Corporate Average Fuel Economy Standards for Passenger Cars and Light Trucks for Model Years 2027-2032 and Fuel Efficiency Standards for Heavy-Duty Pickup Trucks and Vans for Model Years 2030-2035

Federal RegisterAug 17, 2023

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 531, 533, 535, and 537

[NHTSA-2023-0022]

RIN 2127-AM55

Corporate Average Fuel Economy Standards for Passenger Cars and Light Trucks for Model Years 2027-2032 and Fuel Efficiency Standards for Heavy-Duty Pickup Trucks and Vans for Model Years 2030-2035

AGENCY:

National Highway Traffic Safety Administration (NHTSA).

ACTION:

Notice of proposed rulemaking.

SUMMARY:

NHTSA, on behalf of the Department of Transportation (DOT), is proposing new fuel economy standards for passenger cars and light trucks and fuel efficiency standards for model years (MYs) 2027-31 that increase at a rate of 2 percent per year for passenger cars and 4 percent per year for light trucks, and new fuel efficiency standards for heavy-duty pickup trucks and vans (HDPUVs) for MYs 2030-2035 that increase at a rate of 10 percent per year. NHTSA is also setting forth proposed augural standards for MY 2032 passenger cars and light trucks, that would increase at 2 percent and 4 percent year over year, respectively, as compared to the prior year's standards. NHTSA currently projects that the proposed standards would require an industry fleet-wide average for passenger cars and light trucks of roughly 58 miles per gallon (mpg) in MY 2032 and an industry fleet-wide average for HDPUVs of roughly 2.6 gallons per 100 miles in MY 2038. NHTSA further projects that the proposed standards would reduce average fuel outlays over the lifetimes of passenger cars and light trucks by $1,043 and of HDPUVs by $439. These proposed standards are directly responsive to the agency's statutory mandate to improve energy conservation and reduce the nation's energy dependence on foreign sources.

DATES:

Comments:

Comments are requested on or before October 16, 2023. See the

SUPPLEMENTARY INFORMATION

section on “Public Participation,” below, for more information about written comments.

Public Hearings:

NHTSA will hold one virtual public hearing during the public comment period. The agency will announce the specific date and web address for the hearing in a supplemental

Federal Register

notice. The agency will accept oral and written comments on the rulemaking documents and will also accept comments on the Draft Environmental Impact Statement (DEIS) at this hearing. The hearing will start at 9 a.m. Eastern time and continue until everyone has had a chance to speak. See the

SUPPLEMENTARY INFORMATION

section on “Public Participation,” below, for more information about the public hearing.

ADDRESSES:

You may send comments, identified by Docket No. NHTSA-2023-0022, by any of the following methods:

•

Federal eRulemaking Portal: https://www.regulations.gov.

Follow the instructions for submitting comments.

•

Fax:

(202) 493-2251.

•

Mail:

Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

•

Hand Delivery:

Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 4 p.m. Eastern time, Monday through Friday, except Federal holidays.

Instructions:

All submissions received must include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. All comments received will be posted without change to

https://www.regulations.gov,

including any personal information provided. For detailed instructions on sending comments and additional information on the rulemaking process, see the “Public Participation” heading of the

SUPPLEMENTARY INFORMATION

section of this document.

Docket:

For access to the dockets or to read background documents or comments received, please visit

https://www.regulations.gov,

and/or Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590. The Docket Management Facility is open between 9 a.m. and 4 p.m. Eastern time, Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

For technical and policy issues, Joseph Bayer, CAFE Program Division Chief, Office of Rulemaking, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590; email:

joseph.bayer@dot.gov.

For legal issues, Rebecca Schade, NHTSA Office of Chief Counsel, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590; email:

rebecca.schade@dot.gov.

SUPPLEMENTARY INFORMATION:

Table of Acronyms and Abbreviations

Abbreviation

Term

AAA

American Automobile Association.

AALA

American Automotive Labeling Act.

Air Conditioning.

ACC

Advanced Clean Cars.

ACC I

Advanced Clean Cars I.

ACC II

Advanced Clean Cars II.

ACME

Adaptive Cylinder Management Engine.

ACT

Advanced Clean Trucks.

ADEAC

Advanced cylinder deactivation.

ADEACD

advanced cylinder deactivation on a dual overhead camshaft engine.

ADEACS

advanced cylinder deactivation on a single overhead camshaft engine.

ADSL

Advanced diesel engine.

AEO

Annual Energy Outlook.

AER

All-Electric Range.

AERO

Aerodynamic improvements.

AFV

Alternative fuel vehicle.

AHSS

advanced high strength steel.

AIS

Abbreviated Injury Scale.

AMPC

Advanced Manufacturing Production Tax Credit.

AMTL

Advanced Mobility Technology Laboratory.

ANL

Argonne National Laboratory.

ANSI

American National Standards Institute.

APA

Administrative Procedure Act.

traditional automatic transmissions.

AWD

All-Wheel Drive.

BEA

Bureau of Economic Analysis.

BEV

Battery electric vehicle.

BGEPA

Bald and Golden Eagle Protection Act.

BISG

Belt Mounted integrated starter/generator.

BMEP

Brake Mean Effective Pressure.

BNEF

Bloomberg New Energy Finance.

BPT

Benefit-Per-Ton.

BSFC

Brake-Specific Fuel Consumption.

BTW

Brake and Tire Wear.

CAA

Clean Air Act.

CAFE

Corporate Average Fuel Economy.

CARB

California Air Resources Board.

CBI

Confidential Business Information.

CEGR

Cooled Exhaust Gas Recirculation.

CEQ

Council on Environmental Quality.

CFR

Code of Federal Regulations.

Methane.

Compression Ignition.

CNG

Compressed Natural Gas.

Carbon Monoxide.

Carbon Dioxide.

COVID

Coronavirus disease of 2019.

CPM

Cost Per Mile.

Compression Ratio.

CRSS

Crash Report Sampling System.

CVC

Clean Vehicle Credit.

CVT

Continuously Variable Transmissions.

Calendar year.

CZMA

Coastal Zone Management Act.

DCT

Dual Clutch Transmissions.

Direct Drive.

DEAC

Cylinder Deactivation.

DEIS

Draft Environmental Impact Statement.

DFS

Dynamic Fleet Share.

DMC

Direct Manufacturing Cost.

DOE

Department of Energy.

DOHC

Dual Overhead Camshaft.

DOI

Department of the Interior.

DOT

Department of Transportation.

DPM

Diesel Particulate Matter.

Discount Rate.

DSLI

Advanced diesel engine with improvements.

DSLIAD

Advanced diesel engine with improvements and advanced cylinder deactivation.

EETT

Electrical and Electronics Technical Team.

Emission Factor.

EFR

Engine Friction Reduction.

EIA

U.S. Energy Information Administration.

EIS

Environmental Impact Statement.

EISA

Energy Independence and Security Act.

Environmental Justice.

E.O

Executive Order.

EPA

U.S. Environmental Protection Agency.

EPCA

Energy Policy and Conservation Act.

EPS

Electric Power Steering.

EFR

Engine Friction Reduction.

ESA

Endangered Species Act.

ETDS

Electric Traction Drive System.

Electric Vehicle.

FCC

Fuel Consumption Credits.

FCEV

Fuel Cell Electric Vehicle.

FCIV

Fuel Consumption Improvement Value.

FCV

Fuel Cell Vehicle.

Fuel Efficiency.

FHWA

Federal Highway Administration.

FIP

Federal Implementation Plan.

FMVSS

Federal Motor Vehicle Safety Standards.

FMY

Final Model Year.

FRIA

Final Regulatory Impact Analysis.

FTP

Federal Test Procedure.

FWCA

Fish and Wildlife Conservation Act.

FWD

Front-Wheel Drive.

FWS

U.S. Fish and Wildlife Service.

GCWR

Gross Combined Weight Rating.

GDP

Gross Domestic Product.

GES

General Estimates System.

GGE

Gasoline Gallon Equivalents.

GHG

Greenhouse Gas.

General Motors.

gpm

gallons per mile.

GREET

Greenhouse gases, Regulated Emissions, and Energy use in Transportation.

GVWR

Gross Vehicle Weight Rating.

GWh

Gigawatt hours.

Heavy-Duty.

HDPUV

Heavy-Duty Pickups and Vans.

HEG

High Efficiency Gearbox.

HEV

Hybrid Electric Vehicle.

HFET

Highway Fuel Economy Test.

HVAC

Heating, Ventilation, and Air Conditioning.

IACC

improved accessories.

IAV

IAV Automotive Engineering, Inc.

ICCT

The International Council on Clean Transportation.

ICE

Internal Combustion Engine.

IIHS

Insurance Institute for Highway Safety.

IPCC

Intergovernmental Panel on Climate Change.

IQR

Interquartile Range.

IRA

Inflation Reduction Act.

IWG

Interagency Working Group.

Light-Duty.

LDB

Low Drag Brakes.

LDV

Light-Duty Vehicle.

Learning Effects.

LEV

Low-Emission Vehicle.

LFP

Lithium Iron Phosphate.

LIB

Lithium-Ion Batteries.

LIVC

Late Intake Valve Closing.

Light truck.

MAX

maximum values.

MBTA

Migratory Bird Treaty Act.

Medium-Duty.

MDHD

Medium-Duty Heavy-Duty.

MDPCS

Minimum Domestic Passenger Car Standard.

MDPV

Medium-Duty Passenger Vehicle.

MIN

minimum values.

MMTCO

Million Metric Tons of Carbon Dioxide.

MMY

Mid-Model Year.

MOU

Memorandum of Understanding.

MOVES

Motor Vehicle Emission Simulator.

MOVES3

latest version of MOVES.

MPG

Miles Per Gallon.

mph

Miles Per Hour.

Mass Reduction.

MSRP

Manufacturer Suggested Retail Price.

Model Year.

NAAQS

National Ambient Air Quality Standards.

NADA

National Automotive Dealers Association.

NAICS

North American Industry Classification System.

NAS

National Academy of Sciences.

NCA

Nickel Cobalt Aluminum.

NEMS

National Energy Modeling System.

NEPA

National Environmental Policy Act.

NESCCAF

Northeast States Center for a Clean Air Future.

NHPA

National Historic Preservation Act.

NHTSA

National Highway Traffic Safety Administration.

NMC

Nickel Manganese Cobalt.

Nitrogen Oxide.

NPRM

Notice of Proposed Rulemaking.

NRC

National Research Council.

NREL

National Renewable Energy Laboratory.

NTTAA

National Technology Transfer and Advancement Act.

NVH

Noise-Vibration-Harshness.

NVPP

National Vehicle Population Profile.

OCR

Optical Character Recognition.

OEM

Original Equipment Manufacturer.

OHV

Overhead Valve.

OMB

Office of Management and Budget.

OPEC

Organization of the Petroleum Exporting Countries.

ORNL

Oak Ridge National Laboratories.

Passenger Car.

PEF

Petroleum Equivalency Factor.

PHEV

Plug-in Hybrid Electric Vehicle.

Particulate Matter.

2.5

fine particulate matter.

PMY

Pre-Model Year.

PRA

Paperwork Reduction Act of 1995.

PRIA

Preliminary Regulatory Impact Analysis.

Power Split.

Reference Case.

REMI

Regional Economic Models, Inc.

RIN

Regulation identifier number.

ROLL

Tire rolling resistance.

RPE

Retail Price Equivalent.

RRC

Rolling Resistance Coefficient.

SAE

Society of Automotive Engineers.

SBREFA

Small Business Regulatory Enforcement Fairness Act.

Social Cost.

SCC

Social Cost of Carbon.

SEC

Securities and Exchange Commission.

SGDI

Stoichiometric Gasoline Direct Injection.

SHEV

Strong Hybrid Electric Vehicle.

Spark Ignition.

SIP

State Implementation Plan.

SKIP

refers to skip input in market data input file.

Sulfur Dioxide.

SOC

State of Charge.

SOHC

Single Overhead Camshaft.

Sulfur Oxide.

SPR

Strategic Petroleum Reserve.

SULEV

Super-Ultra Low Emission Vehicles.

SUV

Sport Utility Vehicle.

SwRI

Southwest Research Institute.

TAR

Technical Assessment Report.

TSD

Technical Support Document.

UAW

United Automobile, Aerospace & Agricultural Implement Workers of America.

UMRA

Unfunded Mandates Reform Act of 1995.

VCR

Variable Compression Ratio.

VMT

Vehicle Miles Traveled.

VOC

Volatile Organic Compounds.

VSL

Value of a Statistical Life.

VTG

Variable Turbo Geometry.

VTGE

Variable Turbo Geometry (Electric).

VVL

Variable Valve Lift.

VVT

Variable Valve Timing.

Work Factor.

ZEV

Zero Emission Vehicle.

Does this action apply to me?

This proposal affects companies that manufacture or sell new passenger automobiles (passenger cars), non-passenger automobiles (light trucks), and HDPUV, as defined under NHTSA's Corporate Average Fuel Economy (CAFE) regulations.

Regulated categories and entities include:

“Passenger car,” “light truck,” and “heavy-duty pickup trucks and vans” are defined in 49 CFR part 523.

Category

NAICS codes

Examples of potentially regulated entities

Industry

335111

Motor Vehicle Manufacturers.

336112

Industry

811111

Commercial Importers of Vehicles and Vehicle Components.

811112

811198

423110

Industry

335312

Alternative Fuel Vehicle Converters.

336312

336399

811198

North American Industry Classification System (NAICS).

This list is not intended to be exhaustive, but rather provides a guide regarding entities likely to be regulated by this action. To determine whether particular activities may be regulated by this action, you should carefully examine the regulations. You may direct questions regarding the applicability of this action to the persons listed in

FOR FURTHER INFORMATION CONTACT

Table of Contents

I. Executive Summary

II. Technical Foundation for NPRM Analysis

A. Why is NHTSA conducting this analysis?

B. What is NHTSA analyzing?

C. What inputs does the compliance analysis require?

D. Technology Pathways, Effectiveness, and Cost

E. Consumer Responses to Manufacturer Compliance Strategies

F. Simulating Emissions Impacts of Regulatory Alternatives

G. Simulating Economic Impacts of Regulatory Alternatives

H. Simulating Safety Effects of Regulatory Alternatives

III. Regulatory Alternatives Considered in This NPRM

A. General Basis for Alternatives Considered

B. Regulatory Alternatives Under Consideration in This Proposal

IV. Effects of the Regulatory Alternatives

A. Effects on Vehicle Manufacturers

B. Effects on Society

C. Physical and Environmental Effects

D. Sensitivity Analysis

V. Basis for NHTSA's Tentative Conclusion That the Proposed Standards Are Maximum Feasible

A. EPCA, as Amended by EISA

B. Administrative Procedure Act

C. National Environmental Policy Act

D. Evaluating the EPCA/EISA Factors and Other Considerations To Arrive at the Proposed Standards 482

VI. Compliance and Enforcement

A. Background

B. Overview of Enforcement

C. Proposed Changes

D. Decision Not To Propose Non-Fuel Saving Credits or Flexibilities

VII. Public Participation

VIII. Regulatory Notices and Analyses

A. Executive Order 12866, Executive Order 13563

B. DOT Regulatory Policies and Procedures

C. Executive Order 13990

D. Environmental Considerations

E. Regulatory Flexibility Act

F. Executive Order 13132 (Federalism)

G. Executive Order 12988 (Civil Justice Reform)

H. Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments)

I. Unfunded Mandates Reform Act

J. Regulation Identifier Number

K. National Technology Transfer and Advancement Act

L. Department of Energy Review

M. Paperwork Reduction Act

N. Privacy Act

IX. Regulatory Text

I. Executive Summary

NHTSA, on behalf of the DOT, is proposing new corporate average fuel economy (CAFE) standards for passenger cars and light trucks

for MYs 2027-2032,

and new fuel efficiency standards for heavy-duty pickup trucks and vans

(HDPUVs) for MYs 2030-2035. This proposal responds to NHTSA's statutory obligation to set CAFE and HDPUV standards at the maximum feasible level that the agency determines vehicle manufacturers can achieve in each MY, in order to improve energy conservation.

Improving energy conservation by raising CAFE and HDPUV standard stringency not only helps consumers save money on fuel, but also improves national energy security and reduces harmful emissions.

Passenger cars are generally sedans, station wagons, and two-wheel drive crossovers and sport utility vehicles (CUVs and SUVs), while light trucks are generally four-wheel drive sport utility vehicles, pickups, minivans, and passenger/cargo vans. “Passenger car” and “light truck” are defined more precisely at 49 CFR part 523.

As discussed further below, NHTSA is proposing six MYs of standards for each fleet, and notes that the final year of standards proposed for passenger cars and light trucks, MY 2032, is “augural,” as in the 2012 final rule that established CAFE standards for MYs 2017 and beyond.

HDPUVs are generally Class 2b/3 work trucks, fleet SUVs, work vans, and cutaway chassis-cab vehicles. “Heavy-duty pickup trucks and vans” are more precisely defined at 49 CFR part 523.

See

49 U.S.C. 32902.

Based on the information currently before us, NHTSA estimates that this proposal, if implemented, would reduce gasoline consumption by 88 billion gallons relative to baseline levels for passenger cars and light trucks, and by approximately 2.6 billion gallons relative to baseline levels for HDPUVs through calendar year 2050. Reducing fuel consumption has multiple benefits—it improves our nation's energy security, it saves consumers money, and reduces harmful pollutant emissions that lead to adverse human and environmental health outcomes and climate change. NHTSA estimates that this proposal, if implemented, could reduce carbon dioxide (CO

) emissions by 885 million metric tons for passenger cars and light trucks, and by 22 million metric tons for HDPUVs through calendar year 2050. While consumers would pay more for new vehicles upfront, we estimate that they would save money on fuel costs over the lifetimes of those new vehicles—lifetime fuel savings exceed modeled regulatory costs by roughly $100, on average, for passenger car and light truck buyers of MY 2032 vehicles, and roughly $300, on average, for HDPUV buyers of MY 2038 vehicles. Net benefits for the preferred alternative for passenger cars and light truck are estimated to be $16.8 billion at a 3 percent discount rate (DR), and $8.4 billion at a 7 percent DR, and for HDPUVs, net benefits are estimated to be $2.2 billion at a 3 percent DR, and $1.4 billion at a 7 percent DR.

NHTSA's proposal is also consistent with Executive Order (E.O.) 14037, “Strengthening American Leadership in Clean Cars and Trucks,” (August 5, 2021), which directs the Secretary of Transportation (by delegation, NHTSA) to develop rulemakings under Energy Independence and Security Act of 2007 (EISA)

to consider beginning work on a rulemaking to establish new fuel economy standards for passenger cars and light trucks beginning with MY 2027 and extending through at least MY 2030, and to consider beginning work on a rulemaking to establish new fuel efficiency standards for HDPUVs beginning with MY 2028 and extending through at least MY 2030, consistent with applicable law.

See

49 U.S.C. Chapter 329, generally.

Id,

Sec. 2.

The record for this proposal comprised this Notice of Proposed Rulemaking (NPRM), a Draft Technical

Support Document (Draft TSD), a Preliminary Regulatory Impact Assessment (PRIA), and a Draft EIS, along with extensive analytical documentation, supporting references, and many other resources. Most of these resources are available on NHTSA's website,

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.

See National Highway Traffic Safety Administration. 2023. Corporate Average Fuel Economy. Available at:

https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy.

(Accessed: May 31, 2023).

The proposal considers a range of regulatory alternatives for each fleet, consistent with NHTSA's obligations under the Administrative Procedure Act (APA), National Environmental Policy Act (NEPA) and E.O. 12866. Specifically, NHTSA considered four regulatory alternatives for passenger cars and light trucks, as well as the No-Action Alternative. Each alternative is labeled for the type of vehicle and the rate of increase in fuel economy stringency, for example, PC1LT3 represents a 1 percent increase in Passenger Car standards and a 3 percent increase in Light Truck standards. We include three regulatory alternatives for HDPUVs, each representing different possible rates of year-over-year increase in the stringency of new fuel economy and fuel efficiency standards, as well as the No-Action Alternative. For example, HDPUV4 represents a 4 percent increase in fuel efficiency standards applicable to HDPUVs. The regulatory alternatives are as follows:

In a departure from recent CAFE rulemaking trends, we have applied different rates of stringency increase to the passenger car and the light truck fleets. Rather than have both fleets increase their respective standards at the same rate, light truck standards will increase at a different rate than passenger car standards. Each action alternative evaluated for this proposal has a passenger car fleet rate-of-increase of fuel economy lower than the rate-of-increase of fuel economy for the light truck fleet. As discussed in Section III below, this is primarily due to NHTSA's assessment that manufacturers have already made substantial progress in technology application to passenger cars, such that the possibility for further fuel economy improvements to Internal Combustion Engine- and hybrid-based vehicles is relatively limited, while there appears to be much more room to improve in the light truck fleet. This is consistent with NHTSA's obligation to set maximum feasible CAFE standards separately for passenger cars and light trucks (

see

49 U.S.C. 32902), which gives NHTSA discretion, by law, to set CAFE standards that increase at different rates for cars and trucks. Again, the reasons for this approach are discussed in Section III of this preamble. Section V of this preamble also discusses in greater detail how this approach carries out NHTSA's responsibility under EPCA to set maximum feasible standards for both passenger cars and light trucks.

Table I-1—Regulatory Alternatives Under Consideration for MYs 2027-2032 Passenger Car and Light Truck CAFE Standards

Name of

alternative

Passenger car

stringency

increases, year-over-year

(%)

Light truck stringency increases, year-over-year

(%)

No-Action Alternative

N/A

Alternative PC1LT3

Alternative PC2LT4 (Preferred Alternative)

Alternative PC3LT5

Alternative PC6LT8

Table I-2—Regulatory Alternatives Under Consideration for MYs 2030-2035 HDPUV Fuel Efficiency Standards

Name of alternative

HDPUV stringency increases, year-over-year

(%)

No-Action Alternative

N/A

Alternative HDPUV4

Alternative HDPUV10 (Preferred Alternative)

Alternative HDPUV14

NHTSA

is proposing to increase stringency at 2 percent per year for passenger cars and at 4 percent per year for light trucks, year over year from MY 2027 through MY 2032, and at 10 percent per year for HDPUVs, year over year from MY 2030 through MY 2035. The regulatory alternatives representing these proposals are called “PC2LT4” for passenger cars and light trucks, and “HDPUV10” for HDPUVs. NHTSA tentatively concludes that these levels are the maximum feasible for these MYs as discussed in more detail in Section V of this preamble. NHTSA is proposing standards that rise at a more rapid rate for light trucks than for passenger cars. As explained in more detail below, the agency believes that there is more room to improve the fuel economy of light trucks, in a cost-effective way, and that the benefits of requiring more improvement from light trucks will be significant given their high usage and the fact that they make up an ever-larger percentage of the overall fleet. Passenger cars, on the other hand, have been improving at a rapid rate for many years in succession, and the available improvements for that fleet are fewer, particularly given the statutory constraints that prevent NHTSA from considering the fuel economy of battery electric vehicles (BEVs) in determining maximum feasible CAFE standards.

NHTSA notes that due to the statutory constraints that prevent NHTSA from considering the fuel economy of dedicated alternative fueled vehicles, the full fuel economy of dual-fueled alternative fueled vehicles, and the availability of over-compliance credits when determining what standards are maximum feasible, many aspects of our analysis are different from what they would otherwise be without the statutory restrictions—in particular, the technologies chosen to model possible compliance options, the estimated costs, benefits, and achieved levels of fuel economy, as well as the current and projected adoption of alternative fueled vehicles. NHTSA evaluates the results of that constrained analysis by weighing the four enumerated statutory factors to determine which standards are maximum feasible.

Percentages in the table represent the year of year reduction in gal/mile applied to the mpg values on the target curves shown in Figure 1-1. The reduction in gal/mile results in an incrase mpg.

For HDPUVs, the different regulatory alternatives are also defined in terms of percent-increases in stringency from year to year, but in terms of fuel consumption reductions rather than fuel economy increases, so that increasing stringency appears to result in standards going

down

(representing a direct reduction in fuel consumed) over time rather than

up.

Also, unlike for the passenger car and light truck standards, because HDPUV standards are measured using a fuel consumption metric, year-over-year percent changes do actually represent gallon/mile differences across the work-factor range. Under each action alternative, the stringency changes at the same percentage rate in each model year in the rulemaking time frame.

49 U.S.C. 32902(h) states that when determining what levels of CAFE standards are maximum feasible, NHTSA “(1) may not consider the fuel economy of dedicated automobiles [including battery-electric vehicles]; (2) shall consider dual fueled automobiles to be operated only on gasoline or diesel fuel; and (3) may not consider, when prescribing a fuel economy standard, the trading, transferring, or availability of credits under section 32903.”

In this action, NHTSA is proposing six MYs of standards for each fleet. For passenger cars and light trucks, NHTSA notes that the final year of standards proposed, MY 2032, is “augural,” as in the 2012 final rule which established CAFE standards for MYs 2017 and beyond. Augural standards mean that they are NHTSA's best estimate of what the agency would propose, based on the information currently before it, if the

agency had authority to set CAFE standards for more than five MYs in one action. The augural standards do not, and will not, have any effect in themselves and will not be binding unless adopted in a subsequent rulemaking. Consistent with past practice, NHTSA is including augural standards for MY 2032 to give its best estimate of what those standards would be to provide as much predictability as possible to manufacturers and to be consistent with the time frame of the proposed Environmental Protection Agency (EPA) standards for greenhouse gas (GHG) emissions from motor vehicles. Due to statutory lead time constraints for HDPUV standards, NHTSA's proposal for HDPUV standards must begin with MY 2030. There is no restriction on the number of MYs for which NHTSA may set HDPUV standards, so none of the HDPUV standards are augural. NHTSA also requests comment on a scenario where the regulatory alternatives would extend only through MY 2032, which coincides with the time frame of the EPA proposed GHG standards for this vehicle segment.

NHTSA requests comment on the full range of standards encompassed between the No-Action Alternative and Alternative PC6LT8 for MYs 2027-2032 Passenger Cars, as well as comments on the range of standards encompassed for light trucks, and on the full range of standards encompassed between the No-Action Alternative and Alternative HDPUV14 for MYs 2030-2035 HDPUVs. NHTSA expressly asks for comment on combinations of standards that may not be explicitly identified in this proposal, including standards between the No-Action Alternative and PC1/LT3, as well as between PC3/LT5 and PC6/LT8. NHTSA also notes that passenger car and light truck stringency may move independently of one another, and that rates of increase may vary by model year.

The proposed CAFE standards remain vehicle-footprint-based, like the current CAFE standards in effect since MY 2011, and the proposed HDPUV standards remain work-factor-based, like the HDPUV standards established in the 2011 “Phase 1” rulemaking and continued to be used in 2016 “Phase 2” rulemaking. The footprint of a vehicle is the area calculated by multiplying the wheelbase times the track width, essentially the rectangular area of a vehicle measured from tire to tire where the tires hit the ground. The work factor (WF) of a vehicle is a unit established to measure payload, towing capability, and whether or not a vehicle has four-wheel drive. This means that the proposed standards are defined by mathematical equations that represent linear functions relating vehicle footprint to fuel economy targets for passenger cars and light trucks,

and relating WF to fuel consumption targets for HDPUVs.

Generally, passenger cars have more stringent targets than light trucks regardless of footprint, and smaller vehicles will have more stringent targets than larger vehicles, because smaller vehicles are generally more fuel efficient No individual vehicle or vehicle model need meet its target exactly, but a manufacturer's compliance is determined by how its average fleet fuel economy compares to the average fuel economy of the targets of the vehicles it manufactures.

The target curves for passenger cars, light trucks, and compression-ignition and spark-ignition HDPUVs are set forth below; curves for MYs prior to the years of the rulemaking time frame are included in the figures for context. NHTSA underscores that the equations and coefficients defining the curves are the CAFE and HDPUV standards, and not the mpg and gallon/100-mile estimates that the agency currently estimates could result from manufacturers complying with the proposed curves. We provide mpg and gallon/100-mile estimates for ease of understanding after we illustrate the footprint curves, but the equations and coefficients are the actual standards.

BILLING CODE 4910-59-P

EP17AU23.000

EP17AU23.001

EP17AU23.002

EP17AU23.003

BILLING CODE 4910-59-C

NHTSA is also proposing new minimum domestic passenger car CAFE standards (MDPCS) for MYs 2027-2032 as required by the Energy Policy and Conservation Act of 1975 (EPCA), as amended by the EISA, and applied to vehicles defined as manufactured in the United States. Section 32902(b)(4) of 49 U.S.C. requires NHTSA to project the minimum domestic standard when it promulgates passenger car standards for a MY, so the minimum standards are estimated as specific mpg values and will be finalized as specific mpg values when NHTSA sets final passenger car standards for MYs 2027-2032. NHTSA retains the 1.9 percent offset first used in the 2020 final rule, reflecting prior differences between passenger car footprints originally forecast by the agency and passenger car footprints as they occurred in the real world, such that the minimum domestic passenger car standard is as shown in the table below. NHTSA requests comment on this approach.

Table I-3—Proposed Minimum Domestic Passenger Car Standard With Offset

[mpg]

MY 2027

MY 2028

MY 2029

MY 2030

MY 2031

MY 2032

54.1

55.3

56.4

57.5

58.7

59.9

Recognizing that many readers think about CAFE standards in terms of the mpg values that the standards are projected to eventually require, NHTSA currently estimates that the proposed standards would require roughly 57.8 mpg in MY 2032, on an average industry fleet-wide basis, for passenger cars and light trucks. NHTSA notes both that real-world fuel economy is generally 20-30 percent lower than the estimated required CAFE level stated above,

and also that the actual CAFE standards are the footprint target curves for passenger cars and light trucks. This last note is important, because it means that the ultimate fleet-wide levels will vary depending on the mix of vehicles that industry produces for sale in those MYs. NHTSA also calculates and presents “estimated achieved” fuel economy levels, which differ somewhat from the estimated required levels for each fleet, for each year.

NHTSA estimates that the industry-wide average fuel economy achieved in MY 2032 for passenger cars and light trucks combined could increase from about 53.6 mpg under the No-Action Alternative to 57.6 mpg under the proposed standards.

CAFE compliance is evaluated per 49 U.S.C. 32904(c) Testing and Calculation Procedures, which states that the EPA Administrator (responsible under EPCA/EISA for measuring vehicle fuel economy) shall use the same procedures used for model year 1975 (weighted 55 percent urban cycle and 45 percent highway cycle) or comparable procedures. Colloquially, this is known as the 2-cycle test. The “real-world” or 5-cycle evaluation includes the 2-cycle tests, and three additional tests that are used to adjust the city and highway estimates to account for higher speeds, air conditioning use, and colder temperatures. In addition to calculating vehicle fuel economy, EPA is responsible for providing the fuel economy data that is used on the fuel economy label on all new cars and light trucks, which uses the “real-world” values. In 2006, EPA revised the test methods used to determine fuel economy estimates (city and highway) appearing on the fuel economy label of all new cars and light trucks sold in the U.S., effective with 2008 model year vehicles.

NHTSA's analysis reflects that manufacturers nearly universally make the technological improvements prompted by CAFE standards at times that coincide with existing product “refresh” and “redesign” cycles, rather than applying new technology every year regardless of those cycles. It is significantly more cost-effective to make fuel-economy-improving technology updates when a vehicle is being updated anyway. See TSD 2.2.1.7 for additional discussion about manfacturer refresh and redesign cycles.

There is no actual legal requirement for combined passenger car and light truck fleets, but NHTSA presents information this way in recognition of the fact that many readers will be accustomed to seeing such a value.

Table I-4—Estimated Required Average and Estimated Achieved Average of CAFE Levels

[mpg] for passenger cars and light trucks, preferred alternative PC2LT4

Fleet

MY 2027

MY 2028

MY 2029

MY 2030

MY 2031

MY 2032

Passenger Cars:

Estimated Required

60.0

61.2

62.5

63.7

65.1

66.4

Estimated Achieved

63.5

65.3

67.5

69.3

71.3

72.8

Light Trucks:

Estimated Required

44.4

46.2

48.2

50.2

52.2

54.4

Estimated Achieved

44.2

45.7

47.5

49.0

50.9

52.4

Combined:

Estimated Required

48.4

50.1

51.9

53.8

55.7

57.8

Estimated Achieved

49.0

50.5

52.3

54.0

56.0

57.6

To the extent that manufacturers appear to be over-complying in our analysis with required fuel economy levels in the passenger car fleet, NHTSA notes that this is due to the inclusion of several all-electric manufacturers in the baseline analysis, which affects the overall average achieved levels. Manufacturers with more traditional fleets do not over-comply at such high levels in our analysis, and our analysis considers the compliance paths for both manufacturer groups. In contrast, while it looks like manufacturers are falling short of required fuel economy levels in the light truck fleet (and choosing instead to pay civil penalties), NHTSA notes that this appears to be the result of a relatively small number of companies, which affects the overall average achieved levels. The agency's overall assessment is that the light truck standards are maximum feasible even though they may be challenging for some individual companies to achieve. Please see Section V.D of this preamble for more discussion on these topics and how the agency has considered them in determining maximum feasible standards for this proposal.

For HDPUVs, NHTSA currently projects that the standards would require, on an average industry fleet-wide basis for the HDPUV fleet, roughly 2.638 gallons per 100 miles

in MY 2035. HDPUV standards are attribute-based like passenger car and light truck standards, so here, too, ultimate fleet-wide levels will vary depending on what industry produces for sale.

The HDPUV standards measure compliance in direct fuel consumption and uses gallons consumed per 100 miles of operation as a metric.

See

49 CFR 535.6.

Table I-5—Estimated Required Average and Estimated Achieved Average of Fuel Efficiency Levels (

gal

/100 miles for HDPUVs, preferred alternative HDPUV10)

MY 2030

MY 2031

MY 2032

MY 2033

MY 2034

MY 2035

Estimated Required

4.427

4.051

3.646

3.255

2.930

2.638

Estimated Achieved

3.266

2.764

2.759

2.160

2.157

2.153

For all fleets, average requirements and average achieved CAFE and HDPUV fuel efficiency levels would ultimately depend on manufacturers' and consumers' responses to standards, technology developments, economic conditions, fuel prices, and other factors.

NHTSA recognizes that the 2022 rule for MYs 2024-2026 involved higher rates of increase based on our assessment at the time of what technologies were available for deployment in that fleet. Our technical analysis for this proposal keeps that same general framework as the 2022 final rule, but as applied to a more-recent fleet that includes the vehicles that will be subject to the 2024-2026 standards. Thus, since May 2022, NHTSA has updated technologies considered in our analysis (removing technologies which are already universal or nearly so and technologies which are exiting the fleet, adding certain advanced engine technologies;

) updated macroeconomic input assumptions, as with each round of rulemaking analysis; improved user control of various input parameters; updated our approach to modeling manufacturers' expected compliance with states' Zero Emission Vehicle (ZEV) programs; accounted for potential changes to DOE's Petroleum Equivalency Factor (PEF), which is proposed to be changed,

for the baseline assumptions; expanded accounting for Federal incentives such as Inflation Reduction Act programs; expanded procedures for estimating new vehicle sales and fleet shares; updated inputs for projecting aggregate light-duty Vehicle Miles Traveled (VMT); and added various output values and options.

See Draft TSD Chapter 1.1 for a complete list of technologies added or removed from the analysis.

For more information on DOE's proposal, see 88 FR 21525. For more information on how DOE's proposal affects NHTSA's results in this proposal, please see Chapter 9 of the PRIA.

See TSD Chapter 1.1 for a detailed discussion of analysis updates.

NHTSA tentatively concludes, as we explain in more detail below, that Alternative PC2LT4 is the maximum feasible alternative that manufacturers can achieve for MYs 2027-2032 passenger cars and light trucks, based on a variety of reasons. Energy conservation is still paramount, for the consumer benefits, energy security benefits, and environmental benefits that it provides. Moreover, although the vehicle fleet is undergoing a significant transformation now and in the coming years, for reasons other than the CAFE standards, NHTSA believes that a significant percentage of the on-road (and new) vehicle fleet may remain propelled by internal combustion engines (ICEs) through 2032. NHTSA believes that the alternative we are proposing will encourage manufacturers producing those ICE vehicles during the standard-setting time frame to achieve significant fuel economy, improve energy security, and reduce harmful pollution by a large amount. At the same time, NHTSA is proposing standards that our estimates suggest will continue to save consumers money and fuel over the lifetime of their vehicles, particularly light truck buyers, while being economically practicable and technologically feasible for manufacturers to achieve.

Although Alternatives PC3LT5 and PC6LT8 would conserve more energy and provide greater fuel savings benefits and certain pollutant emissions reductions, NHTSA's statutorily-constrained analysis currently estimates that those alternatives may not be achievable for many manufacturers in the rulemaking time frame. Additionally, compliance with those more stringent alternatives would impose significant costs on individual consumers without corresponding fuel savings benefits large enough to, on average, offset those costs. Within that framework, NHTSA's analysis suggests that the more stringent alternatives could push more technology application than would be economically practicable, given anticipated baseline activity that will already be consuming manufacturer resources and capital. In contrast to Alternatives PC3LT5 and PC6LT8, Alternative PC2LT4 comes at a cost we believe the market can bear without creating consumer acceptance or sales issues, appears to be much more achievable, and will still result in consumer net benefits on average. The proposed alternative also achieves large fuel savings benefits and significant reductions in emissions. NHTSA tentatively concludes Alternative PC2LT4 is the appropriate choice given this record.

For HDPUVs, NHTSA tentatively concludes, as explained in more detail below, that Alternative HDPUV10 is the maximum feasible alternative that manufacturers can achieve for MYs 2030-2035 HDPUVs. It has been seven years since NHTSA revisited HDPUV standards, and our analysis suggests that there is much opportunity for cost-effective improvements in this segment, broadly speaking. At the same time, we recognize that these vehicles are primarily used to conduct work for a large number of businesses. Although Alternative HDPUV14 would conserve more energy and provide greater fuel savings benefits and CO

emissions reductions, it is significantly more costly than HDPUV10, and NHTSA currently estimates that Alternative HDPUV10 is the most cost-effective under a variety of metrics and at either a 3 percent or a 7 percent DR, while still being appropriate and technologically feasible. NHTSA is allowed to consider electrification in determining maximum feasible standards for HDPUVs. As a result, NHTSA tentatively concludes that HDPUV10 is the appropriate choice given the record discussed in more detail below, and we believe it balances EPCA's overarching objective of energy conservation while remaining cost-effective and technologically feasible.

For passenger cars and light trucks, NHTSA estimates that this proposal would reduce average fuel outlays over the lifetimes of MY 2032 vehicles by about $1,043 per vehicle, while increasing the average cost of those vehicles by about $932 over the baseline, at a 3 percent DR. With climate benefits and all other benefits and costs discounted at 3 percent, when considering the entire CAFE fleet for MYs 1983-2032, NHTSA estimates $58.6 billion in monetized costs and $75.5 billion in monetized benefits attributable to the proposed standards, such that the present value of aggregate net monetized benefits to society would be $16.8 billion.

These values are from our “model year” analysis, reflecting the entire fleet from MYs 1983-2032, consistent with past practice. Model year and

calendar year perspectives are discussed in more detail below in this section.

For HDPUVs, NHTSA estimates that this proposal could reduce average fuel outlays over the lifetimes of MY 2038 vehicles by about $439 per vehicle, while increasing the average cost of those vehicles by about $131 over the baseline, at a 3 percent DR. With climate benefits and all other benefits and costs discounted at 3 percent, when considering the entire on-road HDPUV fleet for CYs 2022-2050, NHTSA estimates $2.1 billion in monetized costs and $4.3 billion in monetized benefits attributable to the proposed standards, such that the present value of aggregate net monetized benefits to society would be $2.2 billion.

These values are from our “calender year” analysis, reflecting the on-the-road fleet from CYs 2022-2050. Model year and calendar year perspectives are discussed in more detail below in this section.

These assessments do not include important unquantified effects, such as energy security benefits, equity and distributional effects, and certain air quality benefits from the reduction of toxic air pollutants and other emissions, among other things, so that the net benefit estimate is a conservative one.

In addition, the power sector emissions modeling reflected in this analysis does not incorporate the most up-to-date data on the future evolution of the power sector, and the emission projections are higher than analyses using more recent data indicate is likely to be the case. This modeling will be updated in the final rule.

These cost and benefit estimates are based on many different and uncertain inputs, and NHTSA has conducted several dozen sensitivity analyses varying individual inputs to evaluate the effect of that uncertainty. For example, while NHTSA's reference case analysis constrains the application of high compression ratio engines to some vehicles based on performance and other considerations, we also conducted a sensitivity analysis that removed all of those constraints. Results of this and other sensitivity analyses are discussed in Section IV.D of this preamble, in Chapter 9 of the PRIA, and (if large or otherwise significant) in Section V.D of this preamble.

Table I-6 presents aggregate benefits and costs for new vehicle buyers and for the average individual new vehicle buyer.

Table I-6—Benefits and Costs for the Light Duty (LD) and HDPUV Preferred Alternatives

[2021$, 3 percent annual DR, 3 percent SC-GHG DR]

PC2LT4

HDPUV10

Aggregate Buyer Benefits and Costs ($b):

Costs

43.3

1.4

Benefits

59.4

3.2

Net Benefits

16.1

1.7

Aggregate Societal Benefits and Costs (including buyer, $b):

Costs

58.6

2.1

Benefits

75.5

4.3

Net Benefits

16.8

2.2

Per-vehicle ($):

Regulatory Costs

932

131

Lifetime Fuel Savings

1,043

439

Notes:

Total buyer costs and benefits include those presented in more detail in Table V-6 and Table V-7. Societal costs and benefits include those presented in more detail in Table V-8 and Table V-9. Aggregate light-duty measures are computed for the lifetimes of the total light-duty fleet produced through MY 2032. Aggregate HDPUV measures are computed for the on-road HDPUV fleet for CYs 2022-2050. Per-vehicle costs are those for MY 2032 (LD) and MY 2038 (HDPUV).

NHTSA recognizes that EPA has recently issued a proposal to set new multi-pollutant emissions standards for MYs 2027 and later light-duty (LD) and medium-duty (MD) vehicles.

EPA describes its proposal as building upon EPA's final standards for Federal GHG emissions standards for passenger cars and light trucks for MYs 2023 through 2026 and leverages advances in clean car technology to unlock benefits to Americans ranging from reducing pollution, to improving public health, to saving drivers money through reduced fuel and maintenance costs.

EPA's proposed standards would phase in over MYs 2027 through 2032.

See Enviromental Protection Agency. 2023. Proposed Rule: Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles. Last revised: May 25, 2023. Available at:

https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-multi-pollutant-emissions-standards-model.

(Accessed: May 31, 2023).

Id.

NHTSA coordinated with EPA in developing our proposal to avoid inconsistencies and produce requirements that are consistent with NHTSA's statutory authority. The proposals nevertheless differ in important ways. First, NHTSA's proposal, consistent with its statutory authority and mandate under EPCA/EISA, focuses on improving vehicle fuel economy and not directly on reducing vehicle emissions—though reduced emissions are a follow-on effect of improved fuel economy. Second, the biggest difference between the two proposals is due to EPCA/EISA's statutory prohibition against NHTSA considering the fuel economy of dedicated alternative fueled vehicles, including BEVs, and including the full fuel economy of dual-fueled alternative fueled vehicles in determining the maximum feasible fuel economy level that manufacturers can achieve for passenger cars and light trucks, even though manufacturers may use BEVs and dual-fueled alternative fuel vehicles (AFV) to comply with CAFE standards. EPA is not prohibited from considering BEVs as a compliance option. EPA's proposal is informed by, among other considerations, trends in the automotive industry (including the proliferation of announced investments by automakers in electrifying their fleets), tax incentives under the Inflation Reduction Act (IRA), and other forces that are leading to a rapid transition in the automotive industry away from ICEs.

NHTSA, in contrast, may

not

consider BEVs as a compliance option for the passenger car and light truck fleets even though manufacturers may, in fact, use BEVs to comply with CAFE standards. This constraint means that not only are NHTSA's stringency rates of increase different from EPA's but also the shapes

of our standards are different based upon the different scopes.

Enviromental Protection Agency. 2023. Proposed Rule: Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles. EPA-420-F-23-009. Offce of Transportation and Air Quality. Available at:

https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-multi-pollutant-emissions-standards-model.

(Accessed: May 31, 2023).

Recognizing that the agencies are implementing statutory mandates to set maximum feasible fuel economy standards and to address dangerous air pollution, and that both standards affect the same fleet of vehicles, we seek comment on how best to optimize the effectiveness of NHTSA's standards consistent with the statutory factors. Our statutorily constrained simulated industry response shows a reasonable path forward to compliance with CAFE standards, but we want to stress that our analysis simply shows feasibility and does not dictate a required path to compliance. Because the standards are performance-based, manufacturers are always free to apply their expertise to find the appropriate technology path that best meets all desired outcomes. Indeed, as explained in greater detail later on in this proposal, it is entirely possible and reasonable that a vehicle manufacturer will use technology options to meet NHTSA's proposed standards that are significantly different from what NHTSA's analysis for this proposal suggests given the statutory constraints under which it operates. NHTSA will coordinate with EPA to ensure NHTSA's standards take account of statutory objectives and constraints while minimizing compliance costs. NHTSA seeks input to help inform these objectives.

As discussed before, NHTSA does not face the same statutory limitations in setting standards for HDPUVs as it does in setting standards for passenger cars and light trucks. This allows NHTSA to consider a broader array of technologies in setting maximum feasible standards for HDPUVs. However, we are still considerate of factors that allow these vehicles to maintain utility and do work for the consumer when we set the standards.

Additionally, NHTSA has considered and accounted for manufacturers' expected compliance with California's Advanced Clean Cars (ACC) and Advanced Clean Trucks (ACT) regulations in our analysis, as part of the analytical baseline.

We find that manufacturers will comply with ZEV requirements in California and a number of other states in the absence of CAFE standards, and accounting for that expected compliance allows us to present a more realistic picture of the state of fuel economy even in the absence of changes to the CAFE standards. Reflecting expected compliance with the ZEV mandates in the analysis improves the accuracy of the baseline in reflecting the state of the world without the revised CAFE standards, and thus the information available to decision-makers in their decision as to what standards are maximum feasible and to the public in commenting on those standards.

Specifically, we include the main provisions of the ACC I, ACC II, and ACT programs, as discussed further below in Section II.C.5.a.

A number of other improvements and updates have been made to the analysis since the 2022 final rule based on NHTSA analysis, new data, and stakeholder meetings for this NPRM. Table I-7 summarizes these, and they are discussed in much more detail below and in the documents accompanying this preamble.

Table I-7—Key Analytical Updates From the 2022 Final Rule

For a detailed list of updates to the CAFE Analysis please see Draft TSD Chapter 1.1.

Key Updates

• Update analysis fleet from MY2020 to MY2022.

• Addition of HDPUV, and required updates across entire model.

• Update technologies considered in the analysis.

○ Addition of HCRE, HCRD and updated Diesel technology models.

○ Removal of EFR,

DSLIAD,

manual transmissions, AT6L2, EPS,

IACC,

LDB,

SAX, and some P2 combinations.

Engine Friction Reduction.

Advanced Diesel Engine with Improvements and Advanced Cylinder Deactivation.

Electric Power Steering.

Improved Accessories.

Low-drag Brakes.

• User control of additional input parameters.

• Updated modeling approach to manufacturers' expected compliance with states' ZEV programs.

• Expanded accounting for Federal Incentives, such as the Inflation Reduction Act.

• Expanded procedures for estimating new vehicle sales and fleet shares.

• VMT coefficient updates.

• Additional output values and options.

NHTSA notes that while the current estimates of costs and benefits are important considerations and are directed by E.O. 12866, cost-benefit analysis provides only one informative data point in addition to the host of considerations that NHTSA must balance by statute when determining maximum feasible standards. Specifically, for passenger cars and light trucks, NHTSA is required to consider four statutory factors—technological feasibility, economic practicability, the effect of other motor vehicle standards of the Government on fuel economy, and the need of the United States to conserve energy. For HDPUVs, NHTSA is required to consider three statutory factors—whether standards are appropriate, cost-effective, and technologically reasonable—to determine whether the standards it adopts are maximum feasible.

As will be discussed further below, NHTSA tentatively concludes that Alternatives PC2LT4 and HDPUV10 are maximum feasible on the basis of these respective factors, and the cost-benefit analysis, while informative, is not one of the statutorily-required factors. NHTSA also considered several dozen sensitivity cases varying different inputs and concluded that even when varying inputs resulted in changes to net benefits or (on rare occasions) changed the relative order of regulatory alternatives in terms of their net benefits, those changes were not significant enough to outweigh our tentative conclusion that Alternatives PC2LT4 and HDPUV10 are maximum feasible.

49 U.S.C. 32902(k).

NHTSA further notes that CAFE and HDPUV standards apply only to new vehicles, meaning that the costs attributable to new standards are “front-loaded” because they result primarily from the application of fuel-saving technology to new vehicles. By contrast, the impact of new CAFE and HDPUV standards on fuel consumption and energy savings, air pollution, and GHGs—and the associated benefits to society—occur over an extended time, as drivers buy, use, and eventually scrap these new vehicles. By accounting for many MYs and extending well into the future to 2050, our analysis accounts for these differing patterns in impacts, benefits, and costs. Given the front-loaded costs versus longer-term benefits, it is likely that an analysis extending even further into the future would find additional net present benefits.

The bulk of our analysis for passenger cars and light trucks presents a “model year” (MY) perspective rather than a “calendar year” (CY) perspective. The MY perspective considers the lifetime impacts attributable to all passenger cars and light trucks produced prior to MY 2033, accounting for the operation of these vehicles over their entire lives (with some MY 2032 vehicles estimated to be in service as late as 2050). This approach emphasizes the role of the MYs for which new standards are being proposed, while accounting for the potential light truck that the proposed standards could induce some changes in

the operation of vehicles produced prior to MY 2027 (for passenger cars and light trucks), and that, for example, some individuals might choose to keep older vehicles in operation, rather than purchase new ones.

The CY perspective we present includes the annual impacts attributable to all vehicles estimated to be in service in each CY for which our analysis includes a representation of the entire registered passenger car, light truck, and HDPUV fleet. For this proposal, this CY perspective covers each of CYs 2022-2050, with differential impacts accruing as early as MY 2022.

Compared to the MY perspective, the CY perspective emphasizes MYs of vehicles produced in the longer term, beyond those MYs for which standards are currently being proposed.

For a presentation of effects by CY, please see Chapter 8.2.4.6 of the PRIA.

The tables below summarize estimates of selected impacts viewed from each of these two perspectives, for each of the regulatory alternatives considered in this proposal.

PRIA Chapter 1, Figure 1-1 provides a graphical comparison of energy sources and their relative change over the standard setting years.

The additional electricity use is attributed to an increase in the number of PHEVs; PHEV fuel economy is only considered in charge-sustaining (

i.e.,

gasoline-only) mode in the compliance analysis, but electricity consumption is computed for the effects analysis.

Total Gigawatt hours.

Climate benefits are based on reductions in CO

, CH

, and N

O emissions and are calculated using four different estimates of the social cost of each greenhouse gas (SC-GHG model average at 2.5 percent, 3 percent, and 5 percent DRs; 95th percentile at 3 percent DR), which each increase over time. For the presentational purposes of this table and other similar summary tables, we show the benefits associated with the average global SC-GHG at a 3 percent DR, but the agency does not have a single central SC-GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Section II.G.2 of this preamble for more information. Where percent DR values are reported in this table, the social benefits of avoided climate damages are discounted at 3 percent. The climate benefits are discounted at the same DR as used in the underlying SC-GHG values for internal consistency.

For this and similar tables in this section, net benefits may differ from benefits minus costs due to rounding.

Table I-8—Selected Cumulative Effects—Passenger Cars and Light Trucks—MY and CY Perspectives

PC1LT3

PC2LT4 (preferred alternative)

PC3LT5

PC6LT8

Avoided Gasoline Consumption (billion gallons)

MYs 1983-2032

−23

−30

−34

−47

CYs 2022-2050

−65

−88

−115

−207

Additional Electricity Consumption (TWh)

MYs 1983-2032

139

CYs 2022-2050

218

312

408

975

Reduced CO

Emissions (mmt)

MYs 1983-2032

−236

−301

−346

−482

CYs 2022-2050

−654

−885

−1,155

−2,011

Table I—9: Selected Cumulative Effects—HDPUVs—CY Perspective

HDPUV4

HDPUV10 (preferred alternative)

HDPUV14

Avoided Gasoline Consumption (billion gallons)

CYs 2022-2050

−0.1

−2.6

−11.8

Additional Electricity Consumption (TWh)

CYs 2022-2050

1.1

24.2

101.0

Reduced CO

Emissions (mmt)

CYs 2022-2050

−0.9

−22.3

−101.3

Table I-10—Estimated Monetized Costs and Benefits—Passenger Cars and Light Trucks—MY and CY Perspectives by Alternative and Social DR, 3% SC-GHG DR

PC1LT3

PC2LT4 (preferred alternative)

PC3LT5

PC6LT8

Monetized Benefits ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

MYs 1983-2032

120

CYs 2022-2050

150

203

119

261

152

437

252

Monetized Costs ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

MYs 1983-2032

105

CYs 2022-2050

116

157

240

130

386

206

Monetized Net Benefits ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

MYs 1983-2032

CYs 2022-2050

Table I-11—Estimated Monetized Costs and Benefits—HDPUVs—CY Perspective by Alternative and Social DR, 3% SC-GHG DR

HDPUV4

HDPUV10 (preferred alternative)

HDPUV14

Monetized Benefits ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

CYs 2022-2050

0.11

0.07

4.32

2.43

17.43

10.12

Monetized Costs ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

CYs 2022-2050

0.09

0.04

2.07

0.99

9.43

4.67

Monetized Net Benefits ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

CYs 2022-2050

0.03

2.25

1.44

8.00

5.45

Our net

benefit estimates are likely to be conservative both because (as discussed above) our analysis only extends to MY 2032 and CY 2050 (LD) and CY 2050 (HDPUV), and because there are additional important health, environmental, and energy security benefits that could not be fully quantified or monetized. Finally, for purposes of comparing the benefits and costs of proposed CAFE and HDPUV standards to the benefits and costs of other Federal regulations, policies, and programs under the Regulatory Right-to-Know Act,

we have computed “annualized” benefits and costs, as follows:

Climate benefits are based on reductions in CO

, CH

, and N

O emissions and are calculated using four different estimates of the social cost of each greenhouse gas (SC-GHG model average at 2.5 percent, 3 percent, and 5 percent DRs; 95th percentile at 3 percent DR), which each increase over time. For the presentational purposes of this table and other similar summary tables, we show the benefits associated with the average global SC-GHG at a 3 percent discount rate, but the agency does not have a single central SC-GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Section II.G.2 of this preamble for more information. Where percent DR values are reported in this table, the social benefits of avoided climate damages are discounted at 3 percent. The climate benefits are discounted at the same DR as used in the underlying SC-GHG values for internal consistency.

See

https://www.whitehouse.gov/omb/information-regulatory-affairs/reports/

for examples of how this reporting is used by the Federal Government.

Climate benefits are based on reductions in CO

, CH

, and N

O emissions and are calculated using four different estimates of the social cost of each greenhouse gas (SC-GHG model average at 2.5 percent, 3 percent, and 5 percent DRs; 95th percentile at 3 percent DR), which each increase over time. For the presentational purposes of this table and other similar summary tables, we show the benefits associated with the average global SC-GHG at a 3 percent discount rate, but the agency does not have a single central SC-GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Section II.G.2 of this preamble for more information. Where percent DR values are reported in this table, the social benefits of avoided climate damages are discounted at 3 percent. The climate benefits are discounted at the same DR as used in the underlying SC-GHG values for internal consistency.

For this and similar tables in this section, net benefits may differ from benefits minus costs due to rounding.

Table I-12—Estimated Annualized Monetized Costs and Benefits—Passenger Cars and Light Trucks—MY and CY Perspectives by Alternative and Social DR, 3% SC-GHG DR

PC1LT3

PC2LT4 (preferred alternative)

PC3LT5

PC6LT8

Monetized Benefits ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

MYs 1983-2032

2.3

2.7

2.9

3.4

4.7

5.4

CYs 2022-2050

7.8

7.2

10.6

9.7

13.6

12.4

22.8

20.6

Monetized Costs ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

MYs 1983-2032

1.8

2.3

2.8

3.1

3.8

4.1

5.1

CYs 2022-2050

6.1

5.3

8.2

7.1

12.5

10.6

20.1

16.8

Monetized Net Benefits ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

MYs 1983-2032

0.5

0.7

0.6

0.3

0.2

0.6

0.3

CYs 2022-2050

1.8

1.9

2.4

2.6

1.1

1.7

2.7

3.8

Table I-13—Estimated Annualized Monetized Costs and Benefits—HDPUVs by Alternative and Social DR, CY Perspective, 3% SC-GHG DR

HDPUV4

HDPUV10 (preferred alternative)

HDPUV14

Monetized Benefits ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

CYs 2022-2050

0.006

0.23

0.20

0.91

0.82

Monetized Costs ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

CYs 2022-2050

0.005

0.003

0.11

0.08

0.49

0.38

Monetized Net Benefits ($billion)

3% DR

7% DR

3% DR

7% DR

3% DR

7% DR

CYs 2022-2050

0.001

0.002

0.12

0.42

0.44

It is

also worth emphasizing that, although NHTSA is prohibited from considering the availability of certain flexibilities in making our determination about the levels of CAFE standards that would be maximum feasible, manufacturers have a variety of flexibilities available to aid their compliance. Section VI of this preamble summarizes these flexibilities. NHTSA is proposing changes to some of these flexibilities as shown in Table I-14 and Table I-15.

Climate benefits are based on reductions in CO

, CH

, and N

O emissions and are calculated using four different estimates of the social cost of each greenhouse gas (SC-GHG model average at 2.5 percent, 3 percent, and 5 percent DRs; 95th percentile at 3 percent DR), which each increase over time. For the presentational purposes of this table and other similar summary tables, we show the benefits associated with the average global SC-GHG at a 3 percent discount rate, but the agency does not have a single central SC-GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Section II.G.2 of this preamble for more information. Where percent DR values are reported in this table, the social benefits of avoided climate damages are discounted at 3 percent. The climate benefits are discounted at the same DR as used in the underlying SC-GHG values for internal consistency.

Table I-14—Overview of Compliance Flexibility Changes for CAFE Program (Vehicles With a Gross Vehicle Weight Rating (GVWR) of 8,500 lbs. or Less and Medium-Duty Passenger Vehicles (MDPVs) With a GVWR Between 8,501 and 10,000 lbs.)

Determining average fleet performance

Component

General description

Proposed changes in NPRM?

AC efficiency Fuel Consumption Improvement Value (FCIV)

This adjustment to the results from the 2-cycle testing accounts for fuel consumption improvement from technologies that improve AC efficiency that are not accounted for in the 2-cycle testing. The AC efficiency FCIV program began in MY 2017.

Yes: Proposed changes to 49 CFR 531.6 and 533.6 to eliminate AC efficiency FCIVs for BEVs starting in MY 2027.

Off-cycle FCIV

This adjustment to the results from the 2-cycle testing accounts for fuel consumption improvement from technologies that are not accounted for or not fully accounted for in the 2-cycle testing. The off-cycle FCIV program began in MY 2017.

Yes: Proposing changes to 49 CFR 531.6 and 533.6 to eliminate off-cycle menu FCIVs for BEVs and to eliminate the 5-cycle and alternative approvals starting in MY 2027. PHEVs retain benefits. Proposing a 60-day response deadline for requests for information regarding off-cycle requests for MY 2025-2026.

Advanced full-size pickup trucks FCIV

This adjustment increases a manufacturer's average fuel economy for hybridized and other performance-based technologies for MY 2017 and 2024.

No proposed changes. The program is set to sunset in MY 2024 and NHTSA is not proposing to extend it.

Docket ID NHTSA-2020-0079-0001.

Table I-15—Overview of Compliance for Heavy-Duty Fuel Efficiency Program for Pickup and Vans

[Vehicles with a GVWR between 8,500 and 14,000 lbs.]

Determining average fleet performance and certification flexibilities

Component

General description

Proposed changes in NPRM?

Advanced technology credit multiplier

In the 2016 Phase 2 Final Rule, EPA and NHTSA explained that manufacturers may increase advanced technology credits by a 3.5 multiplier for plug-in hybrid electric vehicles, 4.5 for all-electric vehicles, and 5.5 for fuel cell vehicles through My 2027

Yes: Proposed technical amendments to accurately reflect changes contemplated by 2016 final rule establishing requirements for Phase 2. The multiplier for advanced technology credits ends after MY 2027.

Innovative and off-cycle technology credits

Manufacturer may generate credits for vehicle or engine families or subconfigurations having fuel consumption reductions resulting from technologies not reflected in the Greenhouse Gas Emissions Model (GEM) simulation tool or in the FTP chassis dynamometer.

Yes: Proposed changes to eliminate innovative and off-cycle technology credits for heavy-duty pickup trucks and vans.

Credit Transfers

Manufacturers may transfer advanced technology credits across averaging sets.

Yes: Proposed technical amendment to reflect, as intended in the 2016 Phase 2 rule that advanced technology credits may not be transferred across averaging sets for Phase 2 and beyond.

The following sections of this preamble discuss the technical foundation for the agency's analysis, the regulatory alternatives considered in this proposal, the estimated effects of the regulatory alternatives, the basis for NHTSA's tentative conclusion that the proposed standards are maximum feasible, and NHTSA's approach to compliance and enforcement. The extensive record supporting NHTSA's tentative conclusion is documented in this preamble, in the Draft TSD, the PRIA, the Draft EIS, and the additional materials on NHTSA's website and in the rulemaking docket. NHTSA seeks comment on all aspects of this proposal.

II. Technical Foundation for NPRM Analysis

A. Why is NHTSA conducting this analysis?

When NHTSA proposes new regulations, it generally presents an analysis that estimates the impacts of those regulations, and the impacts of other regulatory alternatives. These analyses derive from statutes such as the Administrative Procedure Act (APA) and NEPA, from E.O.s (such as E.O. 12866 and 13563), and from other administrative guidance (

e.g.,

Office of Management and Budget (OMB) Circular A-4). For CAFE and HDPUV standards, the EPCA, as amended by the EISA, contains a variety of provisions that NHTSA seeks to account for analytically. Capturing all of these requirements analytically means that NHTSA presents an analysis that spans a meaningful range of regulatory alternatives, that quantifies a range of technological, economic, and environmental impacts, and that does so in a manner that accounts for EPCA/EISA's various express requirements for the CAFE and HDPUV programs (

e.g.,

passenger cars and light trucks must be regulated separately; the standard for each fleet must be set at the maximum feasible level in each MY; etc.).

NHTSA's proposed standards are thus supported by extensive analysis of potential impacts of the regulatory alternatives under consideration. Along with this preamble, a Draft TSD, a Preliminary Regulatory Impact Analysis (PRIA), and a Draft EIS, together provide a detailed enumeration of related methods, estimates, assumptions, and results. These additional analyses can be found in the rulemaking docket for this proposal

and on NHTSA's website.

Docket No. NHTSA-2023-0022, which can be accessed at

https://www.regulations.gov.

See National Highway Traffic Safety Administration. 2023. Corporate Average Fuel Economy. Available at:

https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy.

(Accessed: May 31, 2023).

This section provides further detail on the key features and components of NHTSA's analysis. It also describes how NHTSA's analysis has been constructed specifically to reflect governing law applicable to CAFE and HDPUV standards (which may vary between programs). Finally, the discussion reviews how NHTSA's analysis has been expanded and improved in response to comments received on the 2021 proposal,

as well as additional work conducted over the last year. Further improvements may be made in the future based on comments received to this proposal, on the 2021 National Academies of Sciences (NAS) Report,

and on other work generally previewed in these rulemaking documents. The analysis for this proposal aided NHTSA in implementing its statutory obligations, including the weighing of various considerations, by reasonably informing decision-makers about the estimated effects of choosing different regulatory alternatives.

86 FR 49602 (Sept. 3, 2021).

National Academies of Sciences, Engineering, and Medicine. 2021. Assessment of Technologies for Improving Light-Duty Vehicle Fuel Economy—2025-2035. Washington, DC. The National Academies Press. Available at:

https://nap.nationalacademies.org/catalog/26092/assessment-of-technologies-for-improving-light-duty-vehicle-fuel-economy-2025-2035

(Accessed: May 31, 2023) and for hard-copy review at DOT headquarters.

1. What are the key components of NHTSA's analysis?

NHTSA's analysis makes use of a range of data (

i.e.,

observations of things that have occurred), estimates (

i.e.,

things that may occur in the future), and models (

i.e.,

methods for making estimates). Two examples of

data

include (1) records of actual odometer readings used to estimate annual mileage accumulation at different vehicle ages and (2) CAFE compliance data used as the foundation for the “analysis fleets” containing, among other things, production volumes and fuel economy/fuel efficiency levels of specific configurations of specific vehicle models produced for sale in the U.S. Two examples of

estimates

include (1) forecasts of future Gross Domestic Product (GDP) growth used, with other estimates, to forecast future vehicle sales volumes and (2) technology cost estimates, which include estimates of the technologies' “direct cost,” marked up by a “retail price equivalent” (RPE) factor used to estimate the ultimate cost to consumers of a given fuel-saving technology, and an estimate of “cost learning effects” (

i.e.,

the tendency that it will cost a manufacturer less to apply a technology as the manufacturer gains more experience doing so).

NHTSA uses the CAFE Compliance and Effects Modeling System (usually shortened to the “CAFE Model”) to estimate manufacturers' potential responses to new CAFE, HDPUV, and GHG standards and to estimate various impacts of those responses. DOT's Volpe National Transportation Systems Center (often simply referred to as the “Volpe Center”) develops, maintains, and applies the model for NHTSA. NHTSA has used the CAFE Model to perform analyses supporting every CAFE rulemaking since 2001. The 2016 “Phase 2” rulemaking

establishing the most recent HDPUV standards also used the CAFE Model for analysis.

81 FR 73478 (October 25, 2016).

The basic design of the CAFE Model is as follows: The system first estimates how vehicle manufacturers might respond to a given regulatory scenario, and from that potential compliance solution, the system estimates what impact that response will have on fuel consumption, emissions, safety impacts, and economic externalities. In a highly summarized form, Figure II-1 shows the basic categories of CAFE Model procedures and the sequential flow between different stages of the modeling. The diagram does not present specific model inputs or outputs, as well as many specific procedures and model interactions. The model documentation accompanying this proposal presents these details, and Chapter 1 of the Draft TSD contains a more detailed version of this flow diagram for readers who are interested.

BILLING CODE 4910-59-P

EP17AU23.004

BILLING CODE 4910-59-C

More specifically, the model may be characterized as an integrated system of models. For example, one model estimates manufacturers' responses, another estimates resultant changes in total vehicle sales, and still another estimates resultant changes in fleet turnover (

i.e.,

scrappage). Additionally, and importantly, the model does not determine the form or stringency of the standards. Instead, the model applies inputs specifying the form and stringency of standards to be analyzed and produces outputs showing the impacts of manufacturers working to meet those standards, which become part of the basis for comparing different potential stringencies. A regulatory scenario, meanwhile, involves specification of the form, or shape, of the standards (

e.g.,

flat standards, or linear or logistic attribute-based standards), scope of passenger car, light truck, and HDPUV regulatory classes, and stringency of the CAFE or HDPUV standards for each MY to be analyzed. For example, a regulatory scenario may define CAFE or HDPUV standards for a particular class of vehicles that increase in stringency by a given percent per year for a given number of consecutive years.

Manufacturer compliance simulation and the ensuing effects estimation, collectively referred to as compliance modeling, encompass numerous subsidiary elements. Compliance simulation begins with a detailed user-provided initial forecast of the vehicle models offered for sale during the simulation period.

The compliance simulation then attempts to bring each manufacturer into compliance with the standards defined by the regulatory scenario contained within an input file developed by the user.

Because the CAFE Model is publicly available, anyone can develop their own initial forecast (or other inputs) for the model to use. The DOT-developed Market Data Input file that contains the forecast for this proposal is available on NHTSA's website at

https://www.nhtsa.gov/corporate-average-fuel-economy/cafe-compliance-and-effects-modeling-system.

With appropriate inputs, the model can also be used to estimate impacts of manufacturers' potential responses to new CO

standards and to California's ZEV program.

Estimating impacts involves calculating resultant changes in new vehicle costs, estimating a variety of costs (

e.g.,

for fuel) and effects (

e.g.,

emissions from fuel combustion) occurring as vehicles are driven over their lifetimes before eventually being scrapped, and estimating the monetary value of these effects. Estimating impacts also involves consideration of consumer responses—

e.g.,

the impact of vehicle fuel economy/efficiency, operating costs, and vehicle price on consumer demand for passenger cars, light trucks, and HDPUVs. Both basic analytical elements involve the

application of many analytical inputs. Many of these inputs are developed

outside

of the model and not

the model. For example, the model

applies

fuel prices; it does not

estimate

fuel prices.

NHTSA also uses EPA's Motor Vehicle Emission Simulator (MOVES) model to estimate “vehicle” or “downstream” emission factors (EF) for criteria pollutants,

and uses four Department of Energy (DOE) and DOE-sponsored models to develop inputs to the CAFE Model, including three developed and maintained by DOE's Argonne National Laboratory (ANL). The agency uses the DOE Energy Information Administration's (EIA's) National Energy Modeling System (NEMS) to estimate fuel prices,

and uses ANL's Greenhouse gases, Regulated Emissions, and Energy use in Transportation (GREET) model to estimate emissions rates from fuel production and distribution processes.

DOT also sponsored DOE/ANL to use ANL's Autonomie full-vehicle modeling and simulation system to estimate the fuel economy/efficiency impacts for over a million combinations of technologies and vehicle types.

The Draft TSD and PRIA describe details of our use of these models. In addition, as discussed in the Draft EIS accompanying this proposal, DOT relied on a range of climate models to estimate impacts on climate, air quality, and public health. The Draft EIS discusses and describes the use of these models.

See

https://www.epa.gov/moves.

This proposal uses version MOVES3 (the latest version at the time of analysis), available at

https://www.epa.gov/moves/latest-version-motor-vehicle-emission-simulator-moves.

See

https://www.eia.gov/outlooks/aeo/.

This proposal uses fuel prices estimated using the Annual Energy Outlook (AEO) 2022 version of NEMS (see

https://www.eia.gov/outlooks/aeo/tables_ref.php.

Information regarding GREET is available at

https://greet.es.anl.gov/.

This proposal uses the 2022 version of GREET.

As part of the ANL simulation effort, individual technology combinations simulated in Autonomie were paired with ANL's BatPaC model to estimate the battery cost associated with each technology combination based on characteristics of the simulated vehicle and its level of electrification. Information regarding ANL's BatPaC model is available at

https://www.anl.gov/cse/batpac-model-software.

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

https://www.gtisoft.com/gt-power/.

To prepare for analysis supporting this proposal, DOT has refined and expanded the CAFE Model through ongoing development. Examples of such changes, some informed by past external comment, made since 2022 include:

A more detailed list can be found in Chapter 1.1 of the Draft TSD.

• Addition of HDPUV, and associated required updates across entire model

• Updated technologies considered in the analysis

○ Addition of HCRE, HCRD and updated diesel technology models

See technologies descriptions in Draft TSD Chapter 3.

○ Removal of EFR, DSLIAD, manual transmissions, AT6L2, EPS, IACC, LDB, SAX, and some P2 combinations

See technologies description in 87 FR 25710 (May 2, 2022).

• User control of additional input parameters

• Updated modeling approach to manufacturers' expected compliance with states' ZEV programs

• Expanded accounting for Federal incentives, such as the IRA

• Expanded procedures for estimating new vehicle sales and fleet shares

• VMT coefficient updates

These changes reflect DOT's long-standing commitment to ongoing refinement of its approach to estimating the potential impacts of new CAFE and HDPUV standards. The Draft TSD elaborates on these changes to the CAFE Model, as well as changes to inputs to the model for this analysis.

NHTSA underscores that this analysis uses the CAFE Model in a manner that explicitly accounts for the fact that in producing a single fleet of vehicles for sale in the United States, manufacturers make decisions that consider the combination of CAFE/HDPUV standards, EPA GHG standards, and various policies set at sub-national levels (

e.g.,

ZEV sales mandates, set by California and adopted by many other states). These regulations have important structural and other differences that affect the strategy a manufacturer could pursue in designing a fleet that complies with each of the above. As explained, NHTSA's analysis reflects a number of statutory and regulatory requirements applicable to CAFE/HDPUV and EPA GHG standard-setting. As stated previously, NHTSA will coordinate with EPA to optimize the effectiveness of NHTSA's standards while minimizing compliance costs, informed by public comments from all stakeholders and consistent with the statutory factors. NHTSA seeks input to help inform these objectives.

2. How do requirements under EPCA/EISA shape NHTSA's analysis?

EPCA contains multiple requirements governing the scope and nature of CAFE standard setting. Some of these have been in place since EPCA was first signed into law in 1975, and some were added in 2007, when Congress passed EISA and amended EPCA. EISA also gave NHTSA authority to set standards for HDPUVs, and that authority was generally less constrained than for CAFE standards. NHTSA's modeling and analysis to inform standard setting is guided and shaped by these statutory requirements. EPCA/EISA requirements regarding the technical characteristics of CAFE and HDPUV standards and the analysis thereof include, but are not limited to, the following:

Corporate Average Standards:

Section 32902 of 49 U.S.C. requires standards for passenger cars, light trucks, and HDPUVs to be corporate average standards, applying to the average fuel economy/efficiency levels achieved by each corporation's fleets of vehicles produced for sale in the U.S.

The CAFE Model calculates the CAFE and CO

levels of each manufacturer's fleets based on estimated production volumes and characteristics, including fuel economy/efficiency levels, of distinct vehicle models that could be produced for sale in the U.S.

This differs from certain other types of vehicle standards, such as safety standards. For example, every vehicle produced for sale in the U.S. must, on its own, meet all applicable Federal motor vehicle safety standards (FMVSS), but no vehicle produced for sale must, on its own, meet Federal fuel economy or efficiency standards. Rather, each manufacturer is required to produce a mix of vehicles that, taken together, achieve an average fuel economy/efficiency level no less than the applicable minimum level.

Separate Standards for Passenger Cars, Light Trucks, and HDPUVs:

Section 32902 of 49 U.S.C. requires the Secretary of Transportation to set CAFE standards separately for passenger cars and light trucks and allows the Secretary to prescribe separate standards for different classes of heavy-duty (HD) vehicles like HDPUVs. The CAFE Model accounts separately for differentiated standards and compliance pathways for passenger cars, light trucks, and HDPUVs when it analyzes CAFE/HDPUV or GHG standards.

Attribute-Based Standards:

Section 32902 of 49 U.S.C. requires the Secretary of Transportation to define CAFE standards as mathematical functions expressed in terms of one or more vehicle attributes related to fuel economy, and NHTSA has extended this approach to HDPUV standards as well through regulation. This means that for

a given manufacturer's fleet of vehicles produced for sale in the U.S. in a given regulatory class and MY, the applicable minimum CAFE requirement (or maximum HDPUV fuel consumption requirement) is computed based on the applicable mathematical function, and the mix and attributes of vehicles in the manufacturer's fleet. The CAFE Model accounts for such functions and vehicle attributes explicitly.

Separately Defined Standards for Each Model Year:

Section 32902 of 49 U.S.C. requires the Secretary of Transportation (by delegation, NHTSA) to set CAFE standards (separately for passenger cars and light trucks)

at the maximum feasible levels in each MY. Fuel efficiency levels for HDPUVs must also be set at the maximum feasible level, in tranches of (at least) 3 MYs at a time. The CAFE Model represents each MY explicitly, and accounts for the production relationships between MYs.

Chaper 329 of title 49 of the U.S. Code uses the term “non-passenger automobiles,” while NHTSA uses the term “light trucks” in its CAFE regulations. The terms' meanings are identical.

For example, a new engine first applied to a given mode/configuration in MY 2027 will most likely persist in MY 2028 of that same vehicle model/configuration, in order to reflect the fact that manufacturers do not apply brand-new engines to a given vehicle model every single year. The CAFE Model is designed to account for these real-world factors.

Separate Compliance for Domestic and Imported Passenger Car Fleets:

Section 32904 of 49 U.S.C. requires the EPA Administrator to determine CAFE compliance separately for each manufacturer's fleets of domestic passenger cars and imported passenger cars, which manufacturers must consider as they decide how to improve the fuel economy of their passenger car fleets.

The CAFE Model accounts explicitly for this requirement when simulating manufacturers' potential responses to CAFE standards, and combines any given manufacturer's domestic and imported cars into a single fleet when simulating that manufacturer's potential response to GHG standards (because EPA does not have separate standards for domestic and imported passenger cars).

There is no such requirement for light trucks or HDPUVs.

Minimum CAFE Standards for Domestic Passenger Car Fleets:

Section 32902 of 49 U.S.C. requires that domestic passenger car fleets meet a minimum standard, which is calculated as 92 percent of the industry-wide average level required under the applicable attribute-based CAFE standard, as projected by the Secretary at the time the standard is promulgated. The CAFE Model accounts explicitly for this requirement when simulating manufacturer compliance with CAFE standards and sets this requirement aside when simulating manufacturer compliance with GHG standards.

Civil Penalties for Noncompliance:

Section 32912 of 49 U.S.C. (and implementing regulations) prescribes a rate (in dollars per tenth of a mpg) at which the Secretary is to levy civil penalties if a manufacturer fails to comply with a passenger car or light truck CAFE standard for a given fleet in a given MY, after considering available credits. Some manufacturers have historically demonstrated a willingness to pay civil penalties rather than achieving full numerical compliance across all fleets. The CAFE Model calculates civil penalties (adjusted for inflation) for CAFE shortfalls and provides means to estimate that a manufacturer might stop adding fuel-saving technologies once continuing to do so would effectively be more “expensive” (after accounting for fuel prices and buyers' willingness to pay for fuel economy) than paying civil penalties. The CAFE Model does not allow civil penalty payment as an option for EPA's GHG standards or NHTSA's HDPUV standards.

While civil penalties are an option in the HDPUV fleet, the penalties for noncompliance are significantly higher, and thus manufactures will try to avoid paying them. Setting the model to disallow civil penalties acts to best simulate this behavior. If the model does find no option other than “paying a civil penalty” in the HDPUV fleet, this cost should be considered a proxy for credit purchase. NHTSA seeks comment on whether and how to model civil penalties for HDPUVs for the final rule.

Dual-Fueled and Dedicated Alternative Fuel Vehicles:

For purposes of calculating passenger car and light truck CAFE levels used to determine compliance, 49 U.S.C. 32905 and 32906 specify methods for calculating the fuel economy levels of vehicles operating on alternative fuels to gasoline or diesel, such as electricity. In some cases, after MY 2020, methods for calculating AFV fuel economy are governed by regulation. The CAFE Model is able to account for these requirements explicitly for each vehicle model. However, 49 U.S.C. 32902 prohibits consideration of the fuel economy of dedicated AFVs, and requires that dual-fueled AFVs' fuel economy, such as plug-in electric vehicle (EVs), be calculated as though they ran only on gasoline or diesel, when NHTSA determines the maximum feasible fuel economy level that manufacturers can achieve in a given year for which NHTSA is establishing CAFE standards. The CAFE Model therefore has an option to be run in a manner that excludes the additional application of dedicated AFVs and counts only the gasoline fuel economy of dual-fueled AFVs, in MYs for which maximum feasible standards are under consideration. As allowed under NEPA for analysis appearing in Environmental Impact Statements (EIS) that help inform decision makers about the environmental impacts of CAFE standards, the CAFE Model can also be run without this analytical constraint. The CAFE Model does account for dedicated and dual-fueled AFVs when simulating manufacturers' potential responses to EPA's GHG standards because the Clean Air Act (CAA), under which the EPA derives its authority to set GHG standards for motor vehicles, contains no restrictions in using AFVs for compliance. There are no specific statutory directions in EISA with regard to dedicated and dual-fueled AFV fuel efficiency for HDPUVs, so the CAFE Model reflects relevant regulatory provisions by calculating fuel consumption directly per 49 U.S.C. 32905 and 32906 specified methods.

ZEV Mandates:

The CAFE Model can simulate manufacturers' compliance with state-level ZEV mandates applicable in California and “Section 177”

states. This approach involves identifying specific vehicle model/configurations that could be replaced with BEVs and converting to BEVs only enough vehicle models to meet the manufacturer's compliance obligations under state-level ZEV mandates, before beginning to consider the potential that other technologies could be applied toward compliance with CAFE, HDPUV, or GHG standards.

The term “Section 177” states refers to states which have elected to adopt California's standards in lieu of Federal requirements, as allowed under section 177 of the CAA.

Creation and Use of Compliance Credits:

Section 32903 of 49 U.S.C. provides that manufacturers may earn CAFE “credits” by achieving a CAFE level beyond that required of a given passenger car or light truck fleet in a given MY and specifies how these credits may be used to offset the amount by which a different fleet falls short of its corresponding requirement. These provisions allow credits to be “carried forward” and “carried back” between MYs, transferred between regulated classes (domestic passenger cars, imported passenger cars, and light trucks), and traded between manufacturers. However, credit use for passenger car and light truck compliance is also subject to specific statutory limits. For example, CAFE compliance credits can be carried

forward a maximum of five MYs and carried back a maximum of three MYs. Also, EPCA/EISA caps the amount of credits that can be transferred between passenger car and light truck fleets and prohibits manufacturers from applying traded or transferred credits to offset a failure to achieve the applicable minimum standard for domestic passenger cars. The CAFE Model can simulate manufacturers' potential use of CAFE credits carried forward from prior MYs or transferred from other fleets.

Section 32902 of 49 U.S.C. prohibits consideration of manufacturers' potential application of CAFE compliance credits when determining the maximum feasible fuel economy level that manufacturers can achieve for their fleets of passenger cars and light trucks. The CAFE Model can be operated in a manner that excludes the application of CAFE credits for a given MY under consideration for standard setting, and NHTSA operated the model with that constraint for the purpose of determining the appropriate CAFE standard for passenger cars and light trucks. No such statutory restrictions exist for setting HDPUV standards. For modeling EPA's GHG standards, the CAFE Model does not limit transfers because the CAA does not limit them. Insofar as the CAFE Model can be exercised in a manner that simulates trading of GHG compliance credits, such simulations treat trading as unlimited.

The CAFE Model does not explicitly simulate the potential that manufacturers would carry CAFE or GHG credits back (

i.e.,

borrow) from future model years, or acquire and use CAFE compliance credits from other manufacturers. At the same time, because EPA has elected not to limit credit trading, the CAFE Model can be exercised (for purposes of evaluating GHG standards) in a manner that simulates unlimited (a.k.a. “perfect”) GHG compliance credit trading throughout the industry (or, potentially, within discrete trading “blocs”). For purposes of analyzing CAFE standards, NHTSA believes it is challenging to predict precisely how manufacturers may choose to use these particular flexibilities in the future: for example, while it is reasonably foreseeable that a manufacturer who over-complies in one year may “coast” through several subsequent years relying on that over-compliance rather than making further technology improvements, it is harder to know whether manufacturers will rely on future technology investments to offset prior-year shortfalls, or whether/how manufacturers will trade credits with market competitors rather than making their own technology investments. Historically, carry-back and trading have been much less utilized than carry-forward, for a variety of reasons including higher risk and preference not to `pay competitors to make fuel economy improvements we should be making' (to paraphrase one manufacturer), although NHTSA recognizes that carry-back and trading are used more frequently when standards increase in stringency more rapidly. Given these dynamics, and given also the fact that the agency has yet to resolve some of the analytical challenges associated with simulating use of these flexibilities, the agency has decided to support this proposal with a conservative analysis that sets aside the potential that manufactures would depend widely on borrowing and trading—not to mention that, for purposes of determining maximum feasible CAFE standards, statute prohibits NHTSA from considering the trading, transferring, or availability of credits (

see

49 U.S.C. 32902(h)). While compliance costs in real life may be somewhat different from what is modeled in the rulemaking record as a result of this decision, that is broadly true no matter what, and the agency does not believe that the difference would be so great that it would change the policy outcome. Furthermore, a manufacturer employing a trading strategy would presumably do so because it represents a lower-cost compliance option. Thus, the estimates derived from this modeling approach are likely to be conservative in this respect, with real-world compliance costs likely being lower.

To avoid making judgments about possible future trading activity, the model simulates trading by combining all manufacturers into a single entity, so that the most cost-effective choices are made for the fleet as a whole.

Statutory Basis for Stringency:

Section 32902 of 49 U.S.C. requires the Secretary of Transportation (by delegation, NHTSA) to set CAFE standards for passenger cars and light trucks at the maximum feasible levels that manufacturers can achieve in a given MY, considering technological feasibility, economic practicability, the need of the United States to conserve energy, and the impact of other motor vehicle standards of the Government on fuel economy. For HDPUV standards, which must also achieve the maximum feasible improvement, the similar yet distinct factors of appropriateness, cost-effectiveness, and technological feasibility must be considered. EPCA/EISA authorizes the Secretary of Transportation (by delegation, NHTSA) to interpret these factors, and as the Department's interpretation has evolved, NHTSA has continued to expand and refine its qualitative and quantitative analysis to account for these statutory factors. For example, one of the ways that economic practicability considerations are incorporated into the analysis is through the technology effectiveness determinations: the Autonomie simulations reflect the agency's judgment that it would not be economically practicable (nor, for HDPUVs, appropriate) for a manufacturer to “split” an engine shared among many vehicle model/configurations into myriad versions each optimized to a single vehicle model/configuration.

National Environmental Policy Act:

NEPA requires NHTSA to consider the environmental impacts of its actions in its decision-making processes, including for CAFE standards. The Draft EIS accompanying this proposal documents changes in emission inventories as estimated using the CAFE Model, but also documents corresponding estimates—based on the application of other models documented in the Draft EIS—of impacts on the global climate, on air quality, and on human health.

Other Aspects of Compliance:

Beyond these statutory requirements applicable to DOT, EPA, or both are a number of specific technical characteristics of CAFE, HDPUV, and/or GHG regulations that are also relevant to the construction of this analysis, like the “off-cycle” technologies fuel economy/emissions improvements that apply for both CAFE and GHG compliance. Although too little information is available to account for these provisions explicitly in the same way that NHTSA has accounted for other technologies, the CAFE Model includes and makes use of inputs reflecting NHTSA's expectations regarding the extent to which manufacturers may earn such credits, along with estimates of corresponding costs. Similarly, the CAFE Model includes and makes use of inputs regarding credits EPA has elected to allow manufacturers to earn toward GHG levels (not CAFE or HDPUV) based on the use of air conditioner refrigerants with lower global warming potential, or on the application of technologies to reduce refrigerant leakage. In addition, the CAFE Model accounts for EPA “multipliers” for certain AFVs, based on current regulatory provisions or on alternative approaches. Although these are examples of regulatory provisions that arise from the exercise of discretion rather than specific statutory mandate, they can materially impact outcomes.

3. What updated assumptions does the current model reflect as compared to the 2022 final rule?

Besides the updates to the CAFE Model described above, any analysis of regulatory actions that will be implemented several years in the future, and whose benefits and costs accrue over decades, requires a large number of assumptions. Over such time horizons, many, if not most, of the relevant assumptions in such an analysis are inevitably uncertain. Each successive CAFE analysis seeks to update assumptions to better reflect the current state of the world and the best current estimates of future conditions.

A number of assumptions have been updated since the 2022 final rule. As discussed below, NHTSA has updated its “analysis fleet” from a MY 2020 reference to a MY 2022 reference for passenger cars and light trucks and has built an updated HDPUV analysis fleet (the last HDPUV analysis fleet was built in 2016). NHTSA has also updated estimates of manufacturers' compliance credit “holdings,” updated fuel price projections to reflect the U.S. EIA's 2022 Annual Energy Outlook (AEO), updated

projections of GDP and related macroeconomic measures, and updated projections of future highway travel. While NHTSA would have made these updates as a matter of course, we note that the ongoing global economic recovery and the ongoing war in Ukraine have impacted major analytical inputs such as fuel prices, GDP, vehicle production and sales, and highway travel. Many inputs remain uncertain, and NHTSA has conducted sensitivity analyses around many inputs to attempt to capture some of that uncertainty. These and other updated analytical inputs are discussed in detail in the Draft TSD and PRIA.

Additionally, E.O. 13990 required the formation of an Interagency Working Group (IWG) on the Social Cost (SC) of GHGs and charged this body with updating estimates of the SCs of carbon, nitrous oxide, and methane (CH

). As discussed in the TSD, NHTSA has followed DOT's determination that the values developed in the IWG's interim guidance are the most consistent with the best available science and economics and are the most appropriate estimates to use in the analysis of this proposal. Those estimates of costs per ton of emissions (or benefits per ton of emissions reductions) are considerably greater than those applied in the analysis supporting the 2020 final rule. Even still, the estimates NHTSA is now using are not able to fully quantify and monetize a number of important categories of climate damages; because of those omitted damages and other methodological limits, DOT believes its values for SC-GHG are conservative underestimates.

B. What is NHTSA analyzing?

NHTSA is analyzing the effects of different potential CAFE and HDPUV standards on industry, consumers, society, and the world at large. These different potential standards are identified as regulatory alternatives, and amongst the regulatory alternatives, NHTSA identifies which ones the agency is proposing. As in the past several CAFE rulemakings and in the Phase 2 HDPUV rulemaking, NHTSA is proposing to establish attribute-based CAFE and HDPUV standards defined by a mathematical function of vehicle footprint (which has an observable correlation with fuel economy) and a towing-and-hauling-based WF respectively.

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.

The statute gives NHTSA discretion as to how to structure standards for HDPUVs, and NHTSA continues to believe that attribute-based standards expressed as a mathematical function remain appropriate for those vehicles as well, given their similarity in many ways to light trucks. Thus, the proposed standards (and the regulatory alternatives) for passenger cars and light trucks take the form of fuel economy targets expressed as functions of vehicle footprint (the product of vehicle wheelbase and average track width) that are separate for passenger cars and light trucks, and the proposed standards and alternatives for HDPUVs take the form of fuel consumption targets expressed as functions of vehicle WF (which is in turn a function of towing and hauling capabilities).

Vehicle footprint is the vehicle's wheelbase times average track width (or more simply, the length and width beween the vehicle's four wheels). The HDPUV FE towing-and-hauling-based “WF” metric is based on a vehicle's payload and towing capabilities, with an added adjustment for 4-wheel drive vehicles.

49 U.S.C. 32902(a)(3)(A).

For passenger cars and light trucks, under the footprint-based standards, the function defines a fuel economy performance target for each unique footprint combination within a car or truck model type. Using the functions, each manufacturer thus will have a CAFE average standard for each year that is almost certainly unique to each of its fleets,

based upon the footprint and production volumes of the vehicle models produced by that manufacturer. A manufacturer will have separate footprint-based standards for cars and for trucks, consistent with 49 U.S.C. 32902(b)'s direction that NHTSA must set separate standards for cars and for trucks. The functions are mostly sloped, so that generally, larger vehicles (

i.e.,

vehicles with larger footprints) will be subject to lower mpg targets than smaller vehicles. This is because smaller vehicles are generally more capable of achieving higher levels of fuel economy, mostly because they tend not to have to work as hard (and therefore to require as much energy) to perform their driving task. Although a manufacturer's fleet average standard could be estimated throughout the MY based on the projected production volume of its vehicle fleet (and are estimated as part of EPA's certification process), the standards with which the manufacturer must comply are determined by its final model year (FMY) production figures. A manufacturer's calculation of its fleet average standards, as well as its fleets' average performance at the end of the MY, will thus be based on the production-weighted average target and performance of each model in its fleet.

EPCA/EISA requires NHTSA and EPA to separate passenger cars into domestic and import passenger car fleets for CAFE compliance purposes (49 U.S.C. 32904(b)), whereas EPA combines all passenger cars into one fleet for GHG compliance purposes.

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 proposing to define fuel economy targets as shown in Equation II-1.

BILLING CODE 4910-59-P

EP17AU23.005

Where:

TARGET

is the fuel economy target (in mpg) applicable to a specific vehicle model type with a unique footprint combination,

is a minimum fuel economy target (in mpg),

is a maximum fuel economy target (in mpg),

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

is an intercept (in gpm) of the same line.

Here,

MIN

and

MAX

are functions that take the minimum and maximum values, respectively, of the set of included values. For example,

MIN

[40, 35] = 35 and

MAX

(40, 25) = 40, such that

MIN

[

MAX

(40, 25), 35] = 35.

For the Preferred Alternative, this equation is represented graphically as the curves in Figure II-2.

EP17AU23.006

For light trucks, also consistent with prior rulemakings, NHTSA is proposing to define fuel economy targets as shown in Equation II-2.

EP17AU23.007

Where:

TARGET

is the fuel economy target (in mpg) applicable to a specific vehicle model type with a unique footprint combination,

a, b,

and

are as for passenger cars, but taking values specific to light trucks,

is a second minimum fuel economy target (in mpg),

is a second maximum fuel economy target (in mpg),

is the slope (in gpm per square foot) of a second line relating fuel consumption (the inverse of fuel economy) to footprint, and

is an intercept (in gpm) of the same second line.

For the Preferred Alternative, this equation is represented graphically as the curves in Figure II-3.

EP17AU23.008

Although the general model of the target function equation is the same for passenger cars and light trucks, and the same for each MY, the parameters of the function equation differ for cars and trucks. The actual parameters for both the Preferred Alternative and the other regulatory alternatives are presented in Section III.

The required CAFE level applicable to a passenger car (either domestic or import) or light truck fleet in a given MY is determined by calculating the production-weighted harmonic average of fuel economy targets applicable to specific vehicle model configurations in the fleet, as shown in Equation II-3.

EP17AU23.009

Where:

CAFE

required

is the CAFE level the fleet is required to achieve,

refers to specific vehicle model/configurations in the fleet,

PRODUCTION

is the number of model configuration

produced for sale in the U.S., and

TARGET

FE, i

is the fuel economy target (as defined above) for model configuration

For HDPUVs, NHTSA has previously set attribute-based standards, but used a work-based metric as the attribute rather than footprint. Work-based measurements such as payload and towing capability are key among the parameters that characterize differences in the design of these vehicles, as well as differences in how the vehicles will be used. Since NHTSA has been regulating HDPUVs, these standards have been based on a WF attribute that combines the vehicle's payload and towing capabilities, with an added adjustment for 4-wheel drive vehicles. Again, while NHTSA is not required by statute to set HDPUV standards that are attribute-based and that are described by a mathematical function, NHTSA continues to believe that doing so is reasonable and appropriate for this segment of vehicles, consistent with prior HDPUV standard-setting rulemakings. NHTSA proposes to continue using the work-based attribute and gradually increasing stringency (which for HDPUVs means that standards appear to

decline,

as compared to passenger car and light truck standards where increasing stringency means that standards appear to

increase.

This is because HDPUV standards are based on fuel

consumption,

which is the inverse of fuel

economy,

the metric that NHTSA

is statutorily required to use when setting standards for light-duty vehicle (LDV) fuel use). NHTSA proposes to define HDPUV fuel efficiency targets as shown in Equation II-4.

For additional information, see the National Academies of Sciences, Engineering, and Medicine. 2011. Assessment of Fuel Economy Technologies for Light-Duty Vehicles. Washington, DC. The National Academies Press. Available at:

https://nap.nationalacademies.org/catalog/12924/assessment-of-fuel-economy-technologies-for-light-duty-vehicles.

(Accessed: May 31, 2023). Fuel economy is a measure of how far a vehicle will travel with a gallon (or unit) of fuel and is expressed

in mpg. Fuel consumption is the inverse of fuel economy. It is the amount of fuel consumed in driving a given distance. Fuel consumption is a fundamental engineering measure that is directly related to fuel consumed per 100 miles and is useful because it can be employed as a direct measure of volumetric fuel savings.

EP17AU23.010

Where:

= Work Factor = [0.75 × (

Payload Capacity

Xwd

)] + [0.25 ×

Towing Capacity

]

Where:

Xwd

= 4wd adjustment = 500 lbs. if the vehicle group is equipped with 4WD and all-wheel drive, otherwise equals 0 lbs. for 2wd

Payload Capacity

= GVWR (lbs.) − Curb Weight (lbs.) (for each vehicle group)

Towing Capacity

= GCWR

(lbs.) − GVWR (lbs.) (for each vehicle group)

Gross Combined Weight Rating.

For the Preferred Alternative, this equation is represented graphically as the curves in Figure II-4 and Figure II-5.

EP17AU23.011

EP17AU23.012

Similar to the standards for passenger cars and light trucks, NHTSA (and EPA) have historically set HDPUV standards such that each manufacturer's fleet average standard is based on production volume-weighting of target standards for all vehicles, which are based on each vehicle's WF as explained above. Thus, for HDPUVs, the required fuel efficiency level applicable in a given MY is determined by calculating the production-weighted harmonic average of subconfiguration targets applicable to specific vehicle model configurations in the fleet, as shown in Equation II-5.

EP17AU23.013

BILLING CODE 4910-59-C

Where:

Subconfiguration Target Standard

= fuel consumption standard for each group of vehicles with the same payload, towing capacity, and drive configuration (gallons per 100 miles), and

Volume

= production volume of each unique subconfiguration of a model type based upon payload, towing capacity, and drive configuration.

Chapter 1 of the Draft TSD contains a detailed description of the use of attribute-based standards, generally, for passenger cars, light trucks, and HDPUVs, and explains the specific decision, in past rules and for the current proposal, to continue to use vehicle footprint as the attribute over which to vary passenger car and light truck stringency, and WF as the attribute over which to vary HDPUV stringency. That chapter also discusses the policy and approach in selecting the specific mathematical functions. NHTSA refers readers to the Draft TSD for a full discussion of these topics and seeks comment on that discussion.

C. What inputs does the compliance analysis require?

The first step in our analysis of the effects of different levels of fuel economy standards is the compliance simulation. When we say, “compliance simulation” throughout this rulemaking, we mean the CAFE Model's simulation of how vehicle manufacturers could comply with different levels of CAFE standards by adding fuel-economy-improving technology to an existing fleet of vehicles.

At the most basic level, a model is a set of equations, algorithms,

or other calculations that are used to make predictions about a

complex system, such as the environmental impact of a particular industry or activity. A model may consider various inputs, such as emissions data, technology costs, or other relevant factors, and use those inputs to generate output predictions.

When we use the phase “the model” throughout this section, we are referring to the CAFE Model. Any other model will be specifically named.

See Merriam-websiter, “algorithm.” Broadly, an algorithm is a step-by-step procedure for solving a problem or accomplishing some end. More specifically, an algorithm is a procedure for solving a mathematical problem (as of finding the greatest common divisor) in a finite number of steps that frequently involves repetition of an operation.

One important note about models is that a model is only as good as the data and assumptions that go into it. We attempt to ensure that the technology inputs and assumptions that go into the CAFE Model to project the effects of different levels of CAFE standards are based on sound science and reliable data, and that our reasons for using those inputs and assumptions are transparent and understandable to stakeholders. This section and the following section discuss at a high level how we generate the technology inputs and assumptions that the CAFE Model uses for the compliance simulation.

The Draft Technical Support Document, CAFE Model Documentation, CAFE Analysis Autonomie Model Documentation,

and other technical reports supporting this proposal discuss our technology inputs and assumptions in more detail.

As explained throughout this section, our inputs are a specific number or datapoint used by the model, and our assumptions are based on judgment after careful consideration of available evidence. An assumption can be an underlying reason for the

use

of a specific datapoint, function, or modeling process. For example, an input might be the fuel economy value of the Ford Mustang, whereas the assumption is that the Ford Mustang's fuel economy value reported in Ford's CAFE compliance data should be used in our modeling.

The ANL report is titled “Vehicle Simulation Process to Support the Analysis for MY 2027 and Beyond CAFE and MY 2030 and Beyond HDPUV FE Standards;” however, for ease of use and consistency with the Draft TSD, it is referred to as “CAFE Analysis Autonomie Documentation.”

We incorporate technology inputs and assumptions either directly in the CAFE Model or in the CAFE Model's various input files. The heart of the CAFE Model's decisions about how to apply technologies to manufacturer's vehicles to project how the manufacturer could meet CAFE standards is the compliance simulation algorithm. The compliance simulation algorithm is several equations that direct the model to apply fuel economy improving technologies to vehicles in a way that estimates how manufacturers might apply those technologies to their vehicles in the real world. The compliance simulation algorithm projects a cost-effective pathway for manufacturers to comply with different levels of CAFE standards, considering the technology present on manufacturer's vehicles now, and what technology could be applied to their vehicles in the future. Embedded directly in the CAFE Model is the universe of technology options that the model can consider and some rules about the order in which it can consider those options and estimates of how effective fuel economy improving technology is on different types of vehicles, like on a sedan or a pickup truck.

Technology inputs and assumptions are also located in all four of the CAFE Model's input files. The Market Data Input file is a Microsoft Excel file that characterizes the baseline automotive fleet used as the starting point for the analysis. There is one Excel row describing each vehicle model and model configuration manufactured in the United States in a MY (or years), and input and assumption data that links that vehicle to technology, economic, environmental, and safety effects. Next, the Technologies Input File identifies approximately six dozen technologies we use in the analysis, uses phase-in caps to identify when and how widely each technology can be applied to specific types of vehicles, provides most of the technology costs (only battery costs for electrified vehicles are provided in a separate file), and provides some of the inputs involved in estimating impacts on vehicle fuel consumption and weight. The Scenarios Input File provides the coefficient values defining the standards for each regulatory alternative,

and other relevant information applicable to modeling each regulatory scenario. This information includes, for example, the estimated value of select tax credits from the IRA, which provide Federal technology incentives for electrified vehicles, and the PEF, which is a value that the Secretary of Energy determines under EPCA that applies to EV fuel economy values.

Finally, the Parameters Input File contains mainly economic and environmental data, as well as data about how fuel economy credits and California's Zero Emissions Vehicle program credits are simulated in the model.

The coefficient values are defined in Draft TSD Chapter 1.2.1 for both the CAFE and HDPUV FE standards.

See

49 U.S.C. 32904(a)(2), 88 FR 21525 (April 11, 2023).

We generate these technology inputs and assumptions in several ways, including by and through evaluating data submitted by vehicle manufacturers pursuant to their CAFE reporting obligations; consolidating public data on vehicle models from manufacturer websites, press materials, marketing brochures, and other publicly available information; collaborative research, testing, and modeling with other Federal agencies, like the DOE's ANL; research, testing, and modeling with independent organizations, like IAV GmbH Ingenieurgesellschaft Auto und Verkehr (IAV), Southwest Research Institute (SwRI), NAS and FEV North America; determining that work done for prior rules is still relevant and applicable; considering feedback from stakeholders on prior rules and in meetings conducted before the commencement of this rule; and using our own engineering judgment. When we say, “engineering judgment” throughout this rulemaking, we are referring to decisions made by a team of engineers and analysts. This judgment is based on their experience working in the automotive industry and other relevant fields, and assessment of all the data sources described above. Most importantly, we use engineering judgment to assess how best to represent vehicle manufacturer's potential responses to different levels of CAFE standards within the boundaries of our modeling tools, as “a model is meant to simplify reality in order to make it tractable.”

In other words, we use engineering judgment to concentrate potential technology inputs and assumptions from millions of discrete data points from hundreds of sources to three datasets integrated in the CAFE Model and four input files. How the CAFE Model decides to apply technology,

i.e.,

the compliance simulation algorithm, has also been developed using engineering judgment, considering some of the same factors that manufacturers consider when they add technology to vehicles in the real world.

Chem. Mfrs. Ass'n

E.P.A.,

28 F.3d 1259, 1264-65 (D.C. Cir. 1994) (citing Milton Friedman, The Methodology of Positive Economics, in Essays in Positive Economics 3, 14-15 (1953)).

While upon first read this discussion may seem oversimplified, we believe that there is value in all stakeholders being able to understand how the analysis uses different sets of technology inputs and assumptions and how those inputs and assumptions are based on real-world factors. This is so that all stakeholders have the appropriate context to better comment on the specific technology inputs and assumptions discussed later and in detail in all of the associated technical documentation.

1. Technology Options and Pathways

We begin the compliance analysis by defining the range of fuel economy improving technologies that the CAFE Model could add to a manufacturer's vehicles in the United States

market.

83 84 85

These are technologies that we believe are representative of what vehicle manufacturers currently use on their vehicles, and that vehicle manufacturers could use on their vehicles in the timeframe of the standards (MYs 2027 and beyond for the LD analysis and MYs 2030 and beyond for the HDPUV analysis). The technology options include basic and advanced engines, transmissions, electrification, and road load technologies, which include mass reduction (MR), aerodynamic improvement (AERO), and tire rolling resistance (ROLL) reduction technologies. Note that while EPCA/EISA constrains our ability to consider the possibility that manufacturers would comply with CAFE standards by implementing some electrification technologies when making decisions about the level of CAFE standards that is maximum feasible, there are several reasons why we must accurately model the range of available electrification technologies. These are discussed in more detail in Section II.D and in Section V.

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).

We require several data elements to add a technology to the range of options that the CAFE Model can consider; those elements include a broadly applicable technology definition, estimates of how effective that technology is at improving a vehicle's fuel economy value on a range of vehicles (

e.g.,

sedan through pickup truck, or HD pickup truck and HD van), and the cost to apply that technology on a range of vehicles. Each technology we select is designed to be representative of a wide range of specific technology applications used in the automotive industry. For example, in MY 2022, eleven vehicle brands under five vehicle manufacturers

used what we call a “downsized turbocharged engine with cylinder deactivation.” While we might expect brands owned by the same manufacturer to use similar technology on their engines, among those five manufacturers, the engine systems will be very different. Some manufacturers may also have been making those engines longer than others, meaning that they have had more time to make the system more efficient while also making it cheaper, as they make gains learning the development improvement and production process. If we chose to model the best performing, cheapest engine and applied that technology across vehicles made by all automotive manufacturers, we would likely be underestimating the cost and underestimating the technology required for the entire automotive industry to achieve higher levels of CAFE standards. The reverse would be true if we selected a system that was less efficient and more expensive. So, in reality, some vehicle manufacturers' systems will perform better and cost less than our modeled systems and some will perform worse and cost more. However, selecting representative technology definitions for our analysis will ensure that, on balance, we capture a reasonable level of costs and benefits that would result from any manufacturer applying the technology.

Ford, General Motors (GM), Honda, Stellantis, and VWA represent the following 11 brands: Acura, Alfa Romeo, Audi, Bentley, Buick, Cadillac, Chevrolet, Ford, GMC, Lamborghini, and Porsche.

We have been refining the LD technology options since first developing the CAFE Model in the early 2000s. “Refining” means both adding and removing technology options depending on technology availability now and projected future availability in the United States market, while balancing a reasonable amount of modeling and analysis complexity. Since the last analysis we have reduced the number of LD ICE technology options but have refined the options, so they better reflect the diversity of engines in the current fleet. Our technology options also reflect an increase in diversity for hybridization and electrification options, though we utilize these options in a manner that is consistent with statutory constraints. In addition to better representing the current fleet, this reflects consistent feedback from vehicle manufacturers who have told us that they will reduce investment in ICEs while increasing investment in hybrid and plug-in BEV options.

87 FR 25781 (May 2, 2022); Docket Submission of Ex Parte Meetings Prior to Publication of the Corporate Average Fuel Economy Standards for Passenger Cars and Light Trucks for Model Years 2027-2032 and Fuel Efficiency Standards for Heavy-Duty Pickup Trucks and Vans for Model Years 2030-2035 Notice of Proposed Rulemaking memorandum, which can be found under References and Supporting Material in the rulemaking Docket No. NHTSA-2023-0022.

Feedback on the past several CAFE rules has also centered thematically on the expected scope of future electrified vehicle technologies. We have received feedback that we cannot consider BEV options and even so, our costs underestimate BEV costs when we do consider them in, for example, the baseline. We have also received comments that we should consider more electrified vehicle options and our costs overestimate future costs. Consistent with our interpretation of EPCA/EISA, discussed further in Section V.D.1, we include several LD electrified technologies to appropriately represent the diversity of current and anticipated future technology options while ensuring our analysis remains consistent with statutory limitations. In addition, this ensures that our analysis can appropriately capture manufacturer decision making about their vehicle fleets for reasons other than CAFE standards (

e.g.,

other regulatory programs and manufacturing decisions).

The technology options also include our judgment about which technologies will not be available in the rulemaking timeframe. There are several reasons why we may have concluded that it was reasonable to exclude a technology from the options we consider. As with past analyses, we did not include technologies unlikely to be feasible in the rulemaking timeframe, engines technologies designed for markets other than the United States market that are required to use unique gasoline,

or technologies where there were not appropriate data available for the range of vehicles that we model in the analysis (

i.e.

, technologies that are still in the research and development phase but are not ready for mass market production). Each technology section below and in chapter 3 of the Draft TSD discusses these decisions in detail.

In general, most vehicles produced for sale in the United States have been designed to use “Regular” gasoline, or 87 octane. See EIA. What is Octane. Available at:

https://www.eia.gov/energyexplained/gasoline/octane-in-depth.php.

(Accessed: May 31, 2023), for more information.

The HDPUV technology options also represent a diverse range of both internal combustion and electrified powertrain technologies. We last used the CAFE Model for analyzing HDPUV standards in the Phase 2 Medium- and Heavy-Duty Greenhouse Gas and Fuel Efficiency joint rules with EPA in 2016.

Since issuing that rule, we refined the ICE technology options based on trends on vehicles in the fleet and updated technology cost and effectiveness data. The HDPUV options also reflect more electrification and hybridization options in that real-world fleet. However, the HDPUV technology options are also less diverse than the LD technology options, for several reasons.

The HDPUV fleet is significantly smaller than the LD fleet, with five manufacturers building a little over 30 nameplates in one thousand vehicle model configurations,

compared with the almost 20 LDV manufacturers building 369 nameplates in the range of over two thousand configurations. Also, by definition, the HDPUV fleet only includes two vehicle types: HD pickup trucks and work vans.

These vehicle types have focused applications, which includes transporting people and moving equipment and supplies. As discussed in more detail below, these vehicles are built with specific technology application, reliability, and durability requirements in order to do work.

We believe the range of HDPUV technology options appropriately and reasonably represents the smaller range of technology options available currently and for application in future MYs for the United States market.

81 FR 73478 (Oct. 25, 2016); CAFE Compliance and Effects Modeling System. 2016 Final Rule for Model Years 2021-2027 Heavy-Duty Pickups and Vans. Available at:

https://www.nhtsa.gov/corporate-average-fuel-economy/cafe-compliance-and-effects-modeling-system.

(Accessed: May 31, 2023).

In this example, a HDPUV “nameplate” could be the “Sprinter 2500”, as in the Mercedes-Benz Sprinter 2500. The vehicle model configurations are each unique variants of the Sprinter 2500 that have an individual row in our Market Data Input File, which are divided generally based on compliance fuel consumption value and WF.

For this proposal, vehicles were divided between the LD and HDPUV fleets solely on their gross vehicle weight rating (GVWR) being above or below 8,500 lbs. We will revisit the distribution of vehicles in the final rule to include the the distinction for MDPVs.

“Work” includes hauling, towing, carrying cargo, or transporting people, animals, or equipment.

Note, however, that for both the LD and HDPUV analyses, the CAFE Model does not dictate or predict the technologies manufacturers must use to comply; rather, the CAFE Model outlines a technology pathway that manufacturers could use to meet the standards cost-effectively. While we estimate the costs and benefits for different levels of CAFE standards estimating technology applications that manufacturers could use in the rulemaking timeframe, it is entirely possible and reasonable that a vehicle manufacturer will use different technology options to meet our standards than the CAFE Model estimates and may even use technologies that we do not include in our analysis. This is because our standards do not mandate the application of any particular technology. Rather, our standards are performance based: manufacturers can and do use a range of compliance solutions that include technology application, shifting sales from one vehicle model or trim level to another,

and even paying civil penalties. That said, we are confident that the 75 LD technology options and 30 HDPUV technology options included in the analysis (in particular considering that for each technology option, the analysis includes distinct technology cost and effectiveness values for fourteen different types of vehicles, resulting in about a million different technology effectiveness and cost data points) strike a reasonable balance between the diversity of technology used by an entire industry and simplifying reality in order to make modeling tractable.

Manufacturers could increase their production of one type of vehicle that has higher fuel economy level, like the hybrid version of a conventional vehicle model, to meet the standards. For example, Ford has conventional, hybrid, and electric versions of its F-150 pickup truck, and Toyota has conventional, hybrid, and plug-in hybrid versions of its RAV4 sport utility vehicle.

A detailed discussion of all the technologies listed in the table can be found in TSD Chapter 3.

Table II-1 and Table II-2 below list most of the technologies that we used for the LD and HDPUV analyses. Each technology has a name that loosely corresponds to its real-world technology equivalent. We abbreviate the name to a short easy signifier for the CAFE Model to read. We organize those technologies into groups based on technology type: basic and advanced engines, transmissions, electrification, and road load technologies, which include MR, aerodynamic improvement, and low rolling resistance tire technologies.

Table II-1—Light Duty Vehicle Technology Options

Technology name

Abbreviation

Technology group

Single Overhead Camshaft Engine with VVT

SOHC

Basic Engines.

Double Overhead Camshaft Engine with VVT

DOHC

Basic Engines.

Variable Valve Lift

VVL

Basic Engines.

Stoichiometric Gasoline Direct Injection

SGDI

Basic Engines.

Cylinder Deactivation

DEAC

Basic Engines.

Turbocharged Engine

TURBO0

Advanced Engines.

Turbocharged Engine with Cooled Exhaust Gas Recirculation

TURBOE

Advanced Engines.

Turbocharged Engine with Cylinder Deactivation

TURBOD

Advanced Engines.

Advanced Turbocharged Engine, Level 1

TURBO1

Advanced Engines.

Advanced Turbocharged Engine, Level 2

TURBO2

Advanced Engines.

DOHC Engine with Advanced Cylinder Deactivation

ADEACD

Advanced Engines.

SOHC Engine with Advanced Cylinder Deactivation

ADEACS

Advanced Engines.

High Compression Ratio Engine

HCR

Advanced Engines.

High Compression Ratio Engine with Cooled Exhaust Gas Recirculation

HCRE

Advanced Engines.

High Compression Ratio Engine with Cylinder Deactivation

HCRD

Advanced Engines.

Variable Compression Ratio Engine

VCR

Advanced Engines.

Variable Turbo Geometry Engine

VTG

Advanced Engines.

Variable Turbo Geometry Engine with eBoost

VTGE

Advanced Engines.

Turbocharged Engine with Advanced Cylinder Deactivation

TURBOAD

Advanced Engines.

Advanced Diesel Engine

ADSL

Advanced Engines.

Advanced Diesel Engine with Cylinder Deactivation

DSLI

Advanced Engines.

Compressed Natural Gas Engine

CNG

Advanced Engines.

5-Speed Automatic Transmission

AT5

Transmissions.

6-Speed Automatic Transmission

AT6

Transmissions.

7-Speed Automatic Transmission with Level 2 high efficiency gearbox (HEG)

AT7L2

Transmissions.

8-Speed Automatic Transmission

AT8

Transmissions.

8-Speed Automatic Transmission with Level 2 HEG

AT8L2

Transmissions.

8-Speed Automatic Transmission with Level 3 HEG

AT8L3

Transmissions.

9-Speed Automatic Transmission with Level 2 HEG

AT9L2

Transmissions.

10-Speed Automatic Transmission with Level 2 HEG

AT10L2

Transmissions.

10-Speed Automatic Transmission with Level 3 HEG

AT10L3

Transmissions.

6-Speed Dual Clutch Transmission

DCT6

Transmissions.

8-Speed Dual Clutch Transmission

DCT8

Transmissions.

Continuously Variable Transmission

CVT

Transmissions.

Continuously Variable Transmission with Level 2 HEG

CVTL2

Transmissions.

Conventional Powertrain (Non-Electric)

CONV

Electrification.

12V Micro-Hybrid Start-Stop System

SS12V

Electrification.

48V Belt Mounted Integrated Starter/Generator

BISG

Electrification.

Parallel Strong Hybrid/Electric Vehicle with DOHC Engine

P2D

Electrification.

Parallel Strong Hybrid/Electric Vehicle with DOHC+SGDI Engine

P2SGDID

Electrification.

Parallel Strong Hybrid/Electric Vehicle with SOHC Engine

P2S

Electrification.

Parallel Strong Hybrid/Electric Vehicle with SOHC+SGDI Engine

P2SGDIS

Electrification.

Parallel Strong Hybrid Electric Vehicle with TURBO0 Engine

P2TRB0

Electrification.

Parallel Strong Hybrid Electric Vehicle with TURBOE Engine

P2TRBE

Electrification.

Parallel Strong Hybrid Electric Vehicle with TURBO1 Engine

P2TRB1

Electrification.

Parallel Strong Hybrid Electric Vehicle with TURBO2 Engine

P2TRB2

Electrification.

Parallel Strong Hybrid Electric Vehicle with HCR Engine

P2HCR

Electrification.

Parallel Strong Hybrid Electric Vehicle with HCRE Engine

P2HCRE

Electrification.

Power Split Strong Hybrid/Electric Vehicle with Full Time Atkinson Engine

SHEVPS

Electrification.

Plug-in Hybrid Vehicle with TURBO1 Engine and 20 miles of electric range

PHEV20T

Electrification.

Plug-in Hybrid Vehicle with TURBO1 Engine and 50 miles of electric range

PHEV50T

Electrification.

Plug-in Hybrid Vehicle with HCR Engine and 20 miles of electric range

PHEV20H

Electrification.

Plug-in Hybrid Vehicle with HCR Engine and 50 miles of electric range

PHEV50H

Electrification.

Plug-in Hybrid Vehicle with Full Time Atkinson Engine and 20 miles of electric range

PHEV20PS

Electrification.

Plug-in Hybrid Vehicle with Full Time Atkinson Engine and 50 miles of electric range

PHEV50PS

Electrification.

Battery Electric Vehicle with 200 miles of range

BEV1

Electrification.

Battery Electric Vehicle with 250 miles of range

BEV2

Electrification.

Battery Electric Vehicle with 300 miles of range

BEV3

Electrification.

Battery Electric Vehicle with 350 miles of range

BEV4

Electrification.

Fuel Cell Vehicle

FCV

Electrification.

Baseline Tire Rolling Resistance

ROLL0

Rolling Resistance.

Tire Rolling Resistance, 10% Improvement

ROLL10

Rolling Resistance.

Tire Rolling Resistance, 20% Improvement

ROLL20

Rolling Resistance.

Tire Rolling Resistance, 30% Improvement

ROLL30

Rolling Resistance.

Baseline Aerodynamic Drag Technology

AERO0

Aerodynamic Drag.

Aerodynamic Drag, 5% Drag Coefficient Reduction

AERO5

Aerodynamic Drag.

Aerodynamic Drag, 10% Drag Coefficient Reduction

AERO10

Aerodynamic Drag.

Aerodynamic Drag, 15% Drag Coefficient Reduction

AERO15

Aerodynamic Drag.

Aerodynamic Drag, 20% Drag Coefficient Reduction

AERO20

Aerodynamic Drag.

Baseline Mass Reduction Technology

MR0

Mass Reduction.

Mass Reduction—5.0% of Glider

MR1

Mass Reduction.

Mass Reduction—7.5% of Glider

MR2

Mass Reduction.

Mass Reduction—10.0% of Glider

MR3

Mass Reduction.

Mass Reduction—15.0% of Glider

MR4

Mass Reduction.

Mass Reduction—20.0% of Glider

MR5

Mass Reduction.

Table II-2—Heavy-Duty Pickup Truck and Van Technology Options

Technology name

Abbreviation

Technology group

Single Overhead Camshaft Engine with VVT

SOHC

Basic Engines.

Double Overhead Camshaft Engine with VVT

DOHC

Basic Engines.

Stoichiometric Gasoline Direct Injection

SGDI

Basic Engines.

Cylinder Deactivation

DEAC

Basic Engines.

Turbocharged Engine

TURBO0

Advanced Engines.

Advanced Diesel Engine

ADSL

Advanced Engines.

Advanced Diesel Engine with Improvements

DSLI

Advanced Engines.

5-Speed Automatic Transmission

AT5

Transmissions.

6-Speed Automatic Transmission

AT6

Transmissions.

8-Speed Automatic Transmission

AT8

Transmissions.

9-Speed Automatic Transmission with Level 2 HEG

AT9L2

Transmissions.

10-Speed Automatic Transmission with Level 2 HEG

AT10L2

Transmissions.

Conventional Powertrain (Non-Electric)

CONV

Electrification.

12V Micro-Hybrid Start-Stop System

SS12V

Electrification.

Belt Mounted Integrated Starter/Generator

BISG

Electrification.

Parallel Strong Hybrid/Electric Vehicle with SOHC Engine

P2S

(P2D, P2TRB0)

Electrification.

Plug-in Hybrid Vehicle with Basic Engine and 50 miles of electric range

PHEV50H

(PHEV50T)

Electrification.

Battery Electric Vehicle with 150 miles of range (for van classes) or 200 miles of range (for pickup classes)

BEV1

Electrification.

Battery Electric Vehicle with 250 miles of range (for van classes) or 300 miles of range (for pickup classes)

BEV2

Electrification.

Fuel Cell Vehicle

FCV

Electrification.

Baseline Tire Rolling Resistance

ROLL0

Rolling Resistance.

Tire Rolling Resistance, 10% Improvement

ROLL10

Rolling Resistance.

Tire Rolling Resistance, 20% Improvement

ROLL20

Rolling Resistance.

Baseline Aerodynamic Drag Technology

AERO0

Aerodynamic Drag.

Aerodynamic Drag, 10% Drag Coefficient Reduction

AERO10

Aerodynamic Drag.

Aerodynamic Drag, 20% Drag Coefficient Reduction

AERO20

Aerodynamic Drag.

Baseline Mass Reduction Technology

MR0

Mass Reduction.

Mass Reduction—1.4% of Glider

MR1

Mass Reduction.

Mass Reduction—13.0% of Glider

MR2

Mass Reduction.

then organize the groups into pathways. The pathways instruct the CAFE Model how and in what order to apply technology. In other words, the pathways define technologies that are mutually exclusive (

i.e.,

that cannot be applied at the same time), and define the direction in which vehicles can advance as the model evaluates which technologies to apply. Figure II-6 shows the LD and HDPUV technology pathways used in this analysis. In general, the paths are tied to ease of implementation of additional technology and how closely related the technologies are.

A detailed discussion of all the technologies listed in the table can be found in TSD Chapter 3.

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EP17AU23.014

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As an example, our “Turbo Engine Path” consists of five different engine technologies that employ different levels of turbocharging technology. A

turbocharger is essentially a small turbine that is driven by exhaust gases produced by the engine. As these gases flow through the turbocharger, they spin the turbine, which in turn spins a compressor that pushes more air into an engine's cylinder. Having more air in the engine's cylinder allows the engine to burn more fuel, which then creates more power, without needing a physically larger engine. In our analysis, an engine that uses a turbocharger “downsizes,” or becomes smaller. The smaller engine can use less fuel to do the same amount of work as the engine did before it used a turbocharger and was downsized. Allowing basic engines to be downsized and turbocharged instead of just turbocharged keeps the vehicle's utility and performance constant so that we can measure the costs and benefits of different levels of fuel economy improvements, rather than the change in different vehicle attributes. This concept is discussed further, below.

Grouping technologies on pathways also tells the model how to evaluate technologies; continuing this example, a vehicle can only have one engine, so if a vehicle has one of the Turbo engines the model will evaluate which more advanced Turbo technology to apply. Or, if it is more cost-effective to go beyond the Turbo pathway, the model will evaluate whether to apply more advanced engine technologies and hybridization path technology.

Then, the arrows between technologies instruct the model on the order in which to evaluate technologies on a pathway. This ensures that a vehicle that uses a more fuel-efficient technology cannot downgrade to a less efficient option or that a vehicle would switch to technology that was significantly technically different. As an example, if a vehicle in the compliance simulation begins with a TURBOD engine—a turbocharged engine with cylinder deactivation—it cannot adopt a TURBO0 engine. Similarly, this vehicle with a TURBOD engine cannot adopt an ADEACD engine.

The model follows instructions pursuant to the direction of arrows between technology groups and between technologies on the same pathway.

An engine could potentially be changed from TURBO0 to TURBO2 without redesigning the engine block or requiring significantly different expertise to design and implement. A change to ADEACD would likely require a different engine block that might not be possible to fit in the engine bay of the vehicle without a complete redesign and different technical expertise requiring years of research and development. This consideration which would strand capital and break parts sharing is why the advanced engine paths restrict most movement between them.

We also consider two categories of technology that we could not simulate as part of the CAFE Model's technology pathways. “Off-cycle” and air conditioning (AC) efficiency technologies improve vehicle fuel economy, but the benefit of those technologies cannot be captured using the fuel economy test methods that we must use under EPCA/EISA.

As an example, manufacturers can claim a benefit for technology like active seat ventilation and solar reflective surface coatings that make the cabin of a vehicle more comfortable for the occupants, who then do not have to use other less efficient accessories like heat or AC. Instead of including off-cycle and AC efficiency technologies in the technology pathways, we include the improvement as a defined benefit that gets applied to a manufacturer's entire fleet instead of to individual vehicles. The defined benefit that each manufacturer receives in the analysis for using off-cycle and AC efficiency technology on their vehicles is located in the Market Data Input file. See Chapter 3.7 of the Draft TSD for more discussion in how off-cycle and AC efficiency technologies are developed and modeled.

See

49 U.S.C. 32904(c) (“Testing and calculation procedures. . . . the Administrator shall use the same procedures for passenger automobiles the Administrator used for model year 1975 (weighted 55 percent urban cycle and 45 percent highway cycle), or procedures that give comparable results.”).

To illustrate, throughout this section we will follow the hypothetical vehicle mentioned above that begins the compliance simulation with a TURBOD engine. Our hypothetical vehicle, Generic Motors' Ravine Runner F Series, is a roomy, top of the line sport utility vehicle (SUV). The Ravine Runner F Series starts the compliance simulation with technologies from most technology pathways; specifically, after looking at Generic Motors' website and marketing materials, we determined that it has technology that loosely fits within the following technologies that we consider in the CAFE Model: it has a turbocharged engine with cylinder deactivation, a fairly advanced 10-speed automatic transmission, a 12V start-stop system, the least advanced tire technology, a fairly aerodynamic vehicle body, and it employs a fairly advanced level of MR. We track the technologies on each vehicle using a “technology key”, which is the string of technology abbreviations for each vehicle. Again, the vehicle technologies and their abbreviations that we consider in this analysis are shown in Table II-1 and Table II-2 above. The technology key for the Ravine Runner F Series is “TURBOD; AT10L2, SS12V; ROLL0; AERO5; MR3.”

2. Defining the Technology Baseline

The Market Data Input File is one of four Excel input files that the CAFE Model uses for compliance and effects simulation. The Market Data Input file's “Vehicles” tab (or worksheet) houses one of the most significant compilations of technology inputs and assumptions in the analysis, which is a characterization of a baseline fleet of vehicles to which the CAFE Model adds fuel-economy-improving technology. We call this fleet the “baseline fleet” or the “analysis fleet.” The baseline fleet includes a number of inputs necessary for the model to add fuel economy improving technology to each vehicle for the compliance analysis and to calculate the resulting impacts for the effects analysis.

There is one Microsoft Excel file row for each vehicle model, for LD with the same certification fuel economy value and vehicle footprint, and for HDPUV with the same certification fuel consumption and WF. This means that vehicle models with different configurations that affect the vehicle's certification fuel economy or fuel consumption value—for example, our Ravine Runner example vehicle comes in three different configurations, the Ravine Runner FWD, Ravine Runner AWD, and Ravine Runner F Series—will be separated into three rows in the Vehicles tab. In each row we also designate a vehicle's engine, transmission, and platform codes.

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 was developed to treat vehicles, platforms, engines, and transmissions as separate entities, which allows the modeling system to concurrently evaluate technology improvements on multiple vehicles that may share a

common component. Sharing also enables realistic propagation, or “inheriting,” of previously applied technologies from an upgraded component down to the vehicle “users” of

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