* Explicit calculation of test weight, taking into account test weight "bins" and differences in the definition of test weight for light-duty vehicles (curb weight plus 300 pound) and heavy-duty pickups and vans (average of GVWR and curb weight).
   * Procedures to estimate increases in payload when curb weight is reduced, increases in towing capacity if GVWR is reduced, and calculation procedures to correspondingly update calculated work factors.
   * Expansion of model inputs, procedures, and outputs to accommodate technologies not included in prior analyses.
   * Changes to the algorithm used to apply technologies, enabling more explicit accounting for shared vehicle platforms and adoption and "inheritance" of major engine changes.
   * Expansion of the Monte Carlo simulation procedures used to perform probabilistic uncertainty analysis.
These changes are reflected in updated model documentation available at NHTSA's web site, the documentation also providing more information about the model's purpose, scope, structure, design, inputs, operation, and outputs.  DOT invites comment on the updated model, and in particular, on the updated handling of shared vehicle platforms, engines, and transmissions, and on the new procedures to estimate changes to test weight, GVWR, and GCWR as vehicle curb weight is reduced.
         Product Cadence
Past comments on the CAFE model have stressed the importance of product cadence -- i.e., the development and periodic redesign and freshening of vehicles -- in terms of involving technical, financial, and other practical constraints on applying new technologies, and DOT has steadily made changes to the model with a view toward accounting for these considerations.  For example, early versions of the model added explicit "carrying forward" of applied technologies between model years, subsequent versions applied assumptions that most technologies would be applied when vehicles are freshened or redesigned, and more recent versions applied assumptions that manufacturers would sometimes apply technology earlier than "necessary" in order to facilitate compliance with standards in ensuing model years.  Thus, for example, if a manufacturer is expected to redesign many of its products in model years 2018 and 2023, and the standard's stringency increases significantly in model year 2021, the CAFE model will estimate the potential that the manufacturer will add more technology than necessary for compliance in MY 2018, in order to carry those product changes forward through the next redesign and contribute to compliance with the MY 2021 standard.
The model also accommodates estimates of overall limits (expressed as "phase-in caps" in model inputs) on the rates at which manufacturers' may practicably add technology to their respective fleets.  So, for example, even if a manufacturer is expected to redesign half of its production in MY 2016, if the manufacturer is not already producing any strong hybrid electric vehicles (SHEVs), a phase-in cap can be specified in order to assume that manufacturer will stop applying SHEVs in MY 2016 once it has done so to at least 3 percent of its production in that model year.
After the light-duty rulemaking analysis accompanying the 2012 final rule regarding post-2016 CAFE standards and related GHG emissions standards, DOT staff began work on CAFE model changes expected to better reflect additional considerations involved with product planning and cadence.  These changes, summarized below, interact with preexisting model characteristics discussed above.
         Platforms and Technology
The term "platform" is used loosely in industry, but generally refers to a common structure shared by a group of vehicle variants.  The degree of commonality varies, with some platform variants exhibiting traditional "badge engineering" where two products are differentiated by little more than insignias, while other platforms be used to produce a broad suite of vehicles that bear little outer resemblance to one another.
Given the degree of commonality between variants of a single platform, manufacturers do not have complete freedom to apply technology to a vehicle: while some technologies (e.g. low rolling resistance tires) are very nearly "bolt-on" technologies, others involve substantial changes to the structure and design of the vehicle, and therefore necessarily are constant between vehicles that share a common platform.  DOT staff has, therefore, modified the CAFE model such that all mass reduction and aero technologies are forced to be constant between variants of a platform.  The agencies request comment on the suitability of this viewpoint, and which technologies can deviate from one platform variant to another.
Within the analysis fleet, each vehicle is associated with a specific platform.  As the CAFE model applies technology, it first defines a platform "leader" as the vehicle variant of a platform with the highest technology utilization vehicle of mass reduction and aerodynamic technologies.  As the vehicle applies technologies, it effectively harmonizes to the highest common denominator of the platform.  If there is a tie, the CAFE model begins applying aerodynamic and mass reduction technology to the vehicle with the lowest average sales across all available model years.  If there remains a tie, the model begins by choosing the vehicle with the highest average MSRP across all available model years.  The model follows this formulation due to previous market trends suggesting that many technologies begin deployment at the high-end, low-volume end of the market as manufacturers build their confidence and capability in a technology, and later expand the technology across more mainstream product lines.
In the HD pickup and van market, there is a relatively small amount of diversity in platforms produced by manufacturers: typically 1-2 truck platforms and 1-2 van platforms.  However, accounting for platforms will take on greater significance in future analyses involving the light-duty fleet, and the agency requests comments on the general use of platforms within CAFE rulemaking.
         Engine and Transmission Inheritance
In practice, manufacturers are limited in the number of engines and transmissions that they produce.  Typically a manufacturer produces a number of engines -- perhaps six or eight engines for a large manufacturer -- and tunes them for slight variants in output for a variety of car and truck applications.  Manufacturers limit complexity in their engine portfolio for much the same reason as they limit complexity in vehicle variants: they face engineering manpower limitations, and supplier, production and service costs that scale with the number of parts produced.
In previous usage of the CAFE model, engines and transmissions in individual models were allowed relative freedom in technology application, potentially leading to solutions that would, if followed, involve unaccounted-for costs associated with increased complexity in the product portfolio.  The lack of a constraint in this area allowed the model to apply different levels of technology to the engine in each vehicle at the time of redesign or refresh, independent of what was done to other vehicles using a previously identical engine.
In the current version of the CAFE model, engines and transmissions that are shared between vehicles must apply the same levels of technology in all technologies dictated by engine or transmission inheritance.  This forced adoption is referred to as "engine inheritance" in the model documentation.
As with platform-shared technologies, the model first chooses an "engine leader" among vehicles sharing the same engine.  The leader is selected first by the vehicle with the lowest average sales across all available model years.  If there is a tie, the vehicle with the highest average MSRP across model years is chosen.  The model applies the same logic with respect to the application of transmission changes.  As with platforms, this is driven by the concept that vehicle manufacturers typically deploy new technologies in small numbers prior to deploying widely across their product lines.
         Interactions between Regulatory Classes
Like earlier versions, the current CAFE model provides for integrated analysis spanning different regulatory classes, accounting both for standards that apply separately to different classes and for interactions between regulatory classes.  Light vehicle CAFE standards are specified separately for passenger cars and light trucks.  However, there is considerable sharing between these two regulatory classes.  Some specific engines and transmissions are used in both passenger cars and light trucks, and some vehicle platforms span these regulatory classes.  For example, some sport-utility vehicles are offered in 2WD versions classified as passenger cars and 4WD versions classified as light trucks.  Integrated analysis of manufacturers' passenger car and light truck fleets provides the ability to account for such sharing and reduce the likelihood of finding solutions that could involve impractical levels of complexity in manufacturers' product lines.  In addition, integrated analysis provides the ability to simulate the potential that manufactures could earn CAFE credits by over complying with one standard and use those credits toward compliance with the other standard (i.e., to simulate credit transfers between regulatory classes).
HD pickups and vans are regulated separately from light-duty vehicles.  While manufacturers cannot transfer credits between light-duty and MDHD classes, there is some sharing of engineering and technology between light-duty vehicles and HD pickups and vans.  For example, some passenger vans with GVWR over 8,500 pounds are classified as medium-duty passenger vehicles (MDPVs) and thus included in manufacturers' light-duty truck fleets, while cargo vans sharing the same nameplate are classified as HD vans.
While today's analysis examines the HD pickup and van fleet in isolation, as a basis for analysis supporting the planned final rule, the agencies intend to develop an overall analysis fleet spanning both the light-duty and HD pickup and van fleets.  Doing so could show some technology "spilling over" to HD pickups and vans due, for example, to the application of technology in response to current light-duty standards.  More generally, modeling the two fleets together should tend to more realistically limit the scope and complexity of estimated compliance pathways.
The agencies anticipate that the impact of modeling a combined fleet will primarily arise from engine-transmission inheritance.  While platform sharing between the light-duty and MD pickup and van fleets is relatively small (MDPVs aside), there are a number of instances of engine and transmission sharing across the two fleets.  When the fleets are modeled together, the agencies anticipate that engine inheritance will be implemented across the combined fleet, and therefore only one engine-transmission leader can be defined across the combined fleet.  As with the fleets separately, all vehicles using a shared engine/transmission would automatically adopt technologies adopted by the engine-transmission leader.
The agencies request comment on plans to analyze the light-duty and MD pickup and van fleets jointly in support of planning for the final rule.
         Phase-In Caps
The CAFE model retains the ability to use phase-in caps (specified in model inputs) as proxies for a variety of practical restrictions on technology application.  Unlike vehicle-specific restrictions related to redesign, refreshes or platforms/engines, phase-in caps constrain technology application at the vehicle manufacturer level. They are intended to reflect a manufacturer's overall resource capacity available for implementing new technologies (such as engineering and development personnel and financial resources), thereby ensuring that resource capacity is accounted for in the modeling process.
In previous CAFE rulemakings, redesign/refresh schedules and phase-in caps were the primary mechanisms to reflect an OEM's limited pool of available resources during the rulemaking time frame and the years leading up to the rulemaking time frame, especially in years where many models may be scheduled for refresh or redesign.  The newly-introduced representation platform-, engine-, and transmission-related considerations discussed above augment the model's preexisting representation of redesign cycles and accommodation of phase-in caps.  Considering these new constraints, inputs for today's analysis de-emphasize reliance on phase-in caps.
In this application of the CAFE model, phase-in caps are used only for the most advanced technologies included in the analysis, i.e., SHEVs and lean-burn GDI engines, considering that these technologies are most likely to involve implementation costs and risks not otherwise accounted for in corresponding input estimates of technology cost.  For these two technologies, the agencies have applied caps that begin at 3 percent (i.e., 3 percent of the manufacturer's production) in MY 2017, increase at 3 percent annually during the ensuing nine years (reaching 30 percent in the MY 2026), and subsequently increasing at 5 percent annually for four years (reaching 50 percent in MY 2030).  Note that the agencies did not feel that lean-burn engines were feasible in the timeframe of this rulemaking, so decided to reject any model runs where they were selected. Due to the cost ineffectiveness of this technology, it was never chosen. The agencies request comment on the appropriateness of these phase-in caps as proxies for constraints that, though not monetized by the agencies, nonetheless limit rates at which these two technologies can practicably be deployed, and on the appropriateness of setting inputs to stop applying phase-in caps to other technologies in this analysis.  Comments on this issue should provide information supporting any alternative recommended inputs.
         Impact of Vehicle Technology Application Requirements
Compared to prior analyses of light-duty standards, these model changes, along with characteristics of the HD pickup and van fleet result in some changes in the broad characteristics of the model's application of technology to manufacturers' fleets.  First, since the number of HD pickup and van platforms in a portfolio is typically small, compliance with standards may appear especially "lumpy" (compared to previous applications of the CAFE model to the more highly segmented light-duty fleet), with significant over compliance when widespread redesigns precede stringency increases, and/or significant application of carried-forward (aka "banked") credits.
Second, since the use of phase-in caps has been de-emphasized and manufacturer technology deployment remains tied strongly to estimated product redesign and freshening schedules, technology penetration rates may jump more quickly as manufacturers apply technology to high-volume products in their portfolio.
By design, restrictions that enforce commonality of mass reduction and aerodynamic technologies on variants of a platform, and those that enforce engine inheritance, will result in fewer vehicle-technology combinations in a manufacturer's future modeled fleet.  These restrictions are expected to more accurately capture the true costs associated with producing and maintaining a product portfolio.
         Accounting for Test Weight, Payload, and Towing Capacity
As mentioned above, NHTSA has also revised the CAFE model to explicitly account for the regulatory "binning" of test weights used to certify light-duty fuel economy and HD pickup and van fuel consumption for purposes of evaluating fleet-level compliance with fuel economy and fuel consumption standards.   For HD pickups and vans, test weight (TW) is based on adjusted loaded vehicle weight (ALVW), which is defined as the average of gross vehicle weight rating (GVWR) and curb weight (CW). TW values are then rounded, resulting in TW "bins":
      ALVW <= 4,000 lb.:  TW rounded to nearest 125 lb.
      4000 lb. < ALVW <= 5,500 lb.:  TW rounded to nearest 250 lb.
      ALVW > 5,500 lb.:  TW rounded to nearest 500 lb.
This "binning" of TW is relevant to calculation of fuel consumption reductions accompanying mass reduction.  Model inputs for mass reduction (as an applied technology) are expressed in terms of a percentage reduction of curb weight and an accompanying estimate of the percentage reduction in fuel consumption, setting aside rounding of test weight.  Therefore, to account for rounding of test weight, NHTSA has modified these calculations as follows:
∆FCrounded_TW=∆TWx∆FCunrounded_TW∆CW
where:
      ∆CW = % change in curb weight (from model input),
            ∆FCunrounded_TW = % change in fuel consumption (from model input), without TW rounding,
      ∆TW = % change in test weight (calculated), and
      ∆FCrounded_TW = % change in fuel consumption (calculated), with TW rounding.
As a result, some applications of vehicle mass reduction will produce no compliance benefit at all, in cases where the changes in ALVW are too small to change test weight when rounding is taken into account.  On the other hand, some other applications of vehicle mass reduction will produce significantly more compliance benefit than when rounding is not taken into account, in cases where even small changes in ALVW are sufficient to cause vehicles' test weights to increase by, e.g., 500 pounds when rounding is accounted for.  Model outputs now include initial and final TW, GVWR, and GCWR (and, as before, CW) for each vehicle model in each model year, and the agencies invite comment on the extent to which these changes to account explicitly for changes in TW are likely to produce more realistic estimates of the compliance impacts of reductions in vehicle mass.
In addition, considering that the regulatory alternatives in the agencies' analysis all involve attribute-based standards in which underlying fuel consumption targets vary with "work factor" (defined by the agencies as the sum of three quarters of payload, one quarter of towing capacity, and 500 lb. for vehicles with 4WD), NHTSA has modified the CAFE model to apply inputs defining shares of curb weight reduction to be "returned" to payload and shares of GVWR reduction to be returned to towing capacity.  The standards' dependence on work factor provides some incentive to increase payload and towing capacity, both of which are buyer-facing measures of vehicle utility.  In the agencies' judgment, this provides reason to assume that if vehicle mass is reduced, manufacturers are likely to "return" some of the change to payload and/or towing capacity.  For this analysis, the agencies have applied the following assumptions:
   * GVWR will be reduced by half the amount by which curb weight is reduced.  In other words, 50 percent of the curb weight reduction will be returned to payload.
   * GCWR will not be reduced.  In other words, 100 percent of any GVWR reduction will be returned to towing capacity.
   * GVWR/CW and GCWR/GVWR will not increase beyond levels observed among the majority of similar vehicles (or, for outlier vehicles, initial values):
Table VI-16 Ratios for Modifying GVW and GCW as a Function of Mass Reduction

               Maximum Ratios Assumed Enabled by Mass Reduction
Group
                                    GVWR/CW
                                   GCWR/GVWR
Unibody
                                     1.75
                                     1.50
Gasoline pickups > 13k GVWR
                                     2.00
                                     1.50
Other gasoline pickups
                                     1.75
                                     2.25
Diesel SRW pickups
                                     1.75
                                     2.50
All other
                                     1.75
                                     2.25

The first of two of these inputs are specified along with standards for each regulatory alternative, and the GVWR/CW and GCWR/GVWR "caps" are specified separately for each vehicle model in the analysis fleet.
In addition, DOT has changed the model to prevent HD pickup and van GVWR from falling below 8,500 pounds when mass reduction is applied (because doing so would cause vehicles to be reclassified as light-duty vehicles), and to treat any additional mass for hybrid electric vehicles as reducing payload by the same amount (e.g., if adding a strong HEV package to a vehicle involves a 350 pound penalty, GVWR is assumed to remain unchanged, such that payload is also reduced by 350 pounds).
The agencies invite comment on these methods for estimating how changes in vehicle mass may impact fuel consumption, GVWR, and GCWR, and on corresponding inputs to today's analysis.
Development of the Analysis Fleet
As discussed above, both agencies used DOT's CAFE modeling system to estimate technology costs and application rates under each regulatory alternative, including the no action alternative (which reflects continuation of previously-promulgated standards).  Impacts under each of the "action" alternatives are calculated on an incremental basis relative to impacts under the no action alternative.  The modeling system relies on many inputs, including an analysis fleet.  In order to estimate the impacts of potential standards, it is necessary to estimate the composition of the future vehicle fleet.  Doing so enables estimation of the extent to which each manufacturer may need to add technology in response to a given series of attribute-based standards, accounting for the mix and fuel consumption of vehicles in each manufacturer's regulated fleet.  The agencies create an analysis fleet in order to track the volumes and types of fuel economy-improving and CO2-reducing technologies that are already present in the existing vehicle fleet. This aspect of the analysis fleet helps to keep the CAFE model from adding technologies to vehicles that already have these technologies, which would result in "double counting" of technologies' costs and benefits.  An additional step involved projecting the fleet sales into MYs 2019-2030.  This represents the fleet volumes that the agencies believe would exist in MYs 2019-2030.  The following presents an overview of the information and methods applied to develop the analysis fleet, and some basic characteristics of that fleet.
The resultant analysis fleet is provided in detail at NHTSA's web site, along with all other inputs to and outputs from today's analysis.  The agencies invite comment on this analysis fleet and, in particular, on any other information that should be reflected in an analysis fleet used to update the agencies' analysis for the final rule.  Also, the agencies also invites comment on the potential expansion of this analysis fleet such that the impacts of new HD pickup and van standards can be estimated within the context of an integrated analysis of light-duty vehicles and HD pickups and vans, accounting for interactions between the fleets.
         Data Sources
Most of the information about the vehicles that make up the 2014 analysis fleet was gathered from the 2014 Pre-Model Year Reports submitted to EPA by the manufacturers under Phase 1 of Fuel Efficiency and GHG Emission Program for Medium- and Heavy-Duty Trucks, MYs 2014-2018.

The major manufacturers of class 2b and class 3 trucks (Chrysler, Ford and GM) were asked to voluntarily submit updates to their Pre-Model Year Reports.  Updated data were provided by Chrysler and GM.  These updated data were used in constructing the analysis fleet for these manufacturers.
The agencies agreed to treat this information as Confidential Business Information (CBI) until the publication of the NPRM.  This information can be made public at this time because by now all MY2014 vehicle models have been produced, which makes data about them essentially public information.
These data (by individual vehicle configuration produced in MY2014) include: Projected Production Volume/MY2014 Sales, Drive Type, Axle Ratio, Work Factor, Curb Weight, Test Weight, GVWR, GCWR, Fuel Consumption (gal/100 mile), engine type (gasoline or diesel), engine displacement, transmission type and number of gears.
The column "Engine" of the Pre-Model Year report for each OEM was copied to the column "Engine Code" of the vehicle sheet of the CAFE model market data input file.  Values of "Engine" were changed to Engine Codes for use in the CAFE model.  The codes indicated on the vehicle sheet map the detailed engine data on the engine sheet to the appropriate vehicle on the vehicle sheet of the CAFE model input file.
The column "Trans Class" of the Pre-Model Year report for each OEM was copied to the column "Transmission Code" of the vehicle sheet of the market data input file.   Values of "Trans Class" were changed to Transmission Codes for use in the CAFE model.  The codes indicated on the vehicle sheet map the detailed transmission data on the transmission sheet to the appropriate vehicle on the vehicle sheet of the CAFE model input file.
In addition to information about each vehicle, the agencies need additional information about the fuel economy-improving/CO2-reducing technologies already on those vehicles in order to assess how much and which technologies to apply to determine a path toward future compliance.  Thus, the agencies augmented this information with publicly-available data that includes more complete technology descriptions.  Specific engines and transmissions associated with each manufacturer's trucks were identified using their respective internet sites. Detailed technical data on individual engines and transmissions indicated on the engine sheet and transmission sheet of the CAFE model input file were then obtained from manufacturer internet sites, spec sheets and product literature, Ward's Automotive Group and other commercial internet sites such as cars.com, edmunds.com, and motortrend.com. Specific additional information included:

         *       "Fuel Economy on Secondary Fuel" was calculated as E85 = .74 gasoline fuel economy, or B20 = .98 diesel fuel economy.  These values were duplicated in the columns "Fuel Economy (Ethanol-85)" and "Fuel Economy (Biodiesel-20)" of the CAFE market data input file.

         *       Values in the columns "Fuel Share (Gasoline)", "Fuel Share (Ethanol-85)", "Fuel Share (Diesel)," and "Fuel Share (Biodiesel-20)" are Volpe assumptions.

         *       The CAFE model also requires that values of Origin, Regulatory Class, Technology Class, Safety Class, and Seating (Max) be present in the file in order for the model to run.  Placeholder values were added in these columns.

         *       In addition to the data taken from the OEM Pre Model Year submittals, NHTSA added additional data for use by the CAFE model.  These included Platform, Refresh Years, Redesign Years, MSRP, Style, Structure and Fuel Capacity.

         *       MSRP was obtained from web2carz.com and the OEM web sites.

         *       Fuel capacity was obtained from OEM spec sheets and product literature.

         *       The Structure values (Ladder, Unibody) used by the CAFE model were added.  These were determined from OEM product literature and the automotive press.  It should be noted that the new vans such as the Transit in fact utilize a ladder/unibody structure.  Ford product literature uses the term "Uniladder" to describe the structure.  Vans based on this structure are noted in the Vehicle Notes column of the NHTSA input file.

         *       Style values used by the CAFE model were also added: Chassis Cab, Cutaway, Pickup and Van.

Vehicle Redesign Schedules and Platforms
Product cadence in the Class 2b and 3 pickup market has historically ranged from 7-9 years between major redesigns. However, due to increasing competitive pressures and consumer demands the agency anticipates that manufacturers will generally shift to shorter design cycles resembling those of the light duty market.  Pickup truck manufacturers in the Class 2b and 3 segments are shown to adopt redesign cycles of six years, allowing two redesigns prior to the end of the regulatory period in 2025.  The agencies request comment on the anticipated future use of redesign cycles in this product segment.
The Class 2b and 3 van market has changed markedly from five years ago.  Ford, Nissan, Ram and Daimler have adopted vans of "Euro Van" appearance, and in many cases now use smaller turbocharged gasoline or diesel engines in the place of larger, naturally-aspirated V8s.  The 2014 Model Year used in this analysis represents a period where most manufacturers, with the exception of General Motors, have recently introduced a completely redesigned product after many years.  The van segment has historically been one of the slowest to be redesigned of any product segment, with some products going two decades or more between redesigns.
Due to new entrants in the field and increased competition, the agencies anticipate that most manufacturers will increase the pace of product redesigns in the van segment, but that they will continue to trail other segments.  The cycle time used in this analysis is approximately ten years between major redesigns, allowing manufacturers only one major redesign during the regulatory period.   The agencies request comment on this anticipated product design cycle.
Additional detail on product cadence assumptions for specific manufacturers is located in Chapter 10 of the draft RIA.
Sales Volume Forecast
Since each manufacturer's required average fuel consumption and GHG levels are sales-weighted averages of the fuel economy/GHG targets across all model offerings, sales volumes play a critical role in estimating that burden.  The CAFE model requires a forecast of sales volumes, at the vehicle model-variant level, in order to simulate the technology application necessary for a manufacturer to achieve compliance in each model year for which outcomes are simulated.
For today's analysis, the agencies relied on the MY 2014 pre-model-year compliance submissions from manufacturers to provide sales volumes at the model level based on the level of disaggregation in which the models appear in the compliance data.  However, the agencies only use these reported volumes without adjustment for MY 2014.  For all future model years, we combine the manufacturer submissions with sales projections from the 2014 Annual Energy Outlook Reference Case and IHS Automotive to determine model variant level sales volumes in future years.   The projected sales volumes by class that appear in the 2014 Annual Energy Outlook as a result of a collection of assumptions about economic conditions, demand for commercial miles traveled, and technology migration from light-duty pickup trucks in response to the concurrent light-duty CAFE/GHG standards. These are shown in Chapter 2 of the draft RIA.
For this analysis, the agencies have limited this analysis fleet to class 2b and 3 HD pickups and vans.  However, especially considering interactions between the light-duty and HD pickup and van fleets (e.g., MDPVs being included in the light-duty fleet), the agencies are evaluating the potential to analyze the fleets in an integrated fashion for the final rule, and invite comment on the extent to which doing so could provide more realistic estimates of the incremental impacts of new standards applicable HD pickups and vans.
The projection of total sales volumes for the Class 2b and 3 market segment was based on the total volumes in the 2014 AEO Reference Case.  For the purposes of this analysis, the AEO2014 calendar year volumes have been used to represent the corresponding model-year volumes.  While AEO2014 provides enough resolution in its projections to separate the volumes for the Class 2b and 3 segments, the agencies deferred to the vehicle manufacturers and chose to rely on the relative shares present in the pre-model-year compliance data.
The relative sales share by vehicle type (van or pickup truck, in this case) was derived from a sales forecast that the agencies purchased from IHS Automotive, and applied to the total volumes in the AEO2014 projection. Table VI-17 shows the implied shares of the total new 2b/3 vehicle market broken down by manufacturer and vehicle type.
Table VI-17 IHS Automotive Market Share Forecast for 2b/3 vehicles

                            Model Year Market Share
Manufacturer
Style
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2021
Daimler
Van
                                      3%
                                      3%
                                      3%
                                      3%
                                      3%
                                      3%
                                      3%
Fiat
Van
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      3%
Ford
Van
                                      16%
                                      17%
                                      17%
                                      17%
                                      18%
                                      18%
                                      18%
General Motors
Van
                                      12%
                                      12%
                                      11%
                                      12%
                                      13%
                                      13%
                                      13%
Nissan
Van
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%

Daimler
Pickup
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
Fiat
Pickup
                                      14%
                                      14%
                                      14%
                                      14%
                                      11%
                                      12%
                                      12%
Ford
Pickup
                                      28%
                                      27%
                                      30%
                                      30%
                                      30%
                                      27%
                                      26%
General Motors
Pickup
                                      23%
                                      23%
                                      21%
                                      21%
                                      21%
                                      22%
                                      23%
Nissan
Pickup
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%

Within those broadly defined market shares, volumes at the manufacturer/model-variant level were constructed by applying the model-variant's share of manufacturer sales in the pre-model-year compliance data for the relevant vehicle style, and multiplied by the total volume estimated for that manufacturer and that style.
After building out a set of initial future sales volumes based on the sources described above, the agencies attempted to incorporate new information about changes in sales mix that would not be captured by either the existing sales forecasts or the simulated technology changes in vehicle platforms.  In particular, Ford has announced intentions to phase out their existing Econoline vans, gradually shifting volumes to the new Transit platform for some model variants (notably chassis cabs and cutaways variants) and eliminating offerings outright for complete Econoline vans as early as model year 2015.  In the case of complete Econoline vans, the volumes for those vehicles were allocated to MY2015 Transit vehicles based on assumptions about likely production splits for the powertrains of the new Transit platform.  The volumes for complete Econoline vans were shifted at ratios of 50 percent, 35 percent, and 15 percent for 3.7 L, 3.5 L Eco-boost, and 3.2 L diesel, respectively.  Within each powertrain, sales were allocated based on the percentage shares present in the pre-model-year compliance data. The chassis cab and cutaway variants of the Econoline were phased out linearly between MY2015 and MY2020, at which time the Econolines cease to exist in any form and all corresponding volume resides with the Transits.
Additional Technology Cost and Effectiveness Inputs
In addition to the base technology cost and effectiveness inputs described in 0of this preamble, the CAFE model has some additional cost and effectiveness inputs, described as follows.
The CAFE model accommodates inputs to adjust accumulated effectiveness under circumstances when combining multiple technologies could result in underestimation or overestimation of total incremental effectiveness relative to an "unevolved" baseline vehicle. These so-called synergy factors may be positive, where the combination of the technologies results in greater improvement than the additive improvement of each technology, or negative, where the combination of the technologies is lower than the additive improvement of each technology.  The synergy factors used in this analysis are described in VI-18.
Table VI-18 Technology Pair Effectiveness Synergy Factors for HD Pickups and Vans
                                Technology Pair
                                  Adjustment

                                Technology Pair
                                  Adjustment
                                   8SPD/CCPS
                                    -4.60%

                                   IATC/CCPS
                                    -1.30%
                                  8SPD/DEACO
                                    -4.60%

                                  IATC/DEACO
                                    -1.30%
                                   8SPD/ICP
                                    -4.60%

                                   IATC/ICP
                                    -1.30%
                                  8SPD/TRBDS1
                                     4.60%

                                  IATC/TRBDS1
                                     1.30%
                                  AERO2/SHEV1
                                     1.40%

                                   MR1/CCPS
                                     0.40%
                                  CCPS/IACC1
                                    -0.40%

                                   MR1/DCP
                                     0.40%
                                  CCPS/IACC2
                                    -0.60%

                                    MR1/VVA
                                     0.40%
                                   DCP/IACC1
                                    -0.40%

                                   MR2/ROLL1
                                    -0.10%
                                   DCP/IACC2
                                    -0.60%

                                   MR2/SHEV1
                                    -0.40%
                                  DEACD/IATC
                                    -0.10%

                                  NAUTO/CCPS
                                    -1.70%
                                  DEACO/IACC2
                                    -0.80%

                                  NAUTO/DEACO
                                    -1.70%
                                  DEACO/MHEV
                                    -0.70%

                                   NAUTO/ICP
                                    -1.70%
                                  DEACS/IATC
                                    -0.10%

                                   NAUTO/SAX
                                    -0.40%
                                  DTURB/IATC
                                     1.00%

                                 NAUTO/TRBDS1
                                     1.70%
                                  DTURB/MHEV
                                    -0.60%

                                  ROLL1/AERO1
                                     0.10%
                                  DTURB/SHEV1
                                    -1.00%

                                  ROLL1/SHEV1
                                     1.10%
                                  DVVLD/8SPD
                                    -0.60%

                                  ROLL2/AERO2
                                     0.20%
                                  DVVLD/IACC2
                                    -0.80%

                                 SHFTOPT/MHEV
                                    -0.30%
                                  DVVLD/IATC
                                    -0.60%

                                  TRBDS1/MHEV
                                     0.80%
                                  DVVLD/MHEV
                                    -0.70%

                                 TRBDS1/SHEV1
                                    -3.30%
                                  DVVLS/8SPD
                                    -0.60%

                                  TRBDS1/VVA
                                    -8.00%
                                  DVVLS/IACC2
                                    -0.80%

                                  TRBDS2/EPS
                                    -0.30%
                                  DVVLS/IATC
                                    -0.50%

                                 TRBDS2/IACC2
                                    -0.30%
                                  DVVLS/MHEV
                                    -0.70%

                                 TRBDS2/NAUTO
                                    -0.50%

                                   VVA/IACC1
                                    -0.40%

                                   VVA/IACC2
                                    -0.60%

                                   VVA/IATC
                                    -0.60%
The CAFE model also accommodates inputs to adjust accumulated incremental costs under circumstances when the application sequence could result in underestimation or overestimation of total incremental costs relative to an "unevolved" baseline vehicle.  For today's analysis, the agencies have applied one such adjustment, increasing the cost of medium-sized gasoline engines by $513 in cases where turbocharging and engine downsizing is applied with variable valve actuation.
The analysis performed using Method A also applied cost inputs to address some costs encompassed neither by the agencies' estimates of the direct cost to apply these technologies, nor by the agencies' methods for "marking up" these costs to arrive at increases in the new vehicle purchase costs.  To account for the additional costs that could be incurred if a technology is applied and then quickly replaced, the CAFE model accommodates inputs specifying a "stranded capital cost" specific to each technology.  For this analysis, the model was run with inputs to apply about $78 of additional cost (per engine) if gasoline engine turbocharging and downsizing (separately for each "level" considered) is applied and then immediately replaced, declining steadily to zero by the tenth model year following initial application of the technology.  The model also accommodates inputs specifying any additional changes owners might incur in maintenance and post-warranty repair costs.  For this analysis, the model was run with inputs indicating that vehicles equipped with less rolling-resistant tires could incur additional tire replacement costs equivalent to $21-$23 (depending on model year) in additional costs to purchase the new vehicle.  The agencies did not, however, include inputs specifying any potential changes repair costs that might accompany application of any of the above technologies.  A sensitivity analysis using Method A, discussed below, includes a case in which repair costs are estimated using factors consistent with those underlying the indirect cost multipliers used to mark up direct costs for the agencies' central analysis.
The agencies invite comment on all efficacy and cost inputs involved in today's analysis and request that commenters provide any additional data or forward-looking estimates that could be used to support alternative inputs, including those related to costs beyond those reflected in the cost to purchase new vehicles.
Other Analysis Inputs

In addition to the inputs summarized above, the analysis of potential standards for HD pickups and vans makes use of a range of other estimates and assumptions specified as inputs to the CAFE modeling system.  Some significant inputs (e.g., estimates of future fuel prices) also applicable to other MDHD segments are discussed below in Section IX.  Others more specific to the analysis of HD pickups and vans are as follows:
         Vehicle Survival and Mileage Accumulation:
Today's analysis estimates the travel, fuel consumption, and emissions over the useful lives of vehicles produced during model years 2014-2030.  Doing so requires initial estimates of these vehicles' survival rates (i.e., shares expected to remain in service) and mileage accumulation rates (i.e., anticipated annual travel by vehicles remaining in service), both as a function of vehicle vintage (i.e., age).  These estimates are based on an empirical analysis of changes in the fleet of registered vehicles over time, in the case of survival rates, and usage data collected as part of the last Vehicle In Use Survey (the 2002 VIUS), in the case of mileage accumulation.
         Rebound Effect
Expressed as an elasticity of mileage accumulation with respect to the fuel cost per mile of operation, the agencies have applied a rebound effect of 10 percent for today's analysis.
         On-Road "Gap"
The model was run with a 20 percent adjustment to reflect differences between on-road and laboratory performance.
         Fleet Population Profile
Though not reported here, cumulative fuel consumption and CO2 emissions are presented in the accompanying draft EIS, and these calculations utilize estimates of the numbers of vehicles produced in each model year remaining in service in calendar year 2014.  The initial age distribution of the registered vehicle population in 2014 is based on vehicle registration data acquired by NHTSA from R.L. Polk Company.
         Past Fuel Consumption Levels
Though not reported here, cumulative fuel consumption and CO2 emissions are presented in the accompanying draft EIS, and these calculations require estimates of the performance of vehicles produced prior to model year 2014.  Consistent with AEO 2014, the model was run with the assumption that gasoline and diesel HD pickups and vans averaged 14.9 mpg and 18.6 mpg, respectively, with gasoline versions averaging about 48 percent of production.
         Long-Term Fuel Consumption Levels
Though not reported here, longer-term estimates of fuel consumption and emissions are presented in the accompanying draft EIS.  These estimates include calculations involving vehicle produced after MY 2030 and, consistent with AEO 2014, the model was run with the assumption that fuel consumption and CO2 emission levels will continue to decline at 0.05 percent annually (compounded) after MY 2030.
         Payback Period
To estimate in what sequence and to what degree manufacturers might add fuel-saving technologies to their respective fleets, the CAFE model iteratively ranks remaining opportunities (i.e., applications of specific technologies to specific vehicles) in terms of effective cost, primary components of which are the technology cost and the avoided fuel outlays, attempting to minimize effective costs incurred.  Depending on inputs, the model also assumes manufacturers may improve fuel consumption beyond requirements insofar as doing so will involve applications of technology at negative effective cost -- i.e., technology application for which buyers' up-front costs are quickly paid back through avoided fuel outlays.  This calculation includes only fuel outlays occurring within a specified payback period.  For this analysis, a payback period of 6 months was applied for the dynamic baseline case, or Alternative 1b.  Thus, for example, a manufacturer already in compliance with standards is projected to apply a fuel consumption improvement projected to cost $250 (i.e., as a cost that could be charged to the buyer at normal profit to the manufacturer) and reduce fuel costs by $500 in the first year of vehicle operation.  The agencies have conducted the same analysis applying a payback period of 0 months for the flat baseline case, or Alternative 1a.
         Civil Penalties
EPCA and EISA require that a manufacturer pay civil penalties if it does not have enough credits to cover a shortfall with one or both of the light-duty CAFE standards in a model year. While these provisions do not apply to HD pickups and vans, at this time, the CAFE model will show civil penalties owed in cases where available technologies and credits are estimated to be insufficient for a manufacturer to achieve compliance with a standard.  These model-reported estimates have been excluded from this analysis.
         Coefficients for Fatality Calculations
Today's analysis includes estimates of the extent to which HD pickups and vans produced during MYs 2014-2030 may be involved in fatal crashes, considering the mass, survival, and mileage accumulation of these vehicles, taking into account changes in mass and mileage accumulation under each regulatory alternative.  These calculations make use of the same coefficients applied to light trucks by DOT in its 2012 rulemaking analysis supporting post-2017 CAFE standards.  Baseline rates of involvement in fatal crashes are 13.03 and 13.24 fatalities per billion miles for vehicles with initial curb weights above and below 4,594 pounds, respectively.  Considering that the data underlying the corresponding statistical analysis included observations only through calendar year 2010, these rates are reduced by 9.6 percent to account for subsequent impacts of recent Federal Motor Vehicle Safety Standards (FMVSS) and anticipated behavioral changes (e.g., continued increases in seat belt use).  For vehicles above 4,594 pounds -- i.e., the majority of the HD pickup and van fleet -- mass reduction is estimated to reduce the net incidence of highway fatalities by 0.34 percent per 100 pounds of removed curb weight, because in crashes involving multiple vehicles, fatalities among occupants of other vehicles will be reduced.  For the few HD pickups and vans below 4,594 pounds, mass reduction is estimated to increase the net incidence of highway fatalities by 0.52 percent per 100 pounds.  Consistent with new DOT guidance, the social cost of highway fatalities is estimated using a VSL (value of statistical life) of $9.36m in 2014, increasing thereafter at 1.18 percent annually.
         Compliance Credit Provisions
Today's analysis accounts for the potential to over comply with standards and thereby earn compliance credits, applying these credits to ensuring compliance requirements.  In doing so, the agencies treat any unused carried-forward credits as expiring after five model years, consistent with current and proposed standards.  For today's analysis, the agencies are not estimating the potential to "borrow" -- i.e., to carry credits back to past model years.
         Emission Factors
While CAFE model calculates vehicular CO2 emissions directly on a per-gallon basis using fuel consumption and fuel properties (density and carbon content), the model calculates emissions of other pollutants (methane, nitrogen oxides, ozone precursors, carbon monoxide, sulfur dioxide, particulate matter, and air toxics) on a per-mile basis.  In doing so, the Method A analysis used corresponding emission factors estimated using EPA's MOVES model.  To estimate emissions (including CO2) from upstream processes involved in producing, distributing, and delivering fuel, NHTSA has applied emission factors -- all specified on a gram per gallon basis -- derived from Argonne National Laboratory's GREET model.
         Refueling Time Benefits
To estimate the value of time savings associated with vehicle refueling, the Method A analysis used estimates that an average refueling event involves refilling 60 percent of the tank's capacity over the course of 3.5 minutes, at an hourly cost of $27.22..
         External Costs of Travel
Changes in vehicle travel will entail economic externalities.  To estimate these costs, the Method A analysis used estimates that congestion-, accident-, and noise-related externalities will total 5.1 cent/mi., 2.8 cent/mi., and 0.1 cent/mi., respectively.
         Ownership and Operating Costs
Method A results predict that the total cost of vehicle ownership and operation will change not just due to changes in vehicle price and fuel outlays, but also due to some other costs likely to vary with vehicle price.  To estimate these costs, NHTSA has applied factors of 5.5 percent (of price) for taxes and fees, 15.3 percent for financing, 19.2 percent for insurance, 1.9 percent for relative value loss.  The Method A analysis also estimates that average vehicle resale value will increase by 25 percent of any increase in new vehicle price.
DOT CAFE Model Analysis of Impacts of Regulatory Alternatives for HD Pickups and Vans
         Industry Impacts
The agencies' analysis fleet provides a starting point for estimating the extent to which manufacturers might add fuel-saving (and, therefore, CO2-avoiding) technologies under various regulatory alternatives, including the no-action alternative that defines a baseline against which to measure estimated impacts of new standards.  The analysis fleet is a forward-looking projection of production of new HD pickups and vans, holding vehicle characteristics (e.g., technology content and fuel consumption levels) constant at model year 2014 levels, and adjusting production volumes based on recent DOE and commercially-available forecasts.  This analysis fleet includes some significant changes relative to the market characterization that was used to develop the Phase 1 standards applicable starting in model year 2014; in particular, the analysis fleet includes some new HD vans (e.g., Ford's Transit and Fiat/Chrysler's Promaster) that are considerably more fuel-efficient than HD vans these manufacturers have previously produced for the U.S. market.
While the proposed standards are scheduled to begin in model year 2021, the requirements they define are likely to influence manufacturers' planning decisions several years in advance.  This is true in light-duty planning, but accentuated by the comparatively long redesign cycles and small number of models and platforms offered for sale in the 2b/3 market segment.  Additionally, manufacturers will respond to the cost and efficacy of available fuel consumption improvements, the price of fuel, and the requirements of the Phase 1 standards that specify maximum allowable average fuel consumption and GHG levels for MY2014-MY2018 HD pickups and vans (the final standard for MY2018 is held constant for model years 2019 and 2020).  The forward-looking nature of product plans that determine which vehicle models will be offered in the model years affected by the proposed standards lead to additional technology application to vehicles in the analysis fleet that occurs in the years prior to the start of the proposed standards.  From the industry perspective, this means that manufacturers will incur costs to comply with the proposed standards in the baseline and that the total cost of the proposed regulations will include some costs that occur prior to their start, and represent incremental changes over a world in which manufacturers will have already modified their vehicle offerings compared to today.
Table VI-19 MY2021 Baseline Costs for Manufacturers in 2b/3 Market Segment in the Dynamic Baseline, or Alternative 1b
                                 Manufacturer
                          Average Technology Cost ($)
                           Total Cost Increase ($m)
                                 Chrysler/Fiat
                                      275
                                      27
                                    Daimler
                                      18
                                       0
                                     Ford
                                      258
                                      78
                                General Motors
                                      782
                                      191
                                    Nissan
                                      282
                                       3
                                   Industry
                                      442
                                      300
As Table VI-19 shows, the industry as a whole is expected to add about $440 of new technology to each new vehicle model by 2021 under the no-action alternative defined by the Phase 1 standards.  Reflecting differences in projected product offerings in the analysis fleet, some manufacturers (notably Daimler) are significantly less constrained by the Phase 1 standards than others and face lower cost increases as a result.  General Motors (GM) shows the largest increase in average vehicle cost, but results for GM's closest competitors (Ford and Chrysler/Fiat) do not include the costs of their recent van redesigns, which are already present in the analysis fleet (discussed in greater detail below).
The above results reflect the assumption that manufacturers having achieved compliance with standards might act as if buyers are willing to pay for further fuel consumption improvements that "pay back" within 6 months (i.e., those improvements whose incremental costs are exceeded by savings on fuel within the first six months of ownership).  It is also possible that manufacturers will choose not to migrate cost-effective technologies to the 2b/3 market segment from similar vehicles in the light-duty market.  To examine this possibility, all regulatory alternatives were also analyzed using the DOT CAFE model (Method A) with a 0-month payback period in lieu of the 6-month payback period discussed above.  (A sensitivity analysis using Method A, discussed below, also explores longer payback periods, as well as the combined effect of payback period and fuel price on vehicle design decisions.)  Resultant technology costs in model year 2021 results for the no-action alternative, summarized in Table VI-20 below, are quite similar to those shown above for the 6-month payback period. Due to the similarity between the two baseline characterizations, results in the following discussion represent differences relative to only the 6-month payback baseline.
Table VI-20 MY2021 Baseline Costs for HD Pickups and Vans in the Flat Baseline, or Alternative 1a
                                 Manufacturer
                          Average Technology Cost ($)
                           Total Cost Increase ($m)
                                 Chrysler/Fiat
                                      268
                                      27
                                    Daimler
                                       0
                                       0
                                     Ford
                                      248
                                      75
                                General Motors
                                      767
                                      188
                                    Nissan
                                      257
                                       3
                                   Industry
                                      431
                                      292
The results below represent the impacts of several regulatory alternatives, including those defined by the proposed standards, as incremental changes over the baseline, where the baseline is defined as the state of the world in the absence of the proposed regulatory action. Large-scale, macroeconomic conditions like fuel prices are constant across all alternatives, including the baseline, as are the fuel economy improvements under the no-action alternative defined by the Phase 1 MDHD rulemaking that covers model years 2014  -  2018 and is constant from model year 2018 through 2020.  In the baseline scenario, the Phase 1 standards are assumed to remain in place and at 2018 levels throughout the analysis (i.e. MY 2030).  The only difference between the definitions of the alternatives is the stringency of the proposed standards starting in MY 2021 and continuing through either MY 2025 or MY 2027, and all of the differences in outcomes across alternatives are attributable to differences in the standards.
The standards vary in stringency across regulatory alternatives (1  -  5), but as discussed above, all of the standards are based on the curve developed in the Phase 1 standards that relate fuel economy and GHG emissions to a vehicle's work factor. The alternatives considered here represent different rates of annual increase in the curve defined for model year 2018, growing from a 0 percent annual increase (Alternative 1, the baseline or "no-action" alternative) up to a 4 percent annual increase (Alternative 5).  Table VI-21 shows a summary of outcomes by alternative incremental to the baseline (Alternative 1b) for Model Year 2030, with the exception of technology penetration rates, which are absolute.
The technologies applied by the CAFE model have been grouped (in most cases) to give readers a general sense of which types of technology are applied more frequently than others, and are more likely to be offered in new class 2b/3 vehicles once manufacturers are fully compliant with the standards in the alternative.  Model year 2030 was chosen to account for technology application that occurs once the standards have stabilized, but manufacturers are still redesigning products to achieve compliance  -  generating technology costs and benefits in those model years.  The summaries of technology penetration are also intended to reflect the relationship between technology application and cost increases across the alternatives.  The table rows present the degree to which specific technologies will be present in new class 2b and class 3 vehicles in 2030, and correspond to: Variable valve timing (VVT) and/or variable valve lift (VVL), cylinder deactivation, direct injection, engine turbocharging, 8-speed automatic transmissions, electric power-steering and accessory improvements, micro-hybridization (which reduces engine idle, but does not assist propulsion), full hybridization (integrated starter generator or strong hybrid that assists propulsion and recaptures braking energy), and aerodynamic improvements to the vehicle shape.  In addition to the technologies in the following tables, there are some lower-complexity technologies that have high market penetration across all the alternatives and manufacturers; low rolling-resistance tires, low friction lubricants, and reduced engine friction, for example.
Table VI-21 Summary of HD Pickups and Vans Alternatives' Impact on Industry versus the Dynamic Baseline, Alternative 1b
                                  Alternative
                                       2
                                       3
                                       4
                                       5
                          Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
                        Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                           Total Stringency Increase
                                     9.6%
                                     16.2%
                                     16.3%
                                     18.5%
                   Average Fuel Economy  (miles per gallon)
                                   Required
                                     19.04
                                     20.57
                                     20.57
                                     21.14
                                   Achieved
                                     19.14
                                     20.61
                                     20.83
                                     21.27
--------------------------------------------------------------------------------
Average Fuel Consumption (gallons /100 mi.)
--------------------------------------------------------------------------------
Required
                                     5.25
                                     4.86
                                     4.86
                                     4.73
                                   Achieved
                                     5.22
                                     4.85
                                     4.80
                                     4.70
                    Average Greenhouse Gas Emissions (g/mi)
                                   Required
                                      495
                                      458
                                      458
                                      446
                                   Achieved
                                      491
                                      458
                                      453
                                      444
                          Technology Penetration (%)
                                VVT and/or VVL
                                      46
                                      46
                                      46
                                      46
                                Cylinder Deac.
                                      29
                                      21
                                      21
                                      21
                               Direct Injection
                                      17
                                      25
                                      31
                                      32
                                 Turbocharging
                                      55
                                      63
                                      63
                                      63
                                  8-Speed AT
                                      67
                                      96
                                      96
                                      97
                               EPS, Accessories
                                      54
                                      80
                                      79
                                      79
                                  Stop Start
                                       0
                                       0
                                      10
                                      13
                               Hybridization[a]
                                       0
                                       8
                                      35
                                      51
                              Aero. Improvements
                                      36
                                      78
                                      78
                                      78
                        Mass Reduction (vs. No-Action)
                                   CW (lb.)
                                      239
                                      243
                                      325
                                      313
                                    CW (%)
                                      3.7
                                      3.7
                                      5.0
                                      4.8
                        Technology Cost (vs. No-Action)
                                Average ($) [b]
                                      578
                                     1,348
                                     1,655
                                     2,080
                                 Total ($m) c
                                      437
                                     1,019
                                     1,251
                                     1,572
                             Payback period (m) c
                                      25
                                      31
                                      34
                                      38
         a Includes mild hybrids (ISG) and strong HEVs.
         [b] Values used in Methods A & B
         [c] Values used in Method A, calculated using a 3% discount rate.
In general, the model projects that the standards would cause manufacturers to produce HD pickups and vans that are lighter, more aerodynamic, and more technologically complex across all the alternatives.  As  Table VI-21 shows, there is a difference between the relatively small increases in required fuel economy and average incremental technology cost between the alternatives, suggesting that the challenge of improving fuel consumption and CO2 emissions accelerates as stringency increases (i.e., that there may be a "knee" in the relationship between technology cost and reductions in fuel consumption/GHG emissions).  Despite the fact that the required average fuel consumption level changes by about 3 percent between Alternative 4 and Alternative 5, average technology cost increases by more than 25 percent.  These differences help illustrate the clustered character of this market segment, where relatively small increases in fuel economy can lead to much larger cost increases if entire platforms must be changed in response to the standards.
The contrast between alternatives 3 and 4 is even more prominent, with an identical required fuel economy improvement leading to price increases greater than 20 percent based on the more rapid rate of increase and shorter time span of Alternative 4, which achieves all of its increases by MY 2025 while Alternative 3 continues to increase at a slower rate until MY 2027.  Despite these differences, the increase in average payback period when moving from Alternative 3 to Alternative 4 to Alternative 5 is fairly constant at around an additional three months for each jump in stringency.
Manufacturers offer few models, typically only a pickup truck and/or a cargo van, and while there are a large number of variants of each model, the degree of component sharing across the variants can make diversified technology application either economically impractical or impossible.  This forces manufacturers to apply some technologies more broadly in order to achieve compliance than they might do in other market segments (passenger cars, for example).  This difference between broad and narrow application  -  where some technologies must be applied to entire platforms, while some can be applied to individual model variants  -  also explains why certain technology penetration rates decrease between alternatives of increasing stringency (cylinder deactivation or mass reductions in Table VI-21, for example).  For those cases, narrowly applying a more advanced (and costly) technology can be a more cost effective path to compliance and lead to reductions in the amount of lower-complexity technology that is applied.
One driver of the change in technology cost between Alternative 3 and Alternative 4 is the amount of hybridization projected to result from the implementation of the standards.  While only about 5 percent full hybridization (defined as either integrated starter-generator or strong hybrid) is expected to be needed to comply with Alternative 3, the higher rate of increase and compressed schedule moving from Alternative 3 to Alternative 4 is enough to increase the percentage of the fleet adopting full hybridization by a factor of two.  To the extent that manufacturers are concerned about introducing hybrid vehicles in the 2b and 3 market, it is worth noting that new vehicles subject to Alternative 3 achieve the same fuel economy as new vehicle subject to Alternative 4 by 2030, with less hybridization required to achieve the improvement.
The alternatives also lead to important differences in outcomes at the manufacturer level, both from the industry average and from each other.  General Motors, Ford, and Chrysler (Fiat), are expected to have approximately 95 percent of the 2b/3 new vehicle market during the years that the proposed standards are being phased in.  Due to their importance to this market and the similarities between their model offerings, these three manufacturers are discussed together and a summary of the way each is impacted by the standards appears below in Table VI-22, Table VI-23, and Table VI-24 for General Motors, Ford, and Chrysler/Fiat, respectively.
Table VI-22 Summary of impacts on General Motors by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
                                  Alternative
                                       2
                                       3
                                       4
                                       5
                          Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
                        Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
                                   Required
                                     18.38
                                     19.96
                                      20
                                     20.53
                                   Achieved
                                     18.43
                                     19.95
                                     20.24
                                     20.51
                  Average Fuel Consumption (gallons /100 mi.)
                                   Required
                                     5.44
                                     5.01
                                       5
                                     4.87
                                   Achieved
                                     5.42
                                     5.01
                                     4.94
                                     4.87
                    Average Greenhouse Gas Emissions (g/mi)
                                   Required
                                      507
                                      467
                                      467
                                      455
                                   Achieved
                                      505
                                      468
                                      461
                                      455
                          Technology Penetration (%)
                                VVT and/or VVL
                                      64
                                      64
                                      64
                                      64
                                Cylinder Deac.
                                      47
                                      47
                                      47
                                      47
                               Direct Injection
                                      18
                                      18
                                      36
                                      36
                                 Turbocharging
                                      53
                                      53
                                      53
                                      53
                                  8-Speed AT
                                      36
                                      100
                                      100
                                      100
                               EPS, Accessories
                                      100
                                      100
                                      100
                                      100
                                  Stop Start
                                       0
                                       0
                                       2
                                       0
                                 Hybridization
                                       0
                                      19
                                      79
                                      100
                              Aero. Improvements
                                      100
                                      100
                                      100
                                      100
                        Mass Reduction (vs. No-Action)
                                   CW (lb.)
                                      325
                                      161
                                      158
                                      164
                                    CW (%)
                                      5.3
                                      2.6
                                      2.6
                                      2.7
                        Technology Cost (vs. No-Action)
                                Average ($) [a]
                                      785
                                     1,706
                                     2,244
                                     2,736
                         Total ($m, undiscounted) [b]
                                      214
                                      465
                                      611
                                      746
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate

Table VI-23 Summary of Impacts on Ford by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
                                  Alternative
                                       2
                                       3
                                       4
                                       5
                          Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
                        Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
                                   Required
                                     19.42
                                     20.96
                                     20.92
                                     21.51
                                   Achieved
                                     19.5
                                     21.04
                                     21.28
                                     21.8
                  Average Fuel Consumption (gallons /100 mi.)
                                   Required
                                     5.15
                                     4.77
                                     4.78
                                     4.65
                                   Achieved
                                     5.13
                                     4.75
                                     4.70
                                     4.59
                    Average Greenhouse Gas Emissions (g/mi)
                                   Required
                                      485
                                      449
                                      450
                                      438
                                   Achieved
                                      482
                                      447
                                      443
                                      433
                          Technology Penetration (%)
                                VVT and/or VVL
                                      34
                                      34
                                      34
                                      34
                                Cylinder Deac.
                                      18
                                       0
                                       0
                                       0
                               Direct Injection
                                      16
                                      34
                                      34
                                      34
                                 Turbocharging
                                      51
                                      69
                                      69
                                      69
                                  8-Speed AT
                                      100
                                      100
                                      100
                                      100
                               EPS, Accessories
                                      41
                                      62
                                      59
                                      59
                                  Stop Start
                                       0
                                       0
                                      20
                                      29
                                 Hybridization
                                       0
                                       2
                                      14
                                      30
                              Aero. Improvements
                                       0
                                      59
                                      59
                                      59
                        Mass Reduction (vs. No-Action)
                                   CW (lb.)
                                      210
                                      202
                                      379
                                      356
                                    CW (%)
                                      3.2
                                       3
                                      5.7
                                      5.3
                        Technology Cost (vs. No-Action)
                                Average ($) [a]
                                      506
                                     1,110
                                     1,353
                                     1,801
                         Total ($m, undiscounted) [b]
                                      170
                                      372
                                      454
                                      604
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate

Table VI-24 Summary of Impacts on Fiat/Chrysler by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
Required
                                     18.73
                                     20.08
                                     20.12
                                     20.70
Achieved
                                     18.83
                                     20.06
                                     20.10
                                     20.70
                  Average Fuel Consumption (gallons /100 mi.)
Required
                                     5.34
                                     4.98
                                     4.97
                                     4.83
Achieved
                                     5.31
                                     4.99
                                     4.97
                                     4.83
                    Average Greenhouse Gas Emissions (g/mi)
Required
                                      515
                                      480
                                      479
                                      466
Achieved
                                      512
                                      481
                                      480
                                      467
                          Technology Penetration (%)
VVT and/or VVL
                                      40
                                      40
                                      40
                                      40
Cylinder Deac.
                                      23
                                      23
                                      23
                                      23
Direct Injection
                                      17
                                      17
                                      17
                                      17
Turbocharging
                                      74
                                      74
                                      74
                                      74
8-Speed AT
                                      65
                                      88
                                      88
                                      88
EPS, Accessories
                                       0
                                      100
                                      100
                                      100
Stop-Start
                                       0
                                       0
                                       0
                                       0
Hybridization
                                       0
                                       3
                                       3
                                      10
Aero. Improvements
                                       0
                                      100
                                      100
                                      100
                        Mass Reduction (vs. No-Action)
CW (lb.)
                                      196
                                      649
                                      648
                                      617
CW (%)
                                      2.8
                                      9.1
                                      9.1
                                      8.7
                        Technology Cost (vs. No-Action)
Average ($) [a]
                                      434
                                     1,469
                                     1,486
                                     1,700
Total ($m, undiscounted) [b]
                                      48
                                      163
                                      164
                                      188
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate

The fuel consumption and GHG standards require manufacturers to achieve an average level of compliance, represented by a sales-weighted average across the specific targets of all vehicles offered for sale in a given model year, such that each manufacturer will have a unique required consumption/emissions level determined by the composition of its fleet, as illustrated above.  However, there are more interesting differences than the small differences in required fuel economy levels among manufacturers.  In particular, the average incremental technology cost increases with the stringency of the alternative for each manufacturer, but the size of the cost increase from one alternative to the next varies among them, with General Motors showing considerably larger increases in cost moving from Alternative 3 to Alternative 4, than from either Alternative 2 to Alternative 3 or Alternative 4 to Alternative 5. Ford is estimated to have more uniform cost increases from each alternative to the next, in increasing stringency, though still benefits from the reduced pace and longer period of increase associated with Alternative 3 compared to Alternative 4.
The simulation results show all three manufacturers facing cost increases when the stringency of the standards move from 2.5 percent annual increases over the period from MY 2021  -  2027 to 3.5 percent annual increases from MY 2021 - 2025, but General Motors has the largest at 75 percent more than the industry average price increase for Alternative 4.  GM also faces higher cost increases in Alternative 2 about 50 percent more than either Ford or Fiat/Chrysler.  And for the most stringent alternative considered, the agencies estimate that General Motors would face average cost increases of more than $2,700, in addition to the more than $700 increase in the baseline  -  approaching nearly $3,500 per vehicle over today's prices.
Technology choices also differ by manufacturer, and some of those decisions are directly responsible for the largest cost discrepancies.  For example, GM is estimated to engage in the least amount of mass reduction among the Big 3 after Phase 1, and much less than Chrysler/Fiat, but reduces average vehicle mass by over 300 pounds in the baseline  -  suggesting that some of GM's easiest Phase 1 compliance opportunities can be found in lightweighting technologies.  Similarly, Chrysler/Fiat is projected to apply less hybridization than the others, and much less than General Motors, which is simulated to have full hybrids (either integrated starter generator or complete hybrid system) on all of its fleet by 2030, nearly 20 percent of which will be strong hybrids, in Alternative 4 and the strong hybrid share decreases to about 18 percent in Alternative 5, as some lower level technologies are applied more broadly.  Because the analysis applies the same technology inputs and the same logic for selecting among available opportunities to apply technology, the unique situation of each manufacturer determined which technology path is projected as the most cost-effective.
In order to understand the differences in incremental technology costs and fuel economy achievement across manufacturers in this market segment, it is important to understand the differences in their starting position relative to the proposed standards.  One important factor, made more obvious in the following figures, is the difference between the fuel economy and performance of the recently redesigned vans offered by Fiat/Chrysler and Ford (the Promaster and Transit, respectively), and the more traditionally-styled vans that continue to be offered by General Motors (the Express/Savannah).  In MY 2014, Ford began the phase-out of the Econoline van platform, moving those volumes to the Euro-style Transit vans (discussed in more detail in Section 0D.2).  The Transit platform represents a significant improvement over the existing Econoline platform from the perspective of fuel economy, and for the purpose of complying with the standards, the relationship between the Transit's work factor and fuel economy is a more favorable one than the Econoline vans it replaces.  Since the redesign of van offerings from both Chrysler/Fiat and Ford occur in (or prior to) the 2014 model year, the costs, fuel consumption improvements, and reductions of vehicle mass associated with those redesigns are included in the analysis fleet, meaning they are not carried as part of the compliance modeling exercise.  By contrast, General Motors is simulated to redesign their van offerings after 2014, such that there is a greater potential for these vehicles to incur additional costs attributable to new standards, unlike the costs associated with the recent redesigns of their competitors.  The inclusion of these new Ford and Chrysler/Fiat products in the analysis fleet is the primary driver of the cost discrepancy between GM and its competitors in both the baseline and Alternative 2, when Ford and Chrysler/Fiat have to apply considerably less technology to achieve compliance.
The remaining 5 percent of the 2b/3 market is attributed to two manufacturers, Daimler and Nissan, which, unlike the other manufacturers in this market segment, only produce vans.  The vans offered by both manufacturers currently utilize two engines and two transmissions, although both Nissan engines are gasoline engines and both Daimler engines are diesels.  Despite the logical grouping, these two manufacturers are impacted much differently by the proposed standards.  For the least stringent alternative considered, Daimler adds no technology and incurs no incremental cost in order to comply with the standards.  At stringency increases greater than or equal to 3.5 percent per year, Daimler only really improves some of their transmissions and improves the electrical accessories of its Sprinter vans.  By contrast, Nissan's starting position is much weaker and their compliance costs closer to the industry average in Table VI-21.  This difference could increase if the analysis fleet supporting the final rule includes forthcoming Nissan HD pickups.
Table VI-25 Summary of Impacts on Daimler by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
Required
                                     23.36
                                     25.19
                                     25.25
                                     25.91
Achieved
                                     25.23
                                     25.79
                                     25.79
                                     26.53
                  Average Fuel Consumption (gallons /100 mi.)
Required
                                     4.28
                                     3.97
                                     3.96
                                     3.86
Achieved
                                     3.96
                                     3.88
                                     3.88
                                     3.77
                    Average Greenhouse Gas Emissions (g/mi)
Required
                                      436
                                      404
                                      404
                                      393
Achieved
                                      404
                                      395
                                      395
                                      384
                          Technology Penetration (%)
VVT and/or VVL
                                       0
                                       0
                                       0
                                       0
Cylinder Deac.
                                       0
                                       0
                                       0
                                       0
Direct Injection
                                       0
                                       0
                                       0
                                       0
Turbocharging
                                      44
                                      44
                                      44
                                      44
8-Speed AT
                                       0
                                      44
                                      44
                                      100
EPS, Accessories
                                       0
                                       0
                                       0
                                       0
Stop-Start
                                       0
                                       0
                                       0
                                       0
Hybridization
                                       0
                                       0
                                       0
                                       0
Aero. Improvements
                                       0
                                       0
                                       0
                                       0
                        Mass Reduction (vs. No-Action)
CW (lb.)
                                       0
                                       0
                                       0
                                       0
CW (%)
                                       0
                                       0
                                       0
                                       0
                        Technology Cost (vs. No-Action)
Average ($) [a]
                                       0
                                      165
                                      165
                                      374
Total ($m, undiscounted) [b]
                                       0
                                       4
                                       4
                                       9
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate

Table VI-26 Summary of Impacts on Nissan by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
Required
                                     19.64
                                     21.19
                                     20.92
                                     21.46
Achieved
                                     19.84
                                     21.17
                                     21.19
                                     21.51
                  Average Fuel Consumption (gallons /100 mi.)
Required
                                     5.09
                                     44.72
                                     4.78
                                     4.66
Achieved
                                     5.04
                                     4.72
                                     4.72
                                     4.65
                    Average Greenhouse Gas Emissions (g/mi)
Required
                                      452
                                      419
                                      425
                                      414
Achieved
                                      448
                                      419
                                      419
                                      413
                          Technology Penetration (%)
VVT and/or VVL
                                      100
                                      100
                                      100
                                      100
Cylinder Deac.
                                      49
                                      49
                                      49
                                      49
Direct Injection
                                      51
                                      51
                                      51
                                      100
Turbocharging
                                      51
                                      51
                                      51
                                      50
8-Speed AT
                                       0
                                      51
                                      51
                                      51
EPS, Accessories
                                       0
                                      100
                                      100
                                      100
Stop-Start
                                       0
                                       0
                                       0
                                       0
Hybridization
                                       0
                                       0
                                       0
                                      28
Aero. Improvements
                                       0
                                      100
                                      100
                                      100
                        Mass Reduction (vs. No-Action)
CW (lb.)
                                       0
                                       0
                                      307
                                      303
CW (%)
                                       0
                                       0
                                       5
                                      4.9
                        Technology Cost (vs. No-Action)
Average ($) [a]
                                      378
                                     1,150
                                     1,347
                                     1,935
Total ($m, undiscounted) [b]
                                       5
                                     15.1
                                     17.7
                                     25.4
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate

As Table VI-25 and Table VI-26 show, Nissan applies more technology than Daimler in the less stringent alternatives and significantly more technology with increasing stringency.  The Euro-style Sprinter vans that comprise all of Daimler's model offerings in this segment put Daimler in a favorable position.  However, those vans are already advanced  -  containing downsized diesel engines and advanced aerodynamic profiles.  Much like the Ford Transit vans, the recent improvements to the Sprinter vans occurred outside the scope of the compliance modeling so the costs of the improvements are not captured in the analysis.
Although Daimler's required fuel economy level is much higher than Nissan's (in miles per gallon), Nissan starts from a much weaker position than Daimler and must incorporate additional engine, transmission, platform-level technologies (e.g. mass reduction and aerodynamic improvements) in order to achieve compliance.  In fact, more than 25 percent of Nissan's van offerings are projected to contain integrated starter generators by 2030 in Alternative 5.
While the agencies do not allow sales volumes for any manufacturer (or model) to vary across regulatory alternatives in the analysis, it is conceivable that under the most stringent alternatives individual manufacturers could lose market share to their competitors if the prices of their new vehicles rise more than the industry average without compensating fuel savings and/or changes to other features.
         Estimated Consumer Impacts with Respect to HD Pickups and Vans Using Method A
The consumer impacts of the proposed rule are more straightforward. Table VI-27 shows the impact on the average consumer who buys a new class 2b or 3 vehicle in model year 2030 using the worst case assumption that manufacturers pass through the entire cost of technology to the purchaser.  (All dollar values are discounted at a rate of 7 percent per year from the time of purchase, except the average price increase, which occurs at the time of purchase).  The additional costs associated with increases in taxes, registration fees, and financing costs are also captured in the table.
Table VI-27 Summary of Individual Consumer Impacts in MY 2030 in the HD Pickup and Van Market Segment using Method A and versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase Increases
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
           Value of Lifetime Fuel Savings (discounted 2012 dollars)
Pretax
                                     2,068
                                     3,924
                                     4,180
                                     4,676
Tax
                                      210
                                      409
                                      438
                                      491
Total
                                     2,278
                                     4,334
                                     4,618
                                     5,168
                  Economic Benefits (discounted 2012 dollars)
Mobility Benefit
                                      244
                                      437
                                      472
                                      525
Avoided Refueling Time
                                      86
                                      164
                                      172
                                      193
               New Vehicle Purchase (vs. No-Action Alternative)
Avg.  Price Increase ($)
                                      578
                                     1,348
                                     1,655
                                     2,080
Avg. Payback (years)
                                      2.5
                                       3
                                      3.4
                                      3.9
Additional costs ($)
                                      120
                                      280
                                      344
                                      432
                 Net Lifetime Consumer Benefits (discounted $)
Total Net Benefits
                                     1,910
                                     3,307
                                     3,263
                                     3,374
        [*]All dollar values are discounted at a rate of 7 percent per year from the time of purchase, except the average price increase, which occurs at the time of purchase).

As expected, a consumer's lifetime fuel savings increase monotonically across the alternatives.  The mobility benefit in Table VI-27 refers to the value of additional miles that an individual consumer travels as a result of reduced per-mile travel costs.  The additional miles result in additional fuel consumption and represent foregone fuel savings, but are valued by consumers at the cost of the additional fuel plus the consumer surplus (a measure of the increase in welfare that consumers achieve by having more mobility).  The refueling benefit measures the value of time saved through reduced refueling events, the result of improved fuel economy and range in vehicles that have been modified in response to the standards.
There are some limitations to using payback period as a measure, as it accounts for fuel expenditures and incremental costs associated with taxes, registration fees and financing, and increased maintenance costs, but not the cost of potential repairs or replacements, which may or may not be more expensive with more advanced technology.
Overall, the average consumer is likely to see discounted lifetime benefits that are multiples of the price increases faced when purchasing the new vehicle in MY 2030 (or the few model years preceding 2030).  In particular, the net present value of future benefits at the time of purchase are estimated to be 3.5, 3.0, 2.2, and 1.8 times the price increase of the average new MY2030 vehicle for Alternatives 2  -  5, respectively. As Table VI-27 illustrates, the preferred alternative has the highest ratio of discounted future consumer benefits to consumer costs.
         Estimated Social and Environmental Impacts for HD Pickups and Vans
Social benefits increase with the increasing stringency of the alternatives.  As in the consumer analysis, the net benefits continue to increase with increasing stringency  -  suggesting that benefits are still increasing faster than costs for even the most stringent alternative.
Table VI-28 Summary of Total Social Costs and Benefits Through MY2029 in the HD Pickup and Van Market Segment using Method A and versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                     2.0%
                                     2.5%
                                     3.5%
                                     4.0%
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                           Fuel Purchases ($billion)
Pretax Savings
                                      9.6
                                     15.9
                                     19.1
                                     22.2
                         Fuel Externalities ($billion)
Energy Security
                                      0.5
                                      0.9
                                      1.1
                                      1.3
CO2 emissions[a]
                                      1.9
                                      3.2
                                      3.8
                                      4.4
                     VMT-Related Externalities ($billion)
Driving Surplus
                                      1.1
                                      1.8
                                      2.1
                                      2.4
Refueling Surplus
                                      0.4
                                      0.7
                                      0.8
                                      0.9
Congestion
                                     -0.2
                                     -0.4
                                     -0.4
                                     -0.5
Accidents
                                     -0.1
                                     -0.2
                                     -0.2
                                     -0.3
Noise
                                       0
                                       0
                                       0
                                       0
Fatalities
                                      0.1
                                     -0.2
                                     -0.2
                                     -0.5
Criteria Emissions
                                      0.6
                                      1.1
                                      1.3
                                      1.6
                   Technology Costs vs. No-Action ($billion)
Incremental Cost
                                      2.5
                                      5.0
                                      7.2
                                      9.7
Additional Costs
                                      0.5
                                      1.0
                                      1.5
                                      2.0
                        Benefit Cost Summary ($billion)
Total Social Cost
                                      3.3
                                      6.8
                                      9.5
                                     13.0
Total Social Benefit
                                     13.9
                                     22.7
                                     27.4
                                     31.7
Net Social Benefit
                                     10.6
                                     15.9
                                     17.9
                                     18.7
          [*]All dollar values are discounted at a rate of 3 percent per year from the time of purchase.
          [a] Using the 3% average social cost of CO2 value. There are four distinct social cost of CO2 values presented in the Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866 (2010 and 2013). The CO2 emissions presented here would be valued lower with one of those other three values and higher at the other two values.
Table VI-28 provides a summary of benefits and costs, cumulative from MY2015  -  MY2029 (although the early years of the series typically have no incremental costs and benefits over the baseline), for each alternative.  In the social perspective, fuel savings are considered net of fuel taxes, which are a transfer from purchasers of fuel to society at large.  The energy security component represents the risk premium associated with exposure to oil price spikes and the economic consequences of adapting to them.  This externality is monetized on a per-gallon basis, just as the social cost of carbon is used in this analysis.  Just as the previous two externalities are caused by fuel consumption, others are caused by travel itself.  The additional VMT resulting from the increase in travel demand that occurs when the price of driving decreases (i.e. the rebound effect), not only leads to increased mobility (which is a benefit to drivers), but also to increases in congestion, noise, accidents, and per-mile emissions of criteria pollutants like carbon monoxide and diesel particulates.  Although increases in VMT lead to increases in tailpipe emissions of criteria pollutants, the proposed regulations decrease overall consumption enough that the emissions reductions associated with the remainder of the fuel cycle (extraction, refining, transportation and distribution) are large enough to create a net reduction in the emissions of criteria pollutants (shown below in Table VI-29 and VI-30).  A full presentation of the costs and benefits, and the considerations that have gone into each cost and benefit category -- such as how energy security premiums were developed, how the social costs of carbon and co-pollutant benefits were developed, etc. -- is presented in Section IX of this preamble and in Chapters 7 and 8 of the draft RIA for each regulated segment (engines, HD pickups and vans, vocational vehicles, tractors and trailers).
Another side effect of increased VMT is the likely increase in traffic fatalities, which is a function of the total vehicle travel in each year.  As Table VI-28 illustrates, the positive social cost associated with traffic fatalities is the result of an additional -10 (implying that Alternative 2 actually leads to a reduction in fatalities over the baseline, due to the application of mass reduction technologies), 35, 36, and 66 fatalities for Alternatives 2-5, respectively.  To put those numbers in context, the baseline contains nearly 25,000 fatalities attributable to 2b/3 vehicles over the same period.  The incremental fatalities associated with the alternatives translate to less than -0.4, 0.1, 0.1, and 0.3 percent increases over the MY2015-2029 baseline, respectively.
One notable facet of Table VI-28  is that while consumer benefits are also social benefits, the external portions of the net benefits to society (composed of reductions in CO2 emissions, improved energy security, congestion, accidents, noise, and criteria pollutant emissions) are smaller than the total technology cost in each alternative -- at least when valuing CO2 emissions using the 3 percent average SCC value and not including the value of other GHGs being reduced.  In the case of the more stringent alternatives, they sum to only about half the technology cost, whereas pretax fuel savings, alone, are considerably greater than technology costs for each regulatory alternative.  Therefore, while any of the regulatory alternatives considered today would be cost-beneficial considering all the benefits and costs, none would be cost-beneficial considering only economic and environmental externalities.
The CAFE model was used to estimate the emissions impacts of the various alternatives that are the result of lower fuel consumption, but increased vehicle miles traveled for vehicle produced in model years subject to the standards in the alternatives. Criteria pollutants are largely the result of vehicle use, and accrue on a per-mile-of-travel basis, but the alternatives still generally lead to emissions reductions.  Although vehicle use increases under each of the alternatives, upstream emissions associated with fuel refining, transportation and distribution are reduced for each gallon of fuel saved and that savings is larger than the incremental increase in emissions associated with increased travel.  The net of the two factors is a savings of criteria (and other) pollutant emissions.
Table VI-29 Summary of Environmental Impacts Through MY2029 in the HD Pickup and Van Market Segment, using Method A and versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                     2.0%
                                     2.5%
                                     3.5%
                                     4.0%
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
              Greenhouse Gas Emissions  vs. No-Action Alternative
CO2 (MMT)
                                      54
                                      91
                                      110
                                      127
CH4 and N2O (tons)
                                    65,600
                                    111,400
                                    133,700
                                    155,300
               Other Emissions vs. No-Action Alternative (tons)
CO
                                    10,400
                                    20,700
                                    25,800
                                    30,400
VOC and NOx
                                    23,800
                                    43,600
                                    53,500
                                    62,200
PM
                                     1,470
                                     2,550
                                     3,090
                                     3,590
SO2
                                    11,400
                                    19,900
                                    24,100
                                    28,000
Air Toxics
                                      44
                                      47
                                      49
                                      55
Diesel PM10
                                     2,470
                                     4,350
                                     5,300
                                     6,160
            Other Emissions vs. No-Action Alternative (% reduction)
CO
                                      0.1
                                      0.3
                                      0.4
                                      0.4
VOC and NOx
                                      1.1
                                      2.1
                                      2.6
                                      3.0
PM
                                      1.7
                                      3.0
                                      3.6
                                      4.2
SO2
                                      2.9
                                      5.1
                                      6.2
                                      7.2
Air Toxics
                                      0.1
                                      0.1
                                      0.1
                                      0.2
Diesel PM10
                                      2.7
                                      4.8
                                      5.9
                                      6.8
In addition to comparing environmental impacts of the alternatives against a dynamic baseline that shows some improvement over time, compared to today's fleet, even in the absence of the alternatives, the environmental impacts from the Method A analysis were compared against a flat baseline.  This other comparison is summarized below, but both comparisons are discussed in greater detail in the Draft EIS.
Table VI-30 Summary of Environmental Impacts Through MY2029 in the HD Pickup and Van Market Segment, using Method A and versus the Flat Baseline, Alternative 1a
                                  Alternative
                                       2
                                       3
                                       4
                                       5
                          Annual Stringency Increase
                                     2.0%
                                     2.5%
                                     3.5%
                                     4.0%
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
              Greenhouse Gas Emissions  vs. No-Action Alternative
CO2 (MMT)
                                      66
                                      105
                                      127
                                      142
CH4 and N2O (tons)
                                    79,700
                                    127,400
                                    154,800
                                    172,800
               Other Emissions vs. No-Action Alternative (tons)
CO
                                    11,630
                                    22,160
                                    28,030
                                    32,370
VOC and NOx
                                    28,280
                                    48,770
                                    60,180
                                    68,050
PM
                                     1,780
                                     2,900
                                     3,550