD
Chapter 3.3.4 and the CAFE Analysis Autonomie Documentation contain
more information on PHEV effectiveness.
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\91\ SAE J1711 cold test operation occurs in both Charge
Sustaining and Charge Depleting modes.
\92\ Chapter ``Vehicle Sizing Process'' of the CAFE Analysis
Autonomie Documentation.
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Every time a vehicle model in Autonomie adopts a new technology,
the vehicle weight is updated to reflect the weight of the new
technology. For some technologies, the direct weight change is easy to
assess. For example, when a vehicle is updated to a higher geared
transmission, the weight of the original transmission is replaced with
the corresponding transmission weight (e.g., the weight of a vehicle
moving from a 6-speed automatic (AT6) to an 8-speed automatic (AT8)
transmission is updated based on the 8-speed transmission weight). For
other technologies, like engine technologies, calculating the updated
vehicle weight is more complex. As discussed earlier, modeling a change
in engine technology involves both the new technology adoption and a
change in power (because the reduction in vehicle weight leads to lower
engine loads and a resized engine). When a vehicle adopts new engine
technology, the associated weight change to the vehicle is accounted
for based on a regression analysis of engine weight versus power.\93\
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\93\ Merriam-Webster, Definition: Regression analysis, available
at: <a href="https://www.merriam-webster.com/dictionary/regression%20analysis">https://www.merriam-webster.com/dictionary/regression%20analysis</a>
(accessed: Sept. 10, 2025) (``the use of mathematical and
statistical techniques to estimate one variable from another
especially by the application of regression coefficients, regression
curves, regression equations, or regression lines to empirical
data''). In this case, NHTSA is estimating engine weight by looking
at the relationship between engine weight and engine power.
---------------------------------------------------------------------------

In addition to using performance metrics commonly used by
automotive manufacturers, NHTSA instructs Autonomie to mimic real-world
manufacturer decisions by resizing engines only at specific intervals
in the analysis and in specific ways. When a vehicle manufacturer is
making decisions about how to change a vehicle model to add fuel
economy-improving technology, the manufacturer could entirely redesign
the vehicle, or the manufacturer could refresh the vehicle with
relatively more minor technology changes. NHTSA discusses how the
agency's modeling captures vehicle refreshes and redesigns in more
detail below, but the details are easier to understand if the agency
starts by discussing some straightforward yet important concepts.
First, most changes to a vehicle's engine happen when the vehicle is
redesigned and not refreshed, as incorporating a new engine in a
vehicle is a 10- to 15-year endeavor at a cost of $750 million to $1
billion.\94\ However, manufacturers will use that same basic engine,
with only minor changes, across multiple vehicle models. NHTSA models
engine ``inheriting'' from one vehicle to another in both the Autonomie
modeling and the CAFE Model. During a vehicle refresh, one vehicle may
inherit an already redesigned engine from another vehicle that shares
the same platform. In the Autonomie modeling, when a new vehicle adopts
fuel-saving technologies that are inherited, the engine is not resized
(i.e., the properties from the reference vehicle are used directly).
While this may result in a small change in vehicle performance,
manufacturers have consistently told NHTSA that the high costs for
redesign and the increased manufacturing complexity that would result
from resizing engines for small technology changes preclude them from
doing so. In addition, when a manufacturer applies MR technology (i.e.,
makes the vehicle lighter), the vehicle can use a less powerful engine
because there is less weight to move. However, Autonomie will use a
resized engine only at certain MR application levels, as a
representation of how manufacturers update their engine technologies.
Again, this is intended to reflect manufacturers' comments that it
would be unreasonable and unaffordable to resize powertrains for every
unique combination of technologies. NHTSA has determined that the
agency's rules about performance neutrality and technology inheritance
result in a fleet that is essentially performance neutral.
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\94\ 2015 NAS Report, at p. 256. It is likely that manufacturers
have made improvements in the product lifetime and development
cycles for engines since this NAS report and the report that NAS
relied on, but NHTSA does not have data on how much. NHTSA believes
that it is still reasonable to conclude that generating an all-new
engine or transmission design with little to no carryover from the
previous generation would be a notable investment.
---------------------------------------------------------------------------

NHTSA's analysis ensures that vehicle models maintain consistent
performance levels to allow NHTSA to estimate the costs and benefits of
different levels of fuel economy standards more accurately. For its
analysis, NHTSA wants to capture only the costs and benefits that
result from NHTSA changing its CAFE standards. For example, a
manufacturer may add a turbocharger to its engine without downsizing
the engine and then direct all the additional engine work to additional
vehicle HP instead of vehicle fuel economy improvements. If NHTSA
modeled increases or decreases in performance because of fuel economy-
improving technology, then that increase in performance has a monetized
benefit attached to it that is not specifically due to the agency's
fuel economy standards. By ensuring that the agency's vehicle modeling
remains performance neutral, NHTSA can better ensure that the agency is
reasonably capturing the costs and benefits due only to potential
changes in the fuel economy standards.
Autonomie then adopts one single fuel-saving technology to the
initial vehicle model, keeping everything else the same except for that
one technology and the attributes associated with it. Once one
technology is assigned to the vehicle model and the new vehicle model
meets its performance metrics, the vehicle model is used as an input to
the full-vehicle simulation. This means that Autonomie simulates
driving the optimized vehicle models for each technology class on the
test cycles NHTSA described above. As an example, the Autonomie
modeling could start with 10 initial vehicle models (one for each
technology class in the analysis). Those 10 initial vehicle models use
a 5-speed automatic transmission (AT5). Argonne then builds 10 new
vehicle models; the only difference between the 10 new vehicle models
and the first set of vehicle models is that the new vehicle models have
a 6-speed automatic transmission (AT6). Replacing the AT5 with an AT6
would lead either to an increase or decrease in the total weight of the
vehicle because each technology class includes different assumptions
about transmission weight. Argonne then ensures that the new vehicle
models with the 6-speed automatic transmission meet their performance
metrics. Argonne has 20 different vehicle models that can be simulated
on the two-cycle tests. This process is repeated for each technology
option and for each technology class. This results in 10 separate
datasets, each with over

[[Page 56473]]

100,000 results, which include information about a vehicle model made
of specific fuel economy-improving technology and the fuel economy
value that the vehicle model achieved by driving its simulated test
cycles.
NHTSA condenses the million-or-so datapoints from Autonomie into
three datasets used in the CAFE Model. These three datasets include (1)
the fuel economy value that each modeled vehicle achieved while driving
the test cycles, for every technology combination in every technology
class (converted into ``fuel consumption,'' which is the inverse of
fuel economy; fuel economy is mpg and fuel consumption is gallons per
mile); (2) the fuel economy value for PHEVs driving those test cycles,
when those vehicles drive on gasoline only; and (3) optimized battery
costs for each vehicle that adopts some sort of hybridized powertrain
(discussed in more detail below). NHTSA then uses these datapoints to
produce the technology effectiveness values in the CAFE Model.
Technology effectiveness values allow the CAFE Model to simulate
how manufacturers can improve fuel economy relative to a consistent
reference point by adding technology and combinations of technologies.
The effectiveness values represent the simulated relative improvement
of fuel economy that can be applied to a vehicle when new technology is
added. These values are calculated based on comparing the achieved fuel
economies simulated using the Autonomie full-vehicle models.
NHTSA adds the technology effectiveness values to the CAFE Model as
inputs. When the CAFE Model runs a simulation, the effectiveness values
for that vehicle's class determine how much the vehicle's fuel economy
improves with the application of each technology. The CAFE Model's
compliance simulation begins with actual fuel economy values derived
from compliance data. As the CAFE Model adds technology, the technology
effectiveness values are applied to estimate the new fuel economy value
for the vehicle, and the CAFE Model runs millions of combinations of
technologies on different vehicles to find the most cost-effective
means of compliance for each manufacturer and fleet.
Return to the Ravine Runner F Series example, which has a starting
fuel economy value of just over 26 mpg and a starting technology key
``TURBOD; AT10L2; SS12V; ROLL0; AERO5; MR3.'' The equivalent Autonomie
vehicle model has a starting fuel economy value of just over 30.8 mpg
and is represented by the technology descriptors Midsize SUV, Perfo,
Micro Hybrid, eng38, AUp 10, MR3, AERO1, or ROLL0. In MY 2028, the CAFE
Model determines that Generic Motors needs to redesign the Ravine
Runner F Series to reach Generic Motors' new CAFE standard. The Ravine
Runner F Series now has new fuel economy-improving technology, a
parallel strong HEV with a TURBOE engine, an integrated 8-speed
automatic transmission, 30-percent improvement in ROLL, 20-percent
aerodynamic drag reduction, and 10-percent lighter glider (i.e., MR).
Its new technology key is now P2TRBE, ROLL30, AERO20, MR3. Table II-4
shows how the incremental fuel economy improvement from the Autonomie
simulations is applied to the Ravine Runner F Series' startin

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