suggested that the agencies should have required more improvements in
the largest trucks rather than implementing the curve adjustments and
technology incentives proposed for those vehicles. Many of these
commenters focused on the relative burden of the standards on small
trucks versus large trucks, or on

the burden on cars versus on trucks. VW, for example, commented that
the lower stringency for larger trucks,\1240\ ``combined with segment-
exclusive credit opportunities has the potential to distort the future
light duty market,'' and that even if the agencies are correct that
``work trucks have special needs,'' ``the agencies could have still
created a regulation that was more equitable with equal stringency for
cars and trucks.'' \1241\ VW suggested that both the car and the truck
standards should increase at roughly 4 percent/year, and that
manufacturers who struggle with the truck standards could simply over-
comply with the car standards and transfer credits.\1242\ Nissan, in
contrast, stated that it would not be feasible to rely on transfers of
car credits to cover truck fleet shortfalls under CAFE, since EISA
limits the amount of credits that can be transferred in a given
year.\1243\ VW stated that the difference in stringency between trucks
and cars ``may disproportionately drive cost into passenger cars versus
trucks and may ultimately discourage customer consideration of lower
CO2-emitting passenger cars,'' which VW stated ``seems
counterintuitive to environmental and energy goals.'' \1244\ Sierra
Club \1245\ and CBD \1246\ provided similar comments. VW suggested that
the agencies may have underestimated the domestic manufacturers' future
truck share.\1247\
---------------------------------------------------------------------------

    \1240\ VW stated that while EPA described the average annual
truck stringency increase as 3.5 percent/year, the increase for the
larger trucks was 1 percent or less in the first several years of
the program. Id. at 20-21.
    \1241\ Id. at 8-9.
    \1242\ Id.
    \1243\ Nissan, Docket No. EPA-HQ-OAR-2010-0799-9471, at 8.
    \1244\ VW at 9.
    \1245\ Sierra Club et al., Docket No. EPA-HQ-OAR-2010-0799-9549,
at 6.
    \1246\ CBD, Docket No. NHTSA-2010-0131-0255, at 13.
    \1247\ VW at 12.
---------------------------------------------------------------------------

    Toyota \1248\ and Honda objected to the relative stringency of the
truck curve for small trucks as compared to large trucks, with Honda
stating that based on its review of EPA's analysis, a small footprint
light truck like a Honda CR-V and a large truck like a Ford F150 may
receive similar technology ``packages'' at similar costs, but based on
the target curves, the small truck's proposed target would require an
18 percent increase in stringency, while the large truck's target would
require an increase of less than 5 percent.\1249\ Consumers Union took
a slightly different approach, arguing that while it is
``counterintuitive and counterproductive to let the least fuel
efficient models improve more slowly than more efficient models,'' the
light truck curve should be made more stringent overall: not just for
larger light trucks, but also for smaller light trucks (more similar to
the car standards), so that manufacturers of CUVs are not encouraged to
reclassify cars as trucks.\1250\
---------------------------------------------------------------------------

    \1248\ Toyota, Docket No. EPA-HQ-OAR-2010-0799-9586, at 5.
    \1249\ Honda, Docket No. NHTSA-2010-0131-0239, at 1.
    \1250\ Consumers Union, Docket No. EPA-HQ-OAR-2010-0799-9454, at
6.
---------------------------------------------------------------------------

    CBD commented that the proposed standards ``substantially and
improperly favor light trucks, particularly the largest and least fuel
efficient trucks,'' and argued that the shape of the curves and the
rate of increase of the truck standards would encourage manufacturers
to build more and larger trucks, thus undermining the goals of the
program.\1251\ NACAA expressed similar concern.\1252\ CBD stated that
the Ricardo analysis of technology effectiveness showed that
manufacturers should be capable of improving the fuel economy of their
large trucks while maintaining towing and hauling, so the agencies
should not cite the need to preserve truck utility in setting the truck
standards, and that since big trucks are the most profitable vehicles,
the cost of applying technology should not be a factor for the agencies
in determining the rate of stringency increase for those
vehicles.\1253\ CBD argued that the light truck curve should increase
at the same rate as the passenger car curve in order to ``comport with
Congressional intent'' that the standards be ratable and conserve
energy.\1254\
---------------------------------------------------------------------------

    \1251\ CBD, Docket No. NHTSA-2010-0131-0255, at 9-10.
    \1252\ NACAA, Docket No. EPA-HQ-OAR-2010-0799-8084, at 3.
    \1253\ CBD at 11-12.
    \1254\ Id. at 14.
---------------------------------------------------------------------------

    In contrast, some commenters described the MYs 2022-2025 targets
for the largest light trucks as especially challenging, arguing that
the cost feasibility of applying the advanced technologies necessary to
meet the standards in that time frame may be limited, given the cost
sensitivity of buyers in that market segment, and suggesting that sales
may be impacted.\1255\ Ford provided extensive comments on the utility
requirements of large trucks, and argued that consumers who purchase
these trucks do so for the utility, and consumers who purchase these
trucks without a need for the utility will dwindle over the rulemaking
timeframe.\1256\
---------------------------------------------------------------------------

    \1255\ Nissan, Docket No. EPA-HQ-OAR-2010-0799-9471, at 8; RVIA,
Docket No. EPA-HQ-OAR-2010-0799-9550, at 1-2.
    \1256\ Ford, Docket No. NHTSA-2010-0131-0235, at 9.
---------------------------------------------------------------------------

    And finally, a number of industry commenters commented that NHTSA's
standards would harmonize better with EPA's standards if NHTSA allowed
additional credit flexibilities or modified its curves to make the
standards less difficult in case manufacturers were relying heavily on
the flexibilities provided by EPA. For example, the Alliance argued
that because NHTSA does not offer certain flexibilities that EPA
offers, ``While the impact of the program differences is relatively
small in the early years of the program, it will increase with the
passage of time, particularly as manufacturers rely more and more on
vehicle electrification in order to comply with the standards.'' \1257\
The Alliance further stated that ``Unless this imbalance is corrected,
it will result in significant disharmony in the middle and later years
of the time period covered by this proposal.'' \1258\ Toyota provided
similar comments; \1259\ GM supported the Alliance comments.\1260\
---------------------------------------------------------------------------

    \1257\ Alliance, Docket No. NHTSA-2010-0131-0262, at 14-15.
    \1258\ Id. at 15.
    \1259\ Toyota, Docket No. EPA-HQ-OAR-2010-0799-9586, at 6
    \1260\ GM, Docket No. NHTSA-2010-0131-0236, at 2.
---------------------------------------------------------------------------

5. How has the agency balanced the factors for this final rule?
a. What alternatives did the agency consider, and why?
    The relevant factors (and thus the weight given to each factor) can
be balanced in many different ways depending on the agency's policy
priorities and on the information before the agency regarding any given
model year. The agency thus considered a range of alternatives that
represent different regulatory options that seemed potentially
reasonable for purposes of this rulemaking. For this final rule, as for
the proposal, the agency considered nine regulatory alternatives,
including what we describe as the ``preferred alternative'' in the
Draft and Final EIS, which is what the agency proposed and is
finalizing. The other regulatory alternatives include six in which fuel
economy levels increase annually, on average, at set rates as follows:
     2%/year,
     3%/year,
     4%/year,
     5%/year,
     6%/year, and

     7%/year.\1261\
---------------------------------------------------------------------------

    \1261\ This is an approach similar to that used by the agency in
the MY 2012-2016 rulemaking, in which we also considered several
alternatives that increased annually, on average, at 3%, 4%, 5%, 6%
and 7%/year. The ``percent-per-year'' alternatives in this proposal
are somewhat different from those considered in the MY 2012-2016
rulemaking, however, in terms of how the annual rate of increase is
applied. For this final rule, as for the proposal, the stringency
curves are themselves advanced directly by the annual increase
amount, without reference to any yearly changes in the fleet mix. In
the 2012-2016 rule, the annual increases for the stringency
alternatives reflected the estimated required fuel economy of the
fleet which accounted for both the changes in the target curves and
changes in the fleet mix.
---------------------------------------------------------------------------

    We considered these alternatives because analysis of these various
rates of increase effectively encompasses the entire range of fuel
economy improvements that, based on information currently available to
the agency, could conceivably fall within the statutory boundary of
``maximum feasible'' standards. The regulatory alternatives also
include two that are based on benefit-cost criteria: one in which
standards would be set at the point where the modeled net benefits
would be maximized for each fleet in each year (``MNB''), and another
in which standards would be set at the point at which total costs would
be most nearly equal to total benefits for each fleet in each year
(``TC=TB'').\1262\ These alternatives are discussed in more detail in
Chapter III of the FRIA accompanying this final rule.\1263\ Because the
agency could conceivably select any of the regulatory alternatives
above, all of which fall between 2%/year and 7%/year, inclusive, the
Final EIS that informed this final rule analyzes these lower and upper
bounds as well as the preferred alternative. Additionally, the Final
EIS analyzes a ``No Action Alternative,'' which assumes that, for MYs
2017 and beyond, NHTSA would set standards at the same level as MY
2016. The No Action Alternative provides a baseline for comparing the
environmental impacts of the other alternatives.
---------------------------------------------------------------------------

    \1262\ We included the MNB and TC=TB alternatives in part for
the reference of commenters familiar with NHTSA's past several CAFE
rulemakings--these alternatives represent balancings carefully
considered by the agency in past rulemaking actions as potentially
maximum feasible--and because Executive Orders 12866 and 13563 focus
attention on an approach that maximizes net benefits. The assessment
of maximum net benefits is challenging in the context of setting
CAFE standards, in part because standards which maximize net
benefits for each fleet, for each model year, would not necessarily
be the standards that lead to the greatest net benefits over the
entire rulemaking period.
    \1263\ Chapter III of the FRIA contains an extensive discussion
of the relative impacts of the alternatives in terms of fuel
savings, costs (both per-vehicle and aggregate), carbon dioxide
emissions avoided, and many other metrics.
---------------------------------------------------------------------------

    This approach to selecting regulatory alternatives clearly
communicates the level of stringency of each alternative and allows us
to identify alternatives that would represent different ways to balance
the relevant factors. Each of the alternatives represents, in part, a
different way in which NHTSA could conceivably balance different
policies and considerations in setting the standards that achieve the
maximum feasible levels. For example, the 2% Alternative, the least
stringent alternative, (other than No Action), would represent a
balancing in which economic practicability--which include concerns
about availability of technology, capital, and consumer preferences for
vehicles built to meet the future standards--weighs more heavily in the
agency's consideration, and other factors weigh less heavily. In
contrast, under the 7% Alternative, one of the most stringent, the need
of the nation to conserve energy--which includes energy conservation
and climate change considerations--would weigh more heavily in the
agency's consideration, and other factors would weigh less heavily.
Whether different alternatives may be maximum feasible can also be
influenced by differences and uncertainties in the way in which key
economic factors (e.g., the price of fuel and the social cost of
carbon) and technological inputs could be assessed and valued. While
NHTSA believes that our analysis for this final rule uses the best and
most transparent technology-related inputs and economic assumption
inputs that the agencies could derive for MYs 2017-2025, we recognize
that there is uncertainty in these inputs, and the balancing could be
different if the inputs were different. When the agency undertakes the
future rulemaking to develop final standards for MYs 2022-2025, for
example, we expect that much new information will inform that future
analysis, which may potentially lead us to choose different standards
than the augural ones presented today.\1264\
---------------------------------------------------------------------------

    \1264\ We emphasize, nevertheless, that the augural standards
for MYs 2022-2025 represent the agency's best judgment of what
standards would be maximum feasible for those model years, based on
the information before us today, if the agency had authority to set
standards for 9 model years at a time.
---------------------------------------------------------------------------

    This is the first CAFE rulemaking in which the agency has looked
this far into the future, which makes our traditional approach to
balancing more challenging than in past (even recent past) rulemakings.
The following discussion explains what we believe each factor means in
the context of this rulemaking, and how the agency therefore balanced
the factors for determining the maximum feasible final and augural
passenger car and light truck standards.
b. What does technological feasibility mean in the context of this
rulemaking?
    Technological feasibility, as the agency defines it, is less
constraining in this rulemaking than it has been in the past in light
of the rulemaking time frame. ``Technological feasibility'' refers to
whether a particular method of improving fuel economy can be available
for commercial application in the model year for which a standard is
being established. In previous CAFE rulemakings, it has been more
difficult for the agency to say that the most advanced technologies
would be available for commercial application in the model years in
question. For this longer term rulemaking, NHTSA has considered all
types of technologies that improve real-world fuel economy, including
air-conditioner efficiency and other off-cycle technology, PHEVs, EVs,
and highly-advanced internal combustion engines not yet in production.
The agencies expect all of these to be commercially applicable by the
rulemaking time frame. In terms of what would be technologically
feasible, then, on the one hand, we recognize that some technologies
that currently have limited commercial use cannot be deployed on every
vehicle model in MY 2017, but require a realistic schedule for
widespread commercialization to be feasible. On the other hand,
however, based on our analysis, all of the alternatives appear as
though they could narrowly be considered technologically feasible, in
that they could be achieved based on the existence or projected future
existence of technologies that could be incorporated on future
vehicles. Any of the alternatives could thus be achieved on a technical
basis alone if the level of resources that might be required to
implement the technologies is not considered. If all alternatives are
at least theoretically technologically feasible in the MY 2017-2025
timeframe, and the need of the nation is best served by pushing
standards as stringent as possible, then the agency might be inclined
to select the alternative that results in the very most stringent
standards considered.
    Many commenters agreed with this assessment, and urged the agency
to set more stringent standards than those we proposed. If the
technology exists or is projected to exist, and if the agency's
assessment is that benefits (fuel savings and emissions avoided) only
increase as

stringency increases, why would the most stringent standards assessed
not be maximum feasible? The reason they might not is that the agency
must also consider what is required to practically implement
technologies, which is part of economic practicability, and to which
the most stringent alternatives give little weight.
c. What does economic practicability mean in the context of this
rulemaking?
    ``Economic practicability'' refers to whether a standard is one
``within the financial capability of the industry, but not so stringent
as to lead to adverse economic consequences, such as a significant loss
of jobs or the unreasonable elimination of consumer choice.'' Consumer
acceptability is also an element of economic practicability, one that
is particularly difficult to gauge during times of uncertain fuel
prices.\1265\ In a rulemaking such as this, determining economic
practicability requires consideration of the uncertainty surrounding
relatively distant future market conditions and consumer demand for
fuel economy in addition to other vehicle attributes. In an attempt to
evaluate the economic practicability of attribute-based standards,
NHTSA includes a variety of factors in its modeling analysis, including
the annual rate at which manufacturers can increase the percentage of
their fleet that employ a particular type of fuel-saving technology,
the specific fleet mixes of different manufacturers, and assumptions
about the cost of the standards to consumers and consumers' valuation
of fuel economy, among other things. Ensuring that a reasonable amount
of lead time exists to make capital investments and to devote the
resources and time to design and prepare for commercial production of a
more fuel efficient fleet is also relevant. Yet there are some aspects
of economic practicability that the agency's analysis is not able to
capture at this time--for example, the computer model that we use to
analyze alternative standards does not account for all aspects of
uncertainty, in part because the agency cannot know what cannot be
known. The agency must thus account for uncertainty in the context of
economic practicability in other ways as best as we can, given the
entire record before us.
---------------------------------------------------------------------------

    \1265\ See, e.g., Center for Auto Safety v. NHTSA (CAS), 793
F.2d 1322 (D.C. Cir. 1986) (Administrator's consideration of market
demand as component of economic practicability found to be
reasonable).
---------------------------------------------------------------------------

    The agency does not believe that there is necessarily a bright-line
test for whether a regulatory alternative is economically practicable,
but there are several metrics that we discuss below that we find useful
for making the assessment, as follows:
     Compliance ``shortfalls''--The difference between the
required fuel economy level that applies to a manufacturer's fleet and
the level of fuel economy that the agency projects the manufacturer
would achieve in that year, based on our analysis, is called a
``compliance shortfall.'' \1266\ If it appears, in our modeling
analysis, that a significant portion of the industry cannot meet the
standards defined by a regulatory alternative in a model year, given
that our modeling analysis accounts for manufacturers' expected ability
to design, produce, and sell vehicles (through redesign cycle cadence,
technology costs and benefits, etc.), then that suggests that the
standards may not be economically practicable.
---------------------------------------------------------------------------

    \1266\ The agency's modeling estimates how the application of
technologies could increase vehicle costs, reduce fuel consumption,
and reduce CO2 emissions, and affect other factors. In
response to comments suggesting that the agency mandate higher
levels of certain technologies, such as mass reduction, as CAFE
standards are performance-based, NHTSA does not mandate that
specific technologies be used for compliance. CAFE modeling,
therefore projects one way that manufacturers could comply.
Manufacturers may choose a different mix of technologies based on
their unique circumstances and products.
---------------------------------------------------------------------------

     Application rate of technologies--even if shortfalls are
not extensive, whether it appears that a regulatory alternative would
impose undue burden on manufacturers in either or both the near and
long term in terms of how much and which technologies might be
required. For example, NHTSA currently estimates that the cumulative
effect of CAFE standards promulgated under the previous and current
administrations will require considerable technology and cost beyond
that reflected by technology present in the most recent fleet (MY 2010)
for which complete transparent information is available.
     Other technology-related considerations--related to the
application rate of technologies, whether it appears that the burden on
several or more manufacturers might cause them to respond to the
standards in ways that compromise, for example, vehicle safety, or
other aspects of performance that are important to consumer acceptance
of new products.
     Cost of meeting the standards--even if the technology
exists and it appears that manufacturers can apply it consistent with
their product cadence, if meeting the standards will raise per-vehicle
cost more than we believe consumers are likely to accept, which could
negatively impact sales and employment in this sector, the standards
may not be economically practicable.
     Uncertainty and consumer acceptance of technologies--
considerations not accounted for expressly in our modeling analysis,
but important to an assessment of economic practicability given the
time frame of this rulemaking.
    We discuss below how some of the alternatives compare in terms of
these metrics.
d. What do other motor vehicle standards of the government mean in the
context of this rulemaking?
    As discussed in Section IV.D above, ``other motor vehicle standards
of the government'' involves an analysis of the effects of compliance
with emission, safety, noise, or damageability standards on fuel
economy capability and thus on average fuel economy. In addition to the
expected and possible NHTSA safety standards and known EPA emissions
standards, in developing this joint final rule with EPA, NHTSA has also
sought to harmonize the final and augural standards with EPA's.
e. What does the need of the nation to conserve energy mean in the
context of this rulemaking?
    ``The need of the United States to conserve energy'' means ``the
consumer cost, national balance of payments, environmental, and foreign
policy implications of our need for large quantities of petroleum,
especially imported petroleum.'' Environmental implications principally
include those associated with reductions in emissions of criteria
pollutants, mobile source air toxics, and GHGs (including
CO2). NHTSA has been informed regarding the environmental
implications of the final and augural standards by the Final EIS, which
analyzes the environmental impacts of the regulatory alternatives
discussed above. A prime example of foreign policy implications are
energy independence and energy security concerns.
    A number of commenters raised environmental and energy security
concerns as paramount for the agency's consideration, and urged the
agency both to quantify impacts related to these concerns and to set as
stringent standards as possible to address them. The need of the nation
to conserve energy has long operated to push the balancing toward more
stringent standards, given that the overarching purpose of EPCA is
energy conservation.

In this final rule, then, the question raised by this factor, combined
with technological feasibility, becomes ``how stringent can NHTSA set
standards before economic practicability concerns intercede?''
f. Given what the factors mean in the context of this rulemaking, which
alternative is maximum feasible for the final standards, and why?
    If the need of the nation to conserve energy always pushes the
balancing toward greater stringency and technological feasibility is
not particularly limiting in a given rulemaking, then maximum feasible
standards would be represented by the mpg levels that we could require
of the industry before we reach a tipping point that presents risk of
significantly adverse economic consequences. While determination of
that tipping point is within the agency's discretion to balance the
relevant factors, standards that are lower than that point would likely
not be maximum feasible, because such standards would leave fuel-saving
technologies on the table unnecessarily; standards that are higher than
that point would likely be beyond what the agency would consider
economically practicable, and therefore beyond what we would consider
maximum feasible, even if they might be technologically feasible or
better meet the need of the nation to conserve energy. The agency does
not believe that standards are balanced if they weight one or two
factors so heavily as to ignore another.
    The question of the tipping point is slightly different in the
context of the final standards and augural standards. The final
standards for MYs 2017-2021 are nearer-term, albeit still several years
away; the augural standards for MYs 2022-2025, clearly, are even more
distant, and the inputs that inform our balancing are less certain.
Based on the information currently before the agency, we continue to
believe that the standards as proposed are maximum feasible for MYs
2017-2025.
    For the final standards, the annual rate of increase in the
passenger car and light truck standards is as follows (in terms of
average required fuel economy levels estimated using the MY 2010-based
market forecast):

   Table IV-24--NHTSA Annual Rate of Increase in the Stringency of the
          Final Standards for Each Model Year From 2017 to 2021
------------------------------------------------------------------------
                                           Passenger car    Light truck
               Model year                    (percent)       (percent)
------------------------------------------------------------------------
2017....................................             3.7             0.6
2018....................................             3.6             1.7
2019....................................             3.6             1.5
2020....................................             3.9             2.1
2021....................................             4.2             6.5
2017-2021...............................             3.8             2.5
------------------------------------------------------------------------

    For the augural standards, the annual rate of increase in the
passenger car and light truck standards is as follows:

   Table IV-25--NHTSA Annual Rate of Increase in the Stringency of the
         Augural Standards for Each Model Year From 2022 to 2025
------------------------------------------------------------------------
                                           Passenger car    Light truck
               Model year                    (percent)       (percent)
------------------------------------------------------------------------
2022....................................             4.8             4.9
2023....................................             4.6             4.7
2024....................................             4.7             4.8
2025....................................             4.7             4.8
------------------------------------------------------------------------

    As the tables show, in terms of the average rate of increase over
the MYs 2017-2021 period, the final passenger car standards fall
between the 3/yr and 4/yr alternatives, while the final light truck
standards fall between the 2/yr and the 3/yr alternatives. The average
rate of increase for the augural passenger car and light truck
standards for MYs 2022-2025 falls between the 4/y and 5/y alternatives.
    The overall average annual rate of increase over the different
periods covered by this rulemaking, for the reader's reference, is thus
as follows:

   Table IV-26--NHTSA Annual Rate of Increase in the Stringency of the
            Final and Augural Standards Over Various Periods
------------------------------------------------------------------------
                                           Passenger car    Light truck
               Model years                   (percent)       (percent)
------------------------------------------------------------------------
2017-2021...............................             3.8             2.5
2022-2025...............................             4.7             4.8
2017-2025...............................             4.2             3.5
------------------------------------------------------------------------

    Part of the way that we try to evaluate economic practicability,
and thus where the tipping point in the balancing of factors might be
for a given model year, is through a variety of model inputs, such as
phase-in caps (the annual rate at which we estimate that manufacturers
can increase the percentage of their fleet that employ a particular
type of fuel-saving technology) and redesign schedules to account for
needed lead time. These inputs limit how much technology can be applied
to a manufacturer's fleet in the agency's analysis, which attempts to
simulate a way for the manufacturer to comply with different regulatory
alternatives. If a sufficient number of manufacturers do not appear
able to meet the standards in a given model year; if the amounts of
technology or per-vehicle cost increases required to meet the standards
appear to be beyond what we believe the market would bear, or if the
limits (and technology cost-effectiveness) prevent enough manufacturers
from meeting the required levels of stringency,\1267\ the agency may
decide that the standards under consideration may not be economically
practicable. We underscore again that the modeling analysis does not
dictate the ``answer,'' it is merely one source of information among
others that aids the agency's balancing of the standards.
---------------------------------------------------------------------------

    \1267\ The difference between the required fuel economy level
that applies to a manufacturer's fleet and the level of fuel economy
that the agency projects the manufacturer would achieve in that
year, based on our analysis, is called a ``compliance shortfall.''
The agency's modeling estimates how the application of technologies
could increase vehicle costs, reduce fuel consumption, and reduce
CO2 emissions, and affect other factors. In response to
comments suggesting that the agency mandate higher levels of certain
technologies, such as mass reduction, as CAFE standards are
performance-based, NHTSA does not mandate that specific technologies
be used for compliance. CAFE modeling, therefore projects one way
that manufacturers could comply. Manufacturers may choose a
different mix of technologies based on their unique circumstances
and products.
---------------------------------------------------------------------------

g. Compliance Shortfalls
    In looking at the projected compliance shortfall results from our
modeling analysis, the agency concludes, based on the information
before us at the time, that for both passenger car and for light
trucks, the MNB and TC=TB alternatives, 6/Year and 7/Year alternatives
do not appear to be economically practicable, and are thus likely
beyond maximum feasible levels for MYs 2017-2025. In other words,
despite the theoretical technological feasibility of achieving these
levels, various manufacturers would likely lack the financial and
engineering resources and sufficient lead time to do so.\1268\
---------------------------------------------------------------------------

    \1268\ Lead time is incorporated into our modeling analysis
through redesign/refresh schedules, phase-in caps, estimates of the
first model year by which some technologies (e.g., high BMEP
engines) are assumed to be available for commercial application,
consideration of stranded capital costs, and representation of
multi-year planning effects. However, there are many factors related
to lead time that, though considered generally when specifying
phase-in caps, we are not able to represent explicitly, and that
introduce uncertainty and risk vis-[agrave]-vis the rate at which
CAFE standards can feasibly be increased. Examples include, but are
not limited to the following: availability and cost of capital,
supply and cost of engineering and other labor resources, capability
and extent of supporting infrastructure (e.g., maintenance and
repair facilities), and consumer acceptance.
---------------------------------------------------------------------------

    For purposes of passenger cars, the agency's analysis indicates the
following levels of compliance shortfall, by manufacturer and by model
year, for the following regulatory alternatives (a dash indicating
cases where the manufacturer exceeds a standard):

           Table IV-27--NHTSA--Estimated Annual Compliance Shortfalls (mpg) for Passenger Cars by Manufacturer Under the Preferred Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................  .........        0.0  .........  .........  .........  .........  .........  .........        0.0
Ford.................................................  .........  .........  .........  .........  .........  .........  .........        0.0        0.0
General Motors.......................................  .........  .........  .........  .........  .........  .........  .........        0.0  .........
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
Hyundai..............................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
Kia..................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Mazda................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Mitsubishi...........................................  .........  .........        0.5  .........  .........  .........  .........  .........        0.8
Nissan...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Subaru...............................................        1.9        2.6  .........  .........  .........        0.1        1.7  .........  .........
Suzuki...............................................  .........  .........  .........  .........  .........  .........  .........        1.1        0.0
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

              Table IV-28--NHTSA Estimated Annual Compliance Shortfalls (mpg) for Passenger Cars by Manufacturer Under the 5%/y Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................  .........  .........  .........  .........  .........  .........        0.0        2.5        0.2
Ford.................................................  .........  .........  .........  .........  .........  .........        2.1  .........        0.3
General Motors.......................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
Hyundai..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Kia..................................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
Mazda................................................  .........  .........  .........  .........        0.0  .........  .........  .........        2.6
Mitsubishi...........................................  .........        0.5        2.8  .........  .........        0.8        3.8        6.9        1.7
Nissan...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Subaru...............................................        2.6        4.0        0.7  .........        0.9        3.8        6.0        8.3        9.0
Suzuki...............................................  .........  .........  .........  .........  .........  .........  .........  .........        0.5
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

              Table IV-29--NHTSA Estimated Annual Compliance Shortfalls (mpg) for Passenger Cars by Manufacturer Under the 6%/y Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................  .........  .........  .........  .........        0.1        3.2        5.4        8.8        7.7
Ford.................................................  .........  .........  .........  .........        0.3        2.9        6.3        4.2        6.6
General Motors.......................................  .........  .........  .........  .........  .........        0.8        3.9        6.5        6.7
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........        1.3
Hyundai..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Kia..................................................  .........  .........  .........  .........  .........  .........  .........        0.8        2.9
Mazda................................................  .........  .........  .........  .........        0.8        1.1        3.6        7.2        0.7
Mitsubishi...........................................  .........        1.5        4.4  .........  .........        0.1        3.9        8.0       12.1
Nissan...............................................  .........  .........  .........  .........  .........  .........        1.6        2.8        6.1
Subaru...............................................        3.0        5.0        2.3        0.4        3.8        7.4       10.5       13.8       15.6
Suzuki...............................................  .........  .........  .........  .........  .........  .........        0.9        5.1        7.8
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

            Table IV-30--NHTSA Estimated Annual Compliance Shortfalls (mpg) for Passenger Cars by Manufacturer Under the ``MNB'' Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................        1.4        2.2        1.0  .........  .........        0.3  .........  .........        0.0
Ford.................................................        0.3        2.4        2.4        0.1        0.9        0.2        1.0  .........        0.0
General Motors.......................................        1.9        0.4        1.9  .........  .........  .........  .........  .........        0.0
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Hyundai..............................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
Kia..................................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
Mazda................................................        0.0        1.4        2.8  .........  .........  .........  .........  .........  .........
Mitsubishi...........................................        2.6        5.2        7.5  .........  .........  .........  .........        1.9        2.6
Nissan...............................................  .........        0.0  .........  .........  .........  .........        0.0  .........        0.0
Subaru...............................................        7.0        8.7        5.3        1.9        3.3        4.2        4.6        6.2        5.8
Suzuki...............................................  .........        2.3  .........  .........  .........  .........        0.0        2.4        2.2
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

           Table IV-31--NHTSA Estimated Annual Compliance Shortfalls (mpg) for Passenger Cars by Manufacturer Under the ``TC=TB'' Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................        2.1        2.5        1.0  .........        0.4        1.7  .........        1.2        0.4
Ford.................................................        1.0        2.6        2.4        0.1        1.4        1.6        2.7        1.8        1.1
General Motors.......................................        2.6        0.6        1.9  .........  .........        0.7  .........        0.5  .........
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Hyundai..............................................  .........  .........  .........        0.0  .........  .........  .........  .........  .........
Kia..................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Mazda................................................        0.7        1.6        2.8  .........  .........  .........  .........  .........        0.0
Mitsubishi...........................................        3.3        5.5        7.5  .........  .........  .........        0.5        3.5        4.2
Nissan...............................................  .........        0.1  .........  .........  .........  .........        0.8  .........        0.8
Subaru...............................................        7.7        8.9        5.3        1.9        3.9        5.7        6.4        8.6        8.3
Suzuki...............................................        0.5        2.5  .........  .........  .........        0.9        1.7        4.8        4.8
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Thus, for alternatives that increase at 6%/y and faster, the
majority of the industry would face compliance shortfalls for passenger
cars, according to our analysis, which seems to indicate economic
impracticability.\1269\ Standards that increase less rapidly, such as
under the 5%/y and slower alternatives, thus remain under consideration
for being economically practicable for passenger cars. We note that the
maximizing net benefits alternative, while showing relatively little
shortfalling by industry in later years of the rulemaking time frame,
shows considerable shortfalling for a number of major manufacturers'
passenger car fleets early in the program. This is due to the fact that
the maximizing net benefits standards are fairly front-loaded and
require more rapid increases at first, which we believe would be
exceedingly difficult for manufacturers following the challenging MYs
2012-2016 standards, as discussed further below,\1270\ and likely
beyond economically practicable levels.
---------------------------------------------------------------------------

    \1269\ We note here that even if manufacturers could conceivably
comply through use of credits, the agency is barred by statute from
considering availability of credits in the determination of maximum
feasible standards.
    \1270\ It should be noted that in discussing the MYs 2012-2016
standards, NHTSA is not reconsidering those standards. Rather,
NHTSA's analysis of today's post-MY 2016 standards considers impacts
the baseline standards could have after MY 2016, as well as impacts
today's post-MY 2016 standards could have prior to MY 2017 (due to
multiyear planning effects).
---------------------------------------------------------------------------

    For purposes of light trucks, the agency's analysis indicates the

following levels of compliance shortfall, by manufacturer and by model
year, for the following regulatory alternatives:

            Table IV-32--NHTSA Estimated Annual Compliance Shortfalls (mpg) for Light Trucks by Manufacturer Under the Preferred Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................  .........  .........  .........  .........  .........        0.5  .........  .........        0.0
Ford.................................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
General Motors.......................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
Hyundai..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Kia..................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Mazda................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Mitsubishi...........................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Nissan...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Subaru...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Suzuki...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

               Table IV-33--NHTSA Estimated Annual Compliance Shortfalls (mpg) for Light Trucks by Manufacturer Under the 5%/y Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................        0.0        1.7        2.9        2.2        3.5        5.5        1.3        3.4        4.3
Ford.................................................  .........  .........  .........  .........  .........  .........  .........        0.2        2.4
General Motors.......................................  .........        0.1  .........  .........  .........  .........        1.0        2.6        0.1
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........        0.7
Hyundai..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Kia..................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Mazda................................................        0.2  .........  .........  .........  .........  .........  .........  .........  .........
Mitsubishi...........................................  .........  .........        1.9        4.2  .........  .........  .........  .........        1.4
Nissan...............................................  .........        0.0  .........  .........  .........  .........  .........  .........        0.0
Subaru...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Suzuki...............................................  .........  .........        0.7        2.9  .........  .........        1.1        3.9        6.8
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------

               Table IV-34--NHTSA Estimated Annual Compliance Shortfalls (mpg) for Light Trucks by Manufacturer Under the 6%/y Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................        0.3        2.4        4.1        3.8        5.7        8.3        4.7        7.5        9.3
Ford.................................................  .........  .........        0.5        1.1  .........        0.2        2.8        4.8        5.3
General Motors.......................................  .........        0.8  .........  .........  .........        1.2        3.2        5.3        4.0
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........        2.8
Hyundai..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Kia..................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Mazda................................................        0.6  .........  .........  .........  .........        1.2        1.6        2.8        6.4
Mitsubishi...........................................  .........        0.7        3.3        6.1  .........  .........  .........        1.5        5.4
Nissan...............................................  .........  .........  .........  .........  .........        0.1        2.7        1.7        4.5
Subaru...............................................  .........  .........  .........  .........  .........        0.1        3.5  .........  .........
Suzuki...............................................  .........        0.2        2.1        4.9  .........        1.8        5.2        8.9       12.8
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........        2.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

             Table IV-35--NHTSA Estimated Annual Compliance Shortfalls (mpg) for Light Trucks by Manufacturer Under the ``MNB'' Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................        1.6        2.4        4.3        3.9        6.8        7.4        1.8        2.4        2.1
Ford.................................................  .........  .........        0.7        1.2  .........  .........  .........  .........  .........
General Motors.......................................        0.8        0.8  .........  .........        0.0        0.2        0.5        0.7        0.0
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Hyundai..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Kia..................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Mazda................................................        1.9  .........  .........  .........        1.0        1.7  .........  .........  .........
Mitsubishi...........................................  .........        0.7        3.5        6.2  .........  .........  .........  .........  .........
Nissan...............................................  .........        0.0  .........  .........  .........  .........  .........  .........        0.0
Subaru...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........

Suzuki...............................................  .........        0.3        2.3        5.0  .........        0.7        1.7        2.8        4.2
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

            Table IV-36--NHTSA Estimated Annual Compliance Shortfalls (mpg) for Light Trucks by Manufacturer Under the ``TC=TB'' Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Manufacturer                         2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiat.................................................        1.9        2.8        4.3        3.9        7.0        7.6        2.0        2.4        2.3
Ford.................................................  .........        0.0        0.7        1.2  .........  .........  .........        0.0  .........
General Motors.......................................        1.1        1.2  .........  .........        0.2        0.4        0.7        0.7  .........
Honda................................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
Hyundai..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Kia..................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Mazda................................................        2.3  .........  .........  .........  .........        0.1  .........  .........  .........
Mitsubishi...........................................        0.1        1.1        3.5        6.2  .........  .........  .........  .........  .........
Nissan...............................................  .........        0.0  .........  .........  .........  .........        0.0  .........        0.0
Subaru...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Suzuki...............................................  .........        0.7        2.3        5.0        0.1        0.9        2.0        2.8        4.5
Toyota...............................................  .........  .........  .........  .........  .........  .........  .........  .........        0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For light trucks, the 5%/y alternative appears to present
significant risk of several manufacturers facing shortfalls in most
model years. Thus, for alternatives that increase at 5%/y and faster,
the majority of the industry would face compliance shortfalls for light
trucks, according to our analysis, which indicates economic
impracticability. Standards that increase less rapidly, such as under
the 4%/y and slower alternatives, thus remain under consideration for
being economically practicable for light trucks. Again, we note that
the maximizing net benefits alternative, while showing relatively
little shortfalling by industry in later years of the rulemaking time
frame, shows considerable shortfalling for a number of major
manufacturers' light truck fleets early in the program. This is due to
the fact that the maximizing net benefits standards are fairly front-
loaded and require more rapid increases at first, which we believe
would be exceedingly difficult for manufacturers following the
challenging MYs 2012-2016 standards, as discussed further below, and
likely beyond economically practicable levels.
h. Application Rate of Technologies
    As discussed above, when considering the economic practicability of
a regulatory alternative in terms of how much technology manufacturers
have to apply in order to meet it, the agency must consider both which
technologies appear to be necessary and when they would have to be
applied, given manufacturers' product redesign cadence. While the need
of the nation to conserve energy encourages the agency to be more
technology-forcing in its balancing, and while technological
feasibility is arguably less limiting in this rulemaking given its time
frame, regulatory alternatives that require extensive application of
very advanced technologies (that may have known or unknown consumer
acceptance issues) or that require manufacturers to apply additional
technology in earlier model years, in which meeting the standards is
already challenging, may not be economically practicable, and thus may
be beyond maximum feasible.
    The first issue is timing of technology application. The MYs 2012-
2016 standards, in the agency's view, are feasible but challenging, and
represent some of the most rapid increases in stringency in the history
of the CAFE program. In NHTSA's judgment, technology deployment
necessitated by these baseline standards poses a considerable challenge
to the industry, at least through MY 2016. Most manufacturers indicated
during meetings with the agency that, even considering flexibilities
(e.g., FFV credits, credit transfers, and credit carry-forward) that
the agency may not consider for purposes of determining maximum
feasible stringency, CAFE standards already in place through MY 2016
will require significant application of technology and will leave some
manufacturers' reserves of CAFE credits largely depleted going into MY
2017. Tables IV-37 through IV-40 show significant additional
application of technology during those earlier model years to enable
compliance with the more stringent post-MY 2016 standards defined by
the Preferred Alternative and some of the other regulatory alternatives
the agency has considered. Many commenters noted the lead time
available in this rulemaking, since the first standards would not be
effective until MY 2017, and suggested that such ample lead time should
certainly make higher standards economically practicable in that time
frame. While consideration of future model years in isolation might
suggest manufacturers have ample lead time to make further
improvements, NHTSA does not consider model years in isolation, because
that is not consistent with how industry responds to standards, and
thus would not accurately reflect practicability. NHTSA's analysis
tries to estimate manufacturers' product ``cadence,'' representing them
in terms of estimated schedules for redesigning and ``freshening''
vehicles, and assuming that significant technology changes will be
implemented during vehicle redesigns, and that once applied, a
technology will be carried forward to future model years until
superseded by a more advanced technology. If manufacturers are already
applying technology widely and intensively to meet standards in earlier
years, requiring manufacturers to add yet more technology in those
model years in order to meet future standards may not be economically
practicable. The question is not whether a standard is economically
practicable in the model year in which the standard is effective, but
whether getting to that model year's standard (in part, through the

application of technologies in earlier model years) is economically
practicable. The tables below illustrate how the agency has modeled
that process of manufacturers applying technologies in order to comply
with different alternative standards; the technologies are described in
more detail in Section IV.D and in Chapter V of NHTSA's FRIA:

                                    Table IV-37--NHTSA Estimated Application of Selected Technologies--Passenger Cars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Technology                       Standards   2014 (%)   2015 (%)   2016 (%)   2017 (%)   2018 (%)   2019 (%)   2020 (%)   2021 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
SGDI.................................................   Baseline         10         11         13         16         18         18         18         18
                                                         2%/Year         14         20         24         30         37         40         41         42
                                                         3%/Year         17         24         32         40         48         60         63         71
                                                       Preferred         21         29         41         48         57         69         72         78
                                                         4%/Year         18         27         38         47         58         70         72         78
                                                         5%/Year         25         37         47         55         68         72         75         78
Turbocharging........................................   Baseline         13         15         17         19         21         20         20         21
                                                         2%/Year         20         25         28         33         39         43         46         46
                                                         3%/Year         23         33         40         46         53         66         71         80
                                                       Preferred         29         36         47         54         63         74         82         88
                                                         4%/Year         25         34         45         54         65         76         82         88
                                                         5%/Year         32         45         53         62         74         78         85         88
Cooled EGR...........................................   Baseline          0          0          2          2          2          2          2          2
                                                         2%/Year          0          0          2          2          2          3          3          3
                                                         3%/Year          0          0          2          2          3          5          5          6
                                                       Preferred          0          0          2          2          4          7         11         15
                                                         4%/Year          0          0          4          4          5          6         15         19
                                                         5%/Year          0          1          4          5          7         15         20         27
High BMEP............................................   Baseline          0          0          0          0          0          0          0          0
                                                         2%/Year          0          0          0          0          0          0          0          0
                                                         3%/Year          0          0          0          0          0          0          0          1
                                                       Preferred          0          0          0          0          0          0          1          2
                                                         4%/Year          0          0          0          0          0          1          2          2
                                                         5%/Year          0          0          0          0          0          1          4          5
Diesel...............................................   Baseline          0          0          0          0          0          0          0          0
                                                         2%/Year          0          0          0          0          0          0          0          0
                                                         3%/Year          0          0          0          0          0          0          0          0
                                                       Preferred          0          0          0          0          0          0          0          0
                                                         4%/Year          0          0          0          0          0          1          1          1
                                                         5%/Year          0          0          0          0          0          1          1          3
Advanced Transmissions...............................   Baseline         24         31         36         36         38         38         39         38
                                                         2%/Year         23         30         35         36         41         47         52         58
                                                         3%/Year         24         31         36         39         47         63         65         70
                                                       Preferred         24         31         36         39         47         61         66         70
                                                         4%/Year         28         39         45         47         59         69         69         70
                                                         5%/Year         26         33         45         51         63         79         80         76
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                    Table IV-38--NHTSA Estimated Application of Selected Technologies--Passenger Cars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Technology                       Standards   2014 (%)   2015 (%)   2016 (%)   2017 (%)   2018 (%)   2019 (%)   2020 (%)   2021 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Power Steering..............................   Baseline         15         26         37         38         38         38         38         38
                                                         2%/Year         20         31         48         52         53         60         61         64
                                                         3%/Year         20         31         47         50         51         60         63         64
                                                       Preferred         17         28         43         46         52         62         62         62
                                                         4%/Year         28         39         56         60         62         63         63         66
                                                         5%/Year         28         39         58         62         64         65         65         66
Micro & Mild Hybrids.................................   Baseline          2          3          4          4          4          4          4          4
                                                         2%/Year          2          4          4          4          4          4          4          4
                                                         3%/Year          2          4          4          4          5          5          6          6
                                                       Preferred          2          4          5          5          5          6         11         12
                                                         4%/Year          3          4          5          5          6          6         11         11
                                                         5%/Year          4         10         10         10         16         26         36         46
Strong Hybrid........................................   Baseline          0          0          0          0          0          0          0          0
                                                         2%/Year          0          0          0          0          0          0          0          0
                                                         3%/Year          0          0          0          0          0          0          0          0
                                                       Preferred          0          0          0          0          0          0          0          0
                                                         4%/Year          0          0          0          0          0          1          1          1
                                                         5%/Year          0          0          0          0          0          1          1          1
15-20% Mass Reduction................................   Baseline          0          2          3          3          3          3          3          3
                                                         2%/Year          0          2          3          4          5          6          8          8
                                                         3%/Year          0          2          3          4          5          5          5          6
                                                       Preferred          0          2          3          4          5          7          8         10
                                                         4%/Year          0          2          3          4          6         10         11         12

                                                         5%/Year          0          2          3          4          6          8         12         13
Aerodynamic Improvements.............................   Baseline         40         50         68         74         77         80         80         80
                                                         2%/Year         40         50         68         74         80         82         85         85
                                                         3%/Year         40         50         68         74         82         84         85         85
                                                       Preferred         40         50         68         74         82         84         85         85
                                                         4%/Year         40         50         68         74         82         84         85         85
                                                         5%/Year         40         50         68         74         82         84         85         85
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                     Table IV-39--NHTSA Estimated Application of Selected Technologies--Light Trucks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Technology                       Standards  2014  (%)  2015  (%)  2016  (%)  2017  (%)  2018  (%)  2019  (%)  2020  (%)  2021  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
SGDI.................................................   Baseline         27         32         39         40         41         41         40         40
                                                         2%/Year         32         47         56         59         63         64         64         66
                                                         3%/Year         34         43         57         60         67         72         71         75
                                                       Preferred         29         36         42         45         49         57         61         73
                                                         4%/Year         33         43         56         61         64         69         69         72
                                                         5%/Year         35         45         57         63         68         72         72         75
Turbocharging........................................   Baseline         34         42         50         52         52         52         52         52
                                                         2%/Year         45         62         70         73         74         75         76         78
                                                         3%/Year         47         63         72         74         79         84         85         88
                                                       Preferred         37         47         55         58         60         69         73         84
                                                         4%/Year         47         63         72         75         76         83         83         86
                                                         5%/Year         49         65         74         77         79         85         84         88
Cooled EGR...........................................   Baseline          0          0          4          5          5          5          5          5
                                                         2%/Year          0          0          4          5          5          5          5          6
                                                         3%/Year          0          0          4          5          7          7          7          7
                                                       Preferred          0          0          4          5          5          6          6          6
                                                         4%/Year          0          0          4          5          7         16         23         34
                                                         5%/Year          0          0          4          5          6         14         20         35
High BMEP............................................   Baseline          0          0          0          0          0          0          0          0
                                                         2%/Year          0          0          0          0          0          0          0          1
                                                         3%/Year          0          0          0          0          0          0          0          0
                                                       Preferred          0          0          0          0          0          0          0          0
                                                         4%/Year          0          0          0          0          0          1          1          8
                                                         5%/Year          0          0          0          0          0          1          2         12
Diesel...............................................   Baseline          0          0          0          0          0          0          0          0
                                                         2%/Year          0          0          0          0          0          0          0          0
                                                         3%/Year          0          0          0          0          0          1          1          1
                                                       Preferred          0          0          0          0          0          0          1          1
                                                         4%/Year          0          0          0          0          0          1          1          1
                                                         5%/Year          0          0          0          0          2          2          4          4
Advanced Transmissions...............................   Baseline          6          6         10         11         11         14         15         15
                                                         2%/Year          6          7         11         13         16         29         45         56
                                                         3%/Year          8         10         15         17         21         36         42         53
                                                       Preferred          6          6         11         13         18         33         47         62
                                                         4%/Year          8         10         17         22         30         45         53         56
                                                         5%/Year          6          8         15         22         30         46         51         53
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                     Table IV-40--NHTSA Estimated Application of Selected Technologies--Light Trucks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Technology                       Standards   2014 (%)   2015 (%)   2016 (%)   2017 (%)   2018 (%)   2019 (%)   2020 (%)   2021 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
EPS..................................................   Baseline         18         36         60         64         64         64         64         65
                                                         2%/Year         18         35         61         67         70         73         73         78
                                                         3%/Year         18         35         61         67         68         70         72         81
                                                       Preferred         17         35         60         64         64         69         70         79
                                                         4%/Year         18         35         66         72         76         79         80         81
                                                         5%/Year         19         37         67         74         78         80         80         83
Micro & Mild Hybrids.................................   Baseline          4          4          4          3          3          3          3          3
                                                         2%/Year          7          9         12         13         12         13         13         13
                                                         3%/Year          8          9         13         13         13         14         15         15
                                                       Preferred          4          6          9         10         10         10         15         14
                                                         4%/Year         13         18         21         22         23         24         26         26
                                                         5%/Year         24         40         44         45         47         53         59         65
Strong Hybrid........................................   Baseline          0          0          0          0          0          0          0          0
                                                         2%/Year          0          0          0          0          0          0          0          0

                                                         3%/Year          0          0          0          0          0          0          0          1
                                                       Preferred          0          0          0          0          0          0          0          1
                                                         4%/Year          0          0          0          0          0          0          0          0
                                                         5%/Year          0          0          0          0          0          0          0          1
15-20% Mass Reduction................................   Baseline          1          1          5          6          6          6          6          6
                                                         2%/Year          1          1          5         10         11         12         12         12
                                                         3%/Year          1          1          6         10         11         13         14         22
                                                       Preferred          1          1          6          7          7          8          8         16
                                                         4%/Year          1          1          6         10         20         26         37         39
                                                         5%/Year          1          1          6         11         20         27         41         49
Aerodynamic Improvements.............................   Baseline         57         64         67         76         76         75         76         76
                                                         2%/Year         57         64         67         76         77         79         81         84
                                                         3%/Year         57         64         67         76         77         79         81         84
                                                       Preferred         57         64         67         76         77         79         81         84
                                                         4%/Year         57         64         67         76         77         79         83         86
                                                         5%/Year         57         64         67         76         77         79         83         86
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Although NHTSA's analysis is intended to estimate ways
manufacturers could respond to new standards, not to predict how
manufacturers will respond to new standards, manufacturers have
indicated in meetings with the agency, and in confidential product
planning data submitted to the agency, that they do engage in strategic
timing of the application of technology, relating product planning
cycles to future increases in the stringency of CAFE standards. Thus,
insofar as we have estimated that manufacturers will redesign vehicles
during MYs 2012-2016, our analysis indicates that many manufacturers
may need to add further technology (i.e., more than would be
necessitated solely by MYs 2012-2016 standards) in order to facilitate
compliance with post-MY 2016 standards.\1271\ As discussed below, our
selection of the preferred alternative is informed, in part, by
consideration of additional technology and corresponding costs that may
be incurred in the near term (prior to MY 2017) in order to enable
compliance with future standards.
---------------------------------------------------------------------------

    \1271\ As NHTSA has long recognized in CAFE rulemakings, while
it may be technologically feasible for manufacturers to add
technology to their vehicles outside of their normal product
redesign and refresh cycles, doing so tends to be significantly more
complicated and expensive than adding technology at redesigns and
refresh. See Section IV.C.2.c.ii for more information about NHTSA's
consideration of product development cycles in its modeling
analysis.
---------------------------------------------------------------------------

    Given that technology that could be applied in response to the
baseline standards poses a considerable challenge to the industry, at
least through MY 2016, NHTSA is concerned that regulatory alternatives
more stringent than the Preferred Alternative would require even
further application of technology, including much in earlier model
years--beyond levels the agency judges economically practicable. This
is the second issue described above: that greater and earlier
application of advanced technologies (which may have known or unknown
consumer acceptance issues) could affect the economic practicability of
certain alternatives. For example, under the 4%/Year Alternative for
passenger cars, the agency's analysis indicates that currently-
experimental high BMEP engines might need to appear a year earlier and
on twice as many vehicles in MY 2020 as under the Preferred
Alternative; that diesels and strong hybrids might need to be added
beginning MY 2019, versus not at all under the Preferred Alternative;
that many more advanced transmissions (e.g., 25% more in MY 2016) and
electric power steering (EPS) systems (e.g., 30% more in MY 2016) might
need to be applied in early model years as under the Preferred
Alternative, and that from MY 2018 forward, and more passenger cars
might need to receive significant mass reduction (15-20%) than under
the Preferred Alternative.
    Much as for passenger cars, NHTSA's analysis indicates that
regulatory alternatives more stringent than the Preferred Alternative
for light trucks might also need to entail significant increases in
technology application--including in earlier model years--beyond that
reflected by the Preferred Alternative and, even more so, the baseline
standards. In addition to many of the technologies discussed above
(e.g., advanced transmissions, EPS, significant mass reduction), the
agency's analysis of even the 3%/year alternative for light trucks also
shows high early-MY application of technologies such as SGDI (35% more
in MY 2016), turbocharging with engine downsizing (31% more in MY
2016), cooled EGR (gradually reaching more than five times as many
units in MY 2021), and micro and mild hybrid systems (44% more in MY
2016).
    This assessment of technology application is important in response
to comments suggesting that if technology to meet future standards
exists today, and if vehicles currently on the market might be able to
meet or exceed their targets in future model years, that must mean that
the standards defining such targets are feasible. There is a
significant difference in the level of capital and resources required
to implement one or more new technologies on a single vehicle model,
and the level of capital and resources required to implement those same
technologies across the entire vehicle fleet. NHTSA's analysis tries to
estimate both manufacturers' redesign cadence which affects when
significant new technologies may be most economically added to
individual vehicle models as well as the capital, engineering, and
manufacturing capacity resource constraints that affect how quickly new
technologies may be expanded across manufacturers' products. As
illustrated in the discussion of compliance shortfalls, when
considering these resource constraints, it would not be economically
practicable to expand some the most advanced technologies to every
vehicle in the fleet within the rulemaking timeframe, although it
should be possible to increase the application of advanced technologies
across the fleet in a progression that accounts for those resource
constraints. That is what NHTSA's analysis tries to do.

i. Other Technology Considerations
    The discussion above covers application of technology that the
agency projects manufacturers may use to meet the standards defined by
different regulatory alternatives, but the agency emphasizes that it
models only one path to compliance, and we recognize that each
manufacturer will pursue their own path which may or may not align with
the one we model for them, as they may focus on a different mix of
technologies. In terms of how manufacturers will meet the passenger car
standards under different alternatives, the agency is concerned that
increasing the stringency of passenger cars beyond the Preferred
Alternative would increase the risk that manufacturers might reduce the
mass of passenger cars beyond the safety-neutral levels evaluated by
the agency. Tables IV-37 through IV-40 show the agency's estimates of
the rates at which a number of key technologies could be applied in
response to standards defined by the No-Action Alternative, the
Preferred Alternative, and alternatives specified as annual rates of
increase ranging from 2% to 6%. Most of these technologies are already
in use on some vehicles available for sale today in the United States
(a few, notably high-BMEP (27 bar) cooled EGR engines, are not).
However, these technologies are not currently applied throughout the
light vehicle fleet and in meetings with the agency manufacturers have
expressed concern regarding the potential to increase application rates
given constraints such as component supply, engineering resources, and
consumer acceptance. While, in the agency's judgment, most of these
technologies can become common in the marketplace by MY 2025, we expect
that there are limitations on the rates at which adoption of these
technologies can be increased, and we consider the outlook for
widespread adoption through MY 2025 to be uncertain. At stringencies
that require the application of several, but not all, advanced
technologies, if a given technology is not as successful as currently
assumed in NHTSA's analysis, manufacturers could likely compensate by
substituting one or more of the other advanced technologies, and apply
mass reduction levels more in line with NHTSA's analysis. However, for
regulatory alternatives more stringent than the Preferred Alternative,
the agency is concerned that there would be less ``headroom,''
increasing the risk that some manufacturers would resort to mass
reduction in ways that could compromise highway safety. This suggests
that passenger car standards defined by the 4%/year and faster (in
terms of the pace of stringency increases) regulatory alternatives may
not be economically practicable, and thus may be beyond the maximum
feasible levels for MYs 2017-2025.
    Similarly, for light trucks, while many of these powertrain
technologies are already achieving notable marketplace success, some
(e.g., high BMEP) are not proven in load- and towing-intensive
applications, and the agency is concerned that widespread simultaneous
increases in the application of many of these advanced technologies is
likely to leave manufacturers little room to adjust should some
technologies not be as successful as currently reflected in NHTSA's
analysis. This suggests that light truck standards defined by the 3%/
year and faster (in terms of the pace of stringency increases)
regulatory alternatives may not be economically practicable, and thus
may be beyond the maximum feasible levels for MYs 2017-2025.
j. Cost of Meeting the Standards
    Another consideration for economic practicability is the extent to
which new standards could increase the average cost to acquire new
vehicles, because even insofar as the underlying application of
technology leads to reduced outlays for fuel over the useful lives of
the affected vehicles, these per-vehicle cost increases provide both a
measure of the degree of challenge faced by manufacturers, and also the
degree of adjustment, in the form of potential vehicle price increases,
that will ultimately be required of vehicle purchasers. Tables IV-41
through IV-44, below, show the agency's estimates of average cost
increase under the Preferred Alternative for passenger cars and light
trucks. Because our analysis includes estimates of manufacturers'
indirect costs and profits, as well as civil penalties some
manufacturers (as allowed under EPCA/EISA) might elect to pay in lieu
of achieving compliance with CAFE standards, we report cost increases
as estimated average increases in vehicle price (as MSRP). These are
average values, and the agency does not expect that the prices of every
vehicle would increase by the same amount; rather, the agency's
underlying analysis shows unit costs varying widely between different
vehicle models. For example, while our analysis shows (as indicated
below) an average cost increase of $1,400 for Fiat/Chrysler's MY 2019
passenger cars under the Preferred Alternative, that $1,400 value is
the production-weighted average of values ranging from $0 to $3,282.
While we recognize that manufacturers might distribute regulatory costs
throughout their fleet in order to maximize profit, we have not
attempted to estimate strategic pricing. To provide an indication of
potential increase relative to today's vehicles, we report increases
relative to the market forecast using technology in the MY 2010 fleet--
the most recent actual fleet for which we have information sufficient
for use in our analysis. We provide results starting in MY 2014 in part
to illustrate the cost impacts in the first model year that we believe
manufacturers might actually be able to change their products in
preparation for compliance with standards in MYs 2017 and beyond:

   Table IV-41--NHTSA Estimated Total (vs. MY 2010 Technology) Average MSRP Increases During MYs 2014-2019 Under Preferred Alternative--Passenger Cars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2014            2015            2016            2017            2018            2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry................................................             537             711             934           1,044           1,166           1,286
Aston Martin............................................           1,753           1,832           2,250           3,397           3,437           3,281
BMW.....................................................             490             814           1,104           1,205           1,642           1,579
Daimler.................................................           1,033           1,128           1,516           1,616           1,670           1,607
Fiat....................................................             794             941           1,256           1,250           1,287           1,400
Ford....................................................             601             997           1,081           1,285           1,291           1,319
Geely...................................................             896           1,031           1,120           1,229           1,538           1,752
General Motors..........................................             569             928           1,146           1,148           1,369           1,304
Honda...................................................             401             400             760             901           1,069           1,079
Hyundai.................................................             408             449             903           1,096           1,076           1,354
Kia.....................................................             197             374             428             616             675           1,007
Lotus...................................................             709           1,502           1,590           1,879           1,942           2,894

Mazda...................................................             645             660           1,302           1,292           1,394           1,278
Mitsubishi..............................................           1,153           1,811           1,778           1,749           1,791           1,667
Nissan..................................................             836             857             948           1,192           1,275           1,450
Porsche.................................................             728           1,045           1,123           1,480           1,650           1,756
Spyker..................................................  ..............  ..............  ..............  ..............  ..............  ..............
Subaru..................................................           1,381           1,551           1,497           1,568           1,660           2,271
Suzuki..................................................             932           1,265           1,365           1,349           1,356           1,963
Tata....................................................             864             974           1,201           1,616           2,212           2,109
Tesla...................................................  ..............  ..............  ..............  ..............  ..............  ..............
Toyota..................................................             235             295             418             482             621             996
Volkswagen..............................................             234             445             692             802           1,066           1,099
--------------------------------------------------------------------------------------------------------------------------------------------------------

   Table IV-42--NHTSA Estimated Total (vs. MY 2010 Technology) Average MSRP Increases During MYs 2020-2025 Under Preferred Alternative--Passenger Cars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2020            2021            2022            2023            2024            2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry................................................           1,480           1,608           1,699           1,821           2,074           2,153
Aston Martin............................................           3,338           3,963           4,026           4,296           4,765           4,719
BMW.....................................................           1,652           1,792           1,996           2,128           2,594           2,595
Daimler.................................................           1,821           1,893           2,157           2,476           2,566           2,905
Fiat....................................................           1,623           1,878           1,888           2,314           2,464           2,666
Ford....................................................           1,814           1,850           2,018           2,020           2,477           2,588
Geely...................................................           1,784           1,868           1,961           2,123           2,327           2,472
General Motors..........................................           1,562           1,659           1,661           1,831           1,981           2,268
Honda...................................................           1,067           1,257           1,255           1,490           1,493           1,460
Hyundai.................................................           1,362           1,503           1,662           1,689           1,832           1,833
Kia.....................................................           1,234           1,324           1,571           1,554           1,538           1,730
Lotus...................................................           2,952           3,022           3,109           3,339           3,439           3,381
Mazda...................................................           1,586           1,568           1,970           2,073           2,067           2,251
Mitsubishi..............................................           2,766           3,052           3,016           2,983           2,950           3,017
Nissan..................................................           1,506           1,528           1,647           1,752           2,108           2,071
Porsche.................................................           1,834           2,018           2,336           2,457           2,571           2,600
Spyker..................................................  ..............  ..............  ..............  ..............  ..............  ..............
Subaru..................................................           2,758           2,694           2,645           2,694           5,228           4,457
Suzuki..................................................           2,203           2,533           2,526           2,501           2,522           2,666
Tata....................................................           2,188           2,216           2,296           2,633           2,724           2,889
Tesla...................................................  ..............  ..............  ..............  ..............  ..............  ..............
Toyota..................................................           1,111           1,341           1,397           1,397           1,640           1,578
Volkswagen..............................................           1,298           1,460           1,570           1,707           1,932           2,257
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table IV-43--NHTSA Estimated Total (vs. MY 2010 Technology) Average MSRP Increases During MYs 2014-2019 Under Preferred Alternative--Light Trucks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2014            2015            2016            2017            2018            2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry................................................             705             931           1,159           1,226           1,264           1,377
Aston Martin............................................  ..............  ..............  ..............  ..............  ..............  ..............
BMW.....................................................             581             694           1,223           1,751           1,727           1,614
Daimler.................................................             838           1,038           1,117           2,162           2,269           2,115
Fiat....................................................           1,102           1,499           2,035           2,064           2,046           1,982
Ford....................................................             445           1,146           1,140           1,141           1,153           1,145
Geely...................................................             833           1,055           1,217           1,257           1,958           1,828
General Motors..........................................             775             844             977           1,006           1,034           1,385
Honda...................................................             638             709             883             995           1,032           1,018
Hyundai.................................................             380             406             405             747             751           1,360
Kia.....................................................             285             430           1,070           1,119           1,118           1,146
Lotus...................................................  ..............  ..............  ..............  ..............  ..............  ..............
Mazda...................................................             842             855           1,046           1,037           1,771           1,612
Mitsubishi..............................................           1,406           1,362           1,341           1,323           1,317           1,215
Nissan..................................................             818             870           1,091           1,309           1,313           1,440
Porsche.................................................             705           1,294           1,328           1,355           1,434           2,379
Spyker..................................................  ..............  ..............  ..............  ..............  ..............  ..............
Subaru..................................................             962             954             938             989           1,005           1,399
Suzuki..................................................           1,002           1,110           1,360           1,344           1,329           1,209
Tata....................................................             798           1,022           2,260           2,276           2,302           2,235
Tesla...................................................  ..............  ..............  ..............  ..............  ..............  ..............
Toyota..................................................             610             615             978             968           1,038           1,166

Volkswagen..............................................             398             642             731             725             874             957
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table IV-44--NHTSA Estimated Total (vs. MY 2010 Technology) Average MSRP Increases During MYs 2020-2025 Under Preferred Alternative--Light Trucks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2020            2021            2022            2023            2024            2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry................................................           1,599           1,866           1,893           1,991           2,070           2,125
Aston Martin............................................  ..............  ..............  ..............  ..............  ..............  ..............
BMW.....................................................           1,620           1,772           2,094           2,055           2,050           2,063
Daimler.................................................           2,104           2,078           2,524           2,546           2,582           2,551
Fiat....................................................           2,629           2,719           2,708           3,119           3,074           3,126
Ford....................................................           1,242           2,074           2,037           2,016           2,005           2,074
Geely...................................................           1,800           1,795           1,992           2,592           2,585           2,537
General Motors..........................................           1,828           1,803           1,776           1,774           1,842           2,025
Honda...................................................           1,037           1,435           1,563           1,575           1,698           1,663
Hyundai.................................................           1,392           1,370           1,607           1,603           1,836           1,774
Kia.....................................................           1,133           1,584           1,531           1,831           1,794           1,733
Lotus...................................................  ..............  ..............  ..............  ..............  ..............  ..............
Mazda...................................................           1,603           1,570           1,549           1,778           1,917           1,853
Mitsubishi..............................................           1,197           2,439           2,380           2,346           2,313           2,206
Nissan..................................................           1,621           1,682           1,779           1,762           1,971           1,939
Porsche.................................................           2,341           2,302           2,303           2,625           2,672           2,620
Spyker..................................................  ..............  ..............  ..............  ..............  ..............  ..............
Subaru..................................................           1,378           1,359           1,379           1,344           1,656           1,607
Suzuki..................................................           1,193           2,671           2,607           2,569           2,532           2,406
Tata....................................................           2,247           2,822           2,899           2,967           3,031           3,020
Tesla...................................................  ..............  ..............  ..............  ..............  ..............  ..............
Toyota..................................................           1,168           1,480           1,492           1,695           1,882           1,875
Volkswagen..............................................           1,193           1,173           1,177           1,344           1,673           1,890
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Relative to current vehicles (as represented here by technology in
the MY 2010 fleet, the most recent for which NHTSA has complete data),
NHTSA judges these cost increases to be significant, but considering
the accompanying fuel savings, likely to be accepted by consumers well
enough to avoid undue distortion (e.g., significant shifts--
attributable to today's standards--in manufacturers' respective market
shares) of the light vehicle market.
    However, relative to the Preferred Alternative, NHTSA noted
significant further cost increases for several major manufacturers--
even in MY 2016--under the 3%/y and 4%/y alternatives for light trucks.
Tables IV-45 and IV-46 below show additional costs estimated to be
incurred under the 3%/y and 4%/y alternatives as compared to the
preferred alternative:

 Table IV-45--NHTSA Estimated Difference Between Estimated Average MSRP Increase Under 3%/y and Preferred Alternatives for Selected Manufacturers' Light
                                                                         Trucks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    2014         2015         2016         2017         2018         2019         2020          2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry......................................          116          173          173          210          261          201          120             8
Fiat..........................................          164           63           56          139          159          222          (72)           22
Ford..........................................           75          481          474          460          487          408          446            (6)
General Motors................................          278          251          245          279          335          244           (3)           (7)
Mazda.........................................          496          443          450          439          177          142          147           153
Mitsubishi....................................          591          580          517          515          636          600          622           (46)
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table IV-46--NHTSA Estimated Difference Between Estimated Average MSRP Increases Under 4%/y and Preferred Alternatives for Selected Manufacturers' Light
                                                                         Trucks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      2014         2015         2016         2017         2018         2019         2020         2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry........................................          148          224          246          288          374          448          455          387
Fiat............................................          173           73           93          179          230          309          142          228
Ford............................................           75          525          517          507          495          541          694          520
General Motors..................................          426          449          454          486          646          790          735          720
Mazda...........................................          650          576          596          587          536          480          459          459
Mitsubishi......................................          733          718          652          647          636          633          716          476
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For example, in MY 2016, NHTSA estimates that compliance with
already-promulgated light truck CAFE standards could increase average
MSRP by $1,053, as mentioned above; under the preferred alternative, we
estimate that cumulative compliance costs increase to $1,159 due to
early application of technology in order to meet future anticipated
standards; under the 3%/y and 4%/y alternatives, we estimate this
amount would increase to $1,333 and $1,405, respectively. For some
manufacturers (e.g., Ford, GM, Mazda, Mitsubishi), these increases are
large even prior to MY 2016. Particularly during the earlier model
years, the agency is concerned that these further costs represent
significant increases in ``lift'' beyond levels anticipated when the
MYs 2012-2016 standards were promulgated in MY 2010. In the agency's
judgment, these additional costs augment the basis--discussed above in
terms of technology application--to determine that light truck
standards increasing at a pace of 3%/year or faster after MY2016 are
beyond the maximum feasible levels for MYs 2017-2021.
    The above considerations relate to matters of technological
feasibility and economic practicability--two of the factors NHTSA must
take into account when determining the maximum feasible stringency of
each standard in each model year. The agency must also consider the
need of the nation to conserve energy. Two of the regulatory
alternatives the agency has considered--the maximum net benefit (MNB)
and total cost = total benefit (TC=TB) alternatives--are defined in
terms of explicit quantitative means of weighing all the social costs
NHTSA has attempted to quantify against all of the corresponding
monetized social benefits (e.g., reduced fuel outlays, reduced
environmental damages from motor vehicle GHG emissions) of energy
conservation achieved through increases in the stringency of fuel
economy standards. As discussed above, the agency has determined that,
considering resultant technology application and costs, the standards
defined by these two regulatory alternatives exceed maximum feasible
levels. Although NHTSA has quantified all regulatory alternatives in
terms of their respective costs and monetized benefits, the agency also
considers it appropriate to compare alternatives more simply in terms
of total fuel savings and average per-vehicle costs. Below, Tables IV-
47 through IV-50 present the agency's findings on this basis for
passenger cars and light trucks, respectively. Fuel savings are
expressed in terms of cumulative incremental fuel savings throughout
the useful lives of fleets in all affected model years through MY 2021,
measuring savings relative to fuel consumption estimated to occur under
the baseline standards defined by the No-Action Alternative. Costs are
measured in terms of average incremental MSRP increases relative to
average prices estimated to result under the baseline standards defined
by the No-Action Alternative.

                       Table IV-47--NHTSA Estimated Passenger Car Cumulative Lifetime Fuel Savings Through MY 2021 and Average Vehicle Cost Increases During MYs 2014-2021
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                                                                             Ave. MSRP increase relative to no-action alternative
           Alternative                 Fleet MY basis    --------------------------------------------------------------------------------------------   Fuel savings (b.      Fuel savings (b.
                                                                   2022                   2023                   2024                   2025            gal.) MY2022-2025   gal.) through MY2025
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2%...............................  2008.................  566-.................  611-.................  628-.................  644-.................  30-.................  53-
                                   2010.................  650..................  705..................  728..................  730..................  28..................  50
3%...............................  2008.................  840-.................  883-.................  958-.................  1,059-...............  43-.................  78-