[Federal Register Volume 87, Number 126 (Friday, July 1, 2022)]
[Proposed Rules]
[Pages 39439-39458]
[FR Doc No: 2022-12618]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 531

[NHTSA-2022-0048]
RIN 2127-AM29

Exemptions From Average Fuel Economy Standards; Passenger
Automobile Average Fuel Economy Standards

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Proposed rule; proposed decision to grant exemption.

-----------------------------------------------------------------------

SUMMARY: This proposed decision responds to petitions filed by several
low volume manufacturers requesting exemption from the generally
applicable corporate average fuel economy (CAFE) standards for several
model years (MYs). The low volume manufacturers and MYs are as follows:
Aston Martin Lagonda Limited for MYs 2008-2023, Ferrari N.V. for MYs
2016-2018 and 2020, Koenigsegg Automotive AB for MYs 2015 and 2018-
2023, McLaren Automotive for MYs 2012-2023, Mobility Ventures LLC for
MYs 2014-2016, Pagani Automobili S.p.A for MYs 2014 and 2016-2023, and
Spyker Automobielen B.V. for MYs 2008-2010. NHTSA proposes to exempt
these manufacturers from the generally applicable CAFE standards for
the model years listed and establish alternative standards for each
individual manufacturer at the levels outlined below.

DATES: Comments are requested on or before August 1, 2022.

ADDRESSES: You may send comments, identified by Docket No. NHTSA-2022-
0048, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for sending comments.
     Fax:<PHONE_NUMBER>.
     Mail: Docket Management Facility, M-30, U.S. Department of
Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Docket Management Facility, M-30, U.S.
Department of Transportation, West Building, Ground Floor, Rm. W12-140,
1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 4
p.m. Eastern Time, Monday through Friday, except Federal holidays.
    Instructions: All submissions received must include the agency name
and

docket number or Regulatory Information Number (RIN) for this
rulemaking. All comments received will be posted without change to
http://www.regulations.gov, including any personal information
provided.
    Docket: For access to the dockets to read background documents or
comments received, go to http://www.regulations.gov, and/or: Docket
Management Facility, M-30, U.S. Department of Transportation, West
Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue SE,
Washington, DC 20590. The Docket Management Facility is open between 9
a.m. and 4 p.m. Eastern Time, Monday through Friday, except Federal
holidays.

FOR FURTHER INFORMATION CONTACT: Joseph Bayer, Engineer, Fuel Economy
Division, Office of Rulemaking, by phone at<PHONE_NUMBER> or by fax at
(202) 493-2290 or Hannah Fish, Attorney Advisor, Vehicle Standards and
Harmonization, Office of the Chief Counsel, by phone at<PHONE_NUMBER>
or by fax at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Contents

1. Introduction
2. Evaluation of Maximum Feasible Fuel Economy Levels
    a. Determining ``Maximum Feasible'' Under EPCA/EISA
    b. Methodology Used To Assess Maximum Feasible Average Fuel
Economy Level for Petitioners
    i. Technological Feasibility and Economic Practicability
    (a) Aston Martin Lagonda Limited (AML) MY 2008-2023 Vehicles
    (b) Ferrari MY 2016-2018 and 2020 Vehicles
    (c) Koenigsegg Automotive AB MY 2015, 2018-2023 Vehicles
    (d) McLaren Automotive MY 2012-2023 Vehicles
    (e) Mobility Ventures MY 2014-2016 MV1
    (f) Pagani Automobili S.p.A MY 2014 and 2016-2023 Vehicles
    (g) Spyker Automobielen B.V. MY 2008-2010 Vehicles
    ii. The Need of the United States To Conserve Energy
    iii. The Effect of Other Standards of the Federal Government on
Fuel Economy
3. Proposed Maximum Feasible Average Fuel Economy for Exempted
Manufacturers
4. Regulatory Impact Analyses
    a. Regulatory Evaluation
    b. Regulatory Flexibility Determination
    c. National Environmental Policy Act
5. Proposed Regulatory Text

1. Introduction

    The Energy Policy and Conservation Act (EPCA) of 1975, as amended
by the Energy Independence and Security Act (EISA) of 2007,\1\ directs
the Secretary of Transportation, and the National Highway Traffic
Safety Administration (NHTSA) by delegation,\2\ to prescribe corporate
average fuel economy (CAFE) standards for automobiles manufactured in
each model year (MY). EPCA/EISA requires NHTSA to establish CAFE
standards for passenger cars and light trucks at the ``maximum feasible
average fuel economy level'' that it decides manufacturers can achieve
in a MY,\3\ based on the agency's consideration of four factors:
technological feasibility, economic practicability, the effect of other
standards of the Government on fuel economy, and the need of the United
States to conserve energy.\4\
---------------------------------------------------------------------------

    \1\ 49 U.S.C. 32902.
    \2\ 49 CFR 1.95.
    \3\ 49 U.S.C. 32902(a).
    \4\ 49 U.S.C. 32902(f).
---------------------------------------------------------------------------

    Congress provided in EPCA/EISA statutory authority for NHTSA to
exempt a low volume manufacturer of passenger automobiles from the
industry-wide passenger car standard if NHTSA concludes that the
industry-wide passenger car standard is more stringent than the maximum
feasible average fuel economy level that the manufacturer can achieve,
and NHTSA establishes an alternative standard for that manufacturer's
fleet of passenger cars at the maximum feasible average fuel economy
level that the manufacturer can achieve.\5\ Under EPCA/EISA, a low
volume manufacturer is one that manufactured (whether in the United
States or not) fewer than 10,000 passenger automobiles in the MY two
years before the MY for which the exemption is sought, and that will
manufacture fewer than 10,000 passenger automobiles in the affected MY.
NHTSA may set alternative fuel economy standards in three ways: (1) a
separate standard for each exempted manufacturer; (2) a separate
standard applicable to each class of exempted automobiles (classes
based on design, size, price or other factors); or (3) a single
standard for all exempted manufacturers.\6\ NHTSA has historically set
individual standards for each exempted manufacturer.
---------------------------------------------------------------------------

    \5\ 49 U.S.C. 32902(d).
    \6\ 49 U.S.C. 32902(d)(2).
---------------------------------------------------------------------------

    49 CFR part 525 contains NHTSA's regulations implementing the
statutory requirements in 49 U.S.C. 32902. This part provides content
and format requirements for low volume manufacturer petitions for
exemption, and specifies that those petitions must be submitted to
NHTSA not later than 24 months before the beginning of the affected
model year, unless good cause for later submission is shown.\7\ That
part also outlines the NHTSA process for publishing proposed and final
decisions on petitions in the Federal Register and for accepting public
input on proposed decisions.\8\ A manufacturer's final alternative
standard is codified at 49 CFR part 531.
---------------------------------------------------------------------------

    \7\ 49 CFR 525.6(b). See also 54 FR 40689 (Oct. 3, 1989). NHTSA
has identified two broad categories of situations that would
establish good cause for failure to submit a timely petition:
situations in which necessary supporting data for the petition were
unavailable until after the due date had passed (for example, a
recently incorporated manufacturer might not have adequate time to
file an exemption petition 24 months prior to the model year), and
second, situations in which a legitimately unexpected noncompliance
occurs (for example, if a company providing a low volume
manufacturer with its engines goes out of business, and the
manufacturer is forced to make an unanticipated engine switch,
resulting in lower than expected fuel economy). That said, each
determination that good cause was or was not shown for the late
filing is made on an individual basis. Manufacturers should reach
out to NHTSA as expeditiously as possible if they expect they cannot
submit a petition in a timely manner.
    \8\ 49 CFR 525.8.
---------------------------------------------------------------------------

    This proposed decision responds to petitions filed by Aston Martin
Lagonda Limited (AML) for MYs 2008-2023, Ferrari N.V. (Ferrari) for MYs
2016-2018 and 2020, Koenigsegg Automotive AB (Koenigsegg) for MYs 2015
and 2018-2023, McLaren Automotive (McLaren) for MYs 2012-2023, Mobility
Ventures LLC (Mobility Ventures) for MYs 2014-2016, Pagani Automobili
S.p.A (Pagani) for MYs 2014 and 2016-2023,\9\ and Spyker Automobielen
B.V. (Spyker) for MYs 2008-2010. NHTSA proposes to conclude that all
seven manufacturers were, and are, eligible for an alternative standard
for the listed model years, that the industry-wide passenger car CAFE
standard for those model years is more stringent than the maximum
feasible average fuel economy level that those manufacturers could, and
can, achieve, and that alternative standards should be set at the
levels discussed below.
---------------------------------------------------------------------------

    \9\ Pagani petitioned for alternative standards for MYs 2012-
2021 but did not produce any vehicles for sale in the U.S. market in
MYs 2012, 2013, and 2015.
---------------------------------------------------------------------------

2. Evaluation of Maximum Feasible Fuel Economy Levels

    NHTSA has not granted petitions for alternative standards for
several low volume manufacturers for several model years, both past and
imminent future. If NHTSA does not set an alternative standard for a
petitioning manufacturer, that manufacturer would be subject to the
industry-wide passenger car standard(s) for the model year(s) in
question, and would therefore be liable for civil penalties if it was
unable to comply with those standards. At this

point, any NHTSA action prescribing alternative standards for past
model years is retroactive.\10\
---------------------------------------------------------------------------

    \10\ See Bowen v. Georgetown University Hospital, 488 U.S. 204,
208 (1988). The Supreme Court in Bowen v. Georgetown University
Hospital laid the foundation for modern retroactivity jurisprudence
by pronouncing that ``[r]etroactivity is not favored in the law.''
Justice Kennedy, writing for the majority, and Justice Scalia,
writing in his concurrence, established the competing principles
that a statute can explicitly authorize retroactive rulemaking where
Congress conveys the power to do so in express terms, and a statute
can implicitly authorize retroactive rulemaking, as in situations
where an agency misses a statutory deadline to promulgate a rule, or
similarly, where an agency's inaction would have eliminated a
Congressionally-prescribed exemption.
---------------------------------------------------------------------------

    However, NHTSA has previously granted low volume exemption
petitions retroactively when the agency did not publish proposed and
final determinations on those exemption petitions prior to the
beginning of a model year.\11\ In these previous notices, NHTSA
recognized that the agency's ability to adopt retroactive rules is very
limited but noted that there were compelling reasons to distinguish low
volume CAFE exemptions. NHTSA reasoned that if the agency could not
issue exemptions from the industry-wide CAFE standards for low volume
manufacturers after the commencement of a model year, the agency would,
by inaction, have ``totally eliminated the congressionally prescribed''
low volume manufacturer exemption for the manufacturers and years in
question.\12\ NHTSA also stated that the agency's failure to act upon
timely applications for low volume exemptions from the industry-wide
CAFE standard is analogous to a situation where an agency misses a
statutory deadline and then must issue a rule retroactively,
particularly since the manufacturers were in no way responsible for the
agency's inaction. To avoid unfairly penalizing the low volume
manufacturers for agency inaction that was beyond their control, NHTSA
reasoned that EPCA must be construed to implicitly authorize the grant
of retroactive low volume exemptions.
---------------------------------------------------------------------------

    \11\ See, e.g., 43 FR 33268 (July 31, 1978); 49 FR 11548 (March
1, 1979); 46 FR 29944 (June 4, 1981); 54 FR 40689 (October 3, 1989);
55 FR 12485 (April 4, 1990).
    \12\ Supra note 10.
---------------------------------------------------------------------------

    Since those decisions, the D.C. Circuit in General Motors Corp. v.
National Highway Traffic Safety Administration stated, in dicta, that
EPCA provided support for NHTSA to set retroactive alternative fuel
economy standards for low volume manufacturers.\13\ In considering the
congressional authorization for NHTSA's ability to retroactively amend
a CAFE standard for LVMs, but not full-line manufacturers,\14\ the
court agreed with the agency's explanation that ``granting retroactive
exemptions from the generally applicable standard for low-volume
manufacturers does not have the same potential for disrupting the
statutory scheme as retroactively amending the standard as it applies
to the rest of the industry.'' \15\ The court also noted that Congress
had, in EPCA and accompanying legislative history, ``[sent] out strong
signals that [low volume] manufacturers are to be treated differently
from the rest of the industry.'' \16\ Because LVMs only account for a
fraction of the total annual production of passenger automobiles, the
LVMs have limited engineering staff and limited market, and each
exemption applies to only one manufacturer, ``NHTSA is well within its
authority to proceed on a case-by-case basis to exempt small
manufacturers from the industry-wide CAFE standards, and establish an
individualized CAFE for each exempted manufacturer.'' \17\
---------------------------------------------------------------------------

    \13\ General Motors Corp. v. National Highway Traffic Safety
Admin., 898 F.2d 165, at 171 (1990).
    \14\ Id. at 176. The court agreed with NHTSA that it was
reasonable to deny a 1987 petition and subsequent petition for
reconsideration from General Motors (GM) to retroactively amend the
1984 and 1985 industry-wide CAFE standard. NHTSA had denied GM's
petitions on the basis that retroactive amendment would be
inconsistent with the EPCA statutory scheme. Subsequent to NHTSA's
original petition denials but before General Motors Corp., the
Supreme Court addressed retroactive rulemaking in Bowen, and NHTSA
added to its original argument that ``beyond the independent
validity of its petition denials, any retroactive amendment of the
[industry-wide] CAFE standard is barred by the Bowen decision.''
    \15\ Id. (citing 53 FR 15246 (April 28, 1988)).
    \16\ Id. (citing 44 FR 3710 (Jan. 18, 1979), 53 FR 15241 (April
28, 1988)).
    \17\ Id. at 177. Chief Judge Wald went on to state that,
similarly, ``[e]ven assuming a general policy of granting
retroactive exemptions after the model year had begun for a segment
of the industry accounting for significantly less than one percent
of the product, NHTSA could reasonably have a different policy for
the other 99 percent.''
---------------------------------------------------------------------------

    If NHTSA could not set standards for these past model years, the
low volume manufacturers would be liable for civil penalties for
noncompliance, and would have to either pay the penalty or buy
unexpired fuel economy credits \18\ from other manufacturers to make up
the deficit between their fleet fuel economy and the industry-wide
passenger car standard. This would be a reversal of several decades of
NHTSA policy to grant appropriately submitted petitions for alternative
standards,\19\ \20\ and with functionally no notice. A petitioning
manufacturer would have had no reason to believe that NHTSA would not
act in a timely fashion on its request based on prior agency practice;
that is, it could not have known that it needed suddenly to drastically
improve its fleet fuel economy, or alternatively, needed suddenly to
pay civil penalties for failure to meet the industry-wide standard.
Accordingly, NHTSA continues to believe that EPCA/EISA permits the
agency to set alternative standards for past MYs. In support of this
position, NHTSA has also deferred sending the required enforcement
notification to the manufacturers considered in this notice for falling
below the conventional passenger car standards until any outstanding
petitions for the given model year have been resolved.\21\
---------------------------------------------------------------------------

    \18\ NHTSA has deleted all MY 2012 and earlier credits which
have reached their expiry date in accordance with 49 CFR
536.5(c)(2).
    \19\ See supra, note 11.
    \20\ Note, this is a different inquiry than whether the LVM's
maximum feasible fuel economy level is the level that it petitioned
for, or some other level. NHTSA can grant the petition for review
then set a different standard than the manufacturer requested.
    \21\ If a manufacturer's vehicles in a particular compliance
category have below standard fuel economy, NHTSA will provide
written notification to the manufacturer that it has failed to meet
a particular fleet target standard. See 49 CFR 536.5(d)(2).
---------------------------------------------------------------------------

a. Determining ``Maximum Feasible'' Under EPCA/EISA

    NHTSA has determined that EPCA/EISA permits the agency to
retroactively set fuel economy standards for low volume manufacturers.
However, determining how to prescribe an alternative fuel economy
standard at the maximum feasible level for past model years is a
separate question.
    NHTSA relies heavily on the information that a low volume
manufacturer submits in its petition in determining what maximum
feasible fuel economy level is achievable for that manufacturer.
Evaluating that information well in advance of a model year for which
the petition is submitted invariably aids NHTSA in setting a LVM's
alternative standard at its maximum feasible level; attempting to
determine now how the agency would have evaluated the information
included in the petition seems like an imprecise, if not also futile,
exercise because the agency already knows what fuel-economy-improving
technologies the LVM applied, and importantly (and irrevocably), the
vehicles have already been sold. Regardless of what average fuel
economy level the LVMs told the agency they could achieve in each model
year, the LVMs achieved the levels they achieved, and that information
is now before the agency along with the information originally
submitted by the LVMs. Thus, the

agency will consider all currently available information in proposing
maximum feasible levels for each LVM.
    Accordingly, NHTSA believes the question that the agency must
answer now for past model years is, given all information currently
before the agency, what fuel economy levels were the maximum feasible
levels that each LVM could have achieved in each model year?
    For imminently future model years, the agency must answer a
slightly different set of questions; that is, is the alternative
standard that the manufacturer petitioned for maximum feasible, and if
not, what, if any, technologically feasible and economically
practicable changes would the manufacturer be able to make in the time
frame before model year production would need to commence? A vehicle
manufacturer's model year typically begins before the calendar year
(e.g., model year 2020 vehicles are manufactured beginning in calendar
year 2019). Vehicle designs (including drivetrains, which are where
many fuel economy improvements are made) are often fixed years in
advance, which makes adjusting fleet fuel economy difficult without
sufficient lead time. For most manufacturers, production plans are
solidified at least 18 months in advance of a model year, and there is
limited ability to deviate.
    While EPCA/EISA does not prescribe a statutory deadline by which
NHTSA must act on low volume exemption applications, in establishing
the regulations implementing EPCA's low volume manufacturer exemption
provisions, the agency required low volume manufacturers to submit
petitions for exemption ``not later than 24 months before the beginning
of the affected model year'' to ``facilitate the low volume
manufacturers' planning to comply with the alternative standards, and
to ensure that the agency's analysis of those manufacturers' maximum
feasible average fuel economy would not be simply a `rubber stamping'
of the individual manufacturer's planned fuel economy, caused by
insufficient leadtime for the manufacturer to make changes.'' \22\ As a
practical matter, the greater the difference between what NHTSA
believes is the maximum feasible standard and what the manufacturer
petitioned for, the more time the manufacturer likely needs to adjust
product designs and plans to meet that standard.
---------------------------------------------------------------------------

    \22\ See 41 FR 53827, 53828 (Dec. 9, 1976); 54 FR 40690 (October
3, 1989). See also 49 U.S.C. 32902(a), 81 FR 95491 (Dec. 28, 2016).
EPCA/EISA requires that when NHTSA amends a generally applicable
fuel economy standard to make it more stringent, that new standard
must be promulgated ``[a]t least 18 months before the beginning of
each model year.'' This is because Congress recognized the
importance of notice to vehicle manufacturers to allow them the lead
time necessary to adjust their product plans, designs, and
compliance plans to address changes in fuel economy standards.
---------------------------------------------------------------------------

    With these considerations and questions in mind, NHTSA summarizes
the methodology used to assess the petitioners' maximum feasible
average fuel economy levels, and the information submitted by
petitioners to assist in that assessment, below.

b. Methodology Used To Assess Maximum Feasible Average Fuel Economy
Level for Petitioners

    As an initial matter, all manufacturers considered in this proposed
decision met the threshold statutory requirements for eligibility; that
is, all manufacturers manufactured or will manufacture fewer than
10,000 vehicles in the applicable model years. Some petitions for some
model years were submitted late, although the late filings were
accompanied with good cause claims, per 49 CFR part 525.\23\ Regardless
of the sufficiency of those good cause claims, NHTSA believes that due
to the significant lateness of the agency's response to these specific
exemption requests, it would be inequitable at this point to deny the
late petitions on grounds of untimeliness. Moving forward, NHTSA
expects manufacturers to remain cognizant of the requirement that each
submission must be submitted not later than 24 months before the
beginning of the affected model year, unless good cause for later
submission is shown. While each good cause claim is evaluated on an
individual basis, NHTSA encourages manufacturers to contact the agency
as early as possible if they begin to expect a petition for exemption
may be delayed. Once a manufacturer is aware of its obligations
regarding petitions for exemption from CAFE standards, arguing that a
company is ``busy simply trying to survive as a small manufacturer'' is
not enough to show good cause for late submission of an exemption
petition.\24\
---------------------------------------------------------------------------

    \23\ 49 CFR 525.6 (``Each petition filed under this part must .
. . Be submitted not later than 24 months before the beginning of
the affected model year, unless good cause for later submission is
shown.'').
    \24\ 56 FR 3517 (Jan. 30, 1991).
---------------------------------------------------------------------------

    When proposing maximum feasible average fuel economy levels, NHTSA
must consider four factors: technological feasibility, economic
practicability, the effect of other motor vehicle standards of the
Government on fuel economy, and the need of the United States to
conserve energy. The agency's consideration of these factors in
relation to low volume manufacturers differs from how the agency
considers these factors for full-line manufacturers; the consideration
of these factors as applied to past model years as compared to future
model years necessarily differs as well.
    ``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.
Historically, for both low volume and full-line manufacturers, NHTSA
has looked at manufacturers' use of fuel-economy improving technologies
for weight reduction and aerodynamic improvements, engine improvements,
and transmission improvements, among other technologies. Moving
forward, NHTSA is also considering another category of technologies,
off-cycle and air conditioning (A/C) efficiency improvement
technologies. These technologies provide fuel economy improvements in
real-world operation, but that improvement cannot be adequately
captured by the 2-cycle test procedures used to demonstrate compliance
with fuel economy standards. These off-cycle and A/C efficiency
improvement technologies fall within the scope of technologies that
manufacturers must discuss in their petitions to the agency,\25\ and
the manufacturer should include any anticipated benefit from those off-
cycle and A/C efficiency improvement technologies in the projected fuel
economy value for each vehicle configuration as required by 49 CFR
525.7(f).
---------------------------------------------------------------------------

    \25\ 49 CFR 525.7(h)(1).
---------------------------------------------------------------------------

    Next, NHTSA considers ``economic practicability'' for petitions
filed under 49 CFR part 525 as meaning the financial capability of the
manufacturer to improve its average fuel economy by making
technologically feasible changes to its passenger automobiles for the
model years under consideration.\26\ Technological feasibility and
economic practicability are often conflated; whether a fuel-economy-
improving technology does or will exist (technological feasibility) is
a different question from what economic consequences could ensue if
NHTSA effectively requires a low volume manufacturer utilize that
technology, and the economic consequences of the absence of consumer
demand for low volume vehicles utilizing that technology (economic
practicability).
---------------------------------------------------------------------------

    \26\ See, e.g., 42 FR 33533 (June 30, 1977).

---------------------------------------------------------------------------

    As part of economic practicability, NHTSA has historically
considered only those technology improvements that would be compatible
with the basic design concepts of the low volume manufacturers'
vehicles. For example, for vehicles exclusively designed to be used for
transporting the wheelchair bound or other mobility-impaired
individuals, NHTSA did not consider design changes that would impair
the ability of the vehicle to perform that function; \27\ for a five-
passenger luxury car, NHTSA did not consider ``design changes that
would make the cars unsuitable for five adult passengers with luggage
or would remove items traditionally offered on luxury cars, such as air
conditioning, automatic transmission, power steering, and power
windows;'' \28\ and for ``exotic high performance cars, design changes
that would remove items traditionally offered on these cars, such as
reducing the displacement of their engines, were not considered.'' \29\
This is because ``[s]uch changes to the basic design could be
economically impracticable since they might well significantly reduce
the demand for these automobiles, thereby reducing sales and causing
significant economic injury to the low volume manufacturer.'' \30\
Market demand has been part of economic practicability considerations
for decades, both in the industry-wide and low-volume CAFE
programs.\31\
---------------------------------------------------------------------------

    \27\ 60 FR 31937 (June 19, 1995).
    \28\ 58 FR 41229 (Aug. 3, 1993).
    \29\ 61 FR 39429 (July 29, 1996).
    \30\ See, e.g., 54 FR 37444 (Sep. 8, 1989); 58 FR 41229 (Aug. 3,
1993), 60 FR 31937 (June 19, 1995); 63 FR 5774 (Feb. 4, 1998).
    \31\ See 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); Public
Citizen v. NHTSA, 848 F.2d 256 (Congress established broad
guidelines in the fuel economy statute; agency's decision to set
lower standards was a reasonable accommodation of conflicting
policies). See also 58 FR 41229 (Aug. 3, 1993) (``Consumers need not
purchase what they do not want.'').
---------------------------------------------------------------------------

    Between different types of low volume manufacturers, different
technologies may or may not be available for commercial application for
certain types of vehicles because of supply chain considerations and
economies of scale. NHTSA has previously recognized that low volume
manufacturers lag in having the latest developments in fuel-economy-
improving technology because suppliers generally provide components to
small manufacturers only after supplying large manufacturers.\32\
Similarly, full-line manufacturers that provide engines and
transmissions to small volume manufacturers may only do so after
developing those parts for use in their own vehicles. In fact, as
discussed below, some manufacturers requesting alternative standards
rely on full-line manufacturers to provide customized engines for their
vehicles.
---------------------------------------------------------------------------

    \32\ See, e.g., 61 FR 39429 (July 29, 1996); 61 FR 67518
(December 23, 1996); 63 FR 5774 (February 4, 1998); 64 FR 73476
(December 30, 1999); 71 FR 49407 (August 23, 2006); 73 FR 34242
(June 17, 2008).
---------------------------------------------------------------------------

    That said, some of the vehicles covered by this proposed decision
employ some of the most advanced fuel-economy-improving technologies
available in the market today, but to improve other vehicle attributes.
For example, as mentioned below, NHTSA generally considers
turbochargers to be an effective technology to improve vehicle fuel
economy; however, a high-performance sports car manufacturer may use
turbochargers to increase vehicle power. Under NHTSA's historical
interpretation of economic practicability for low volume manufacturers,
a low volume manufacturer would justify in its petition to the agency
whether it could direct some performance improvement towards fuel
economy, and if not, why not. This requirement is echoed in NHTSA's
regulations governing petition information: petitioners must include a
discussion of the technological means selected by the petitioner for
improving the average fuel economy of its vehicles and a discussion of
the alternative and additional means considered but not selected that
would have enabled its vehicles to achieve a higher average fuel
economy than it did.\33\
---------------------------------------------------------------------------

    \33\ 49 CFR 525.7(h).
---------------------------------------------------------------------------

    Economic practicability can also encompass considerations like the
manufacturer's ability to refresh and redesign their vehicles based on
the availability of technology, as discussed above, or other factors.
Manufacturers use diverse strategies with respect to when, and how
often, they update vehicle designs. While most vehicles have been
redesigned sometime in the last five years, many vehicles have not.\34\
For low volume manufacturers, that time frame can potentially be even
longer given the nature of their products. Vehicles with lower annual
sales volumes tend to be redesigned less frequently, giving
manufacturers more time to amortize the investment needed to bring the
product to market. To the extent that a manufacturer includes these
economic practicability concerns in their petition for exemption, NHTSA
considers this alongside the evaluation of potential technological
improvements.
---------------------------------------------------------------------------

    \34\ See, e.g., 83 FR 43014 (Aug. 24, 2018) (Table II-3, Summary
of Sales Weighted Average Time between Engineering Redesigns, by
Manufacturer, by Vehicle Technology Class).
---------------------------------------------------------------------------

    NHTSA also considers a low volume manufacturer's ability to improve
fuel economy by changing the mix of vehicle models it sells. Where a
low volume manufacturer only produces one vehicle model, there is no
change that they can make to their fleet sales mix to achieve a higher
fleet average fuel economy level. Where a manufacturer only produces a
handful of vehicle models, there may be slightly more opportunity; \35\
however, a manufacturer's ability to change its fleet mix may also be a
component of its sales strategy, and a limitation of producing such a
niche product. Where ``producing additional models or making some of
the configurations significantly more fuel efficient is not possible
since both corporate financial limitations and the unique market sector
served by [the low volume manufacturer] preclude significant changes to
the basic concept of'' the low volume manufacturers' vehicles, NHTSA
has not previously required those types of changes.\36\
---------------------------------------------------------------------------

    \35\ Because CAFE standards apply to a manufacturer's fleet
rather than to individual vehicles, it is possible for a
manufacturer's fuel economy performance to fluctuate yearly based
not only on changes in the fuel economy of each of its models, but
also based on changes in the production volumes of those models.
There may be situations in which a manufacturer makes no changes to
the fuel economy of any of its models from one year to the next, but
its fleet average decreases because of changes in the production
volumes of the individual vehicle models it produces. This may occur
even when a manufacturer makes improvements in the fuel economy of
one or more individual vehicle models from one year to the next.
    \36\ See 58 FR 41228 (Aug. 3, 1993).
---------------------------------------------------------------------------

    Finally, it is important to note that NHTSA has historically taken
the position that its evaluation of economic practicability does not
consider the ability of the low volume manufacturer to absorb any
potential civil penalties.\37\ This is because if NHTSA considers the
ability to pay a civil penalty as part of economic practicability for
an individual manufacturer, the resulting standard may be higher than
the highest fuel economy level that the manufacturer could achieve.
Considering the ability of a manufacturer to pay civil penalties would
also not conserve any fuel, which would not appear to support EPCA's
underlying purpose of energy conservation and would simply represent a
transfer of money from the manufacturer to the U.S. Treasury. This is
separate from EPCA/EISA's statutory prohibition on the consideration of

trading, transferring, or the availability of credits when setting
maximum feasible standards,\38\ which the agency believes is also
relevant when setting alternative standards for a low volume
manufacturer at the maximum feasible level.\39\ In either case, NHTSA
continues to believe that imposing an unavoidable additional cost on
manufacturers (whether to pay the penalty, or, since the enactment of
the credit trading program in EPCA/EISA, buy credits from another
manufacturer) contravenes Congress' intent to establish maximum
feasible standards for a manufacturer that the manufacturer can
actually achieve.
---------------------------------------------------------------------------

    \37\ See, e.g., 44 FR 3710 (Jan. 18, 1979).
    \38\ 49 U.S.C. 32902(h).
    \39\ While 49 U.S.C. 32902(h) does not point directly to the
exemption provision at 49 U.S.C. 32902(d), it does point to 49
U.S.C. 32902(f), which outlines the factors that NHTSA must consider
when ``deciding maximum feasible average fuel economy.'' NHTSA
believes that when the agency carries out the directive in 49 U.S.C.
32902(d)--to prescribe by regulation an alternative average fuel
economy standard for the passenger automobiles manufactured by the
exempted manufacturer that the Secretary decides is the maximum
feasible average fuel economy level for the manufacturers to which
the alternative standard applies--just as considering the
manufacturer's ability to pay civil penalties would result in a
higher standard than the manufacturer could actually achieve,
forcing the manufacturer to buy credits would also result in a
higher standard than the manufacturer could actually achieve.
---------------------------------------------------------------------------

    Next, NHTSA interprets ``the need of the United States to conserve
energy'' as ``the consumer cost, national balance of payments,
environmental, and foreign policy implications of our need for large
quantities of petroleum, especially imported petroleum.'' \40\ In
determining the impact that establishing an alternative CAFE standard
would have on the need of the United States to conserve energy, NHTSA
has historically taken two approaches. Originally, if the agency
determined the low volume manufacturer could not meet a higher fuel
economy standard than they requested--because it was not
technologically feasible or economically practicable for them to do
so--NHTSA concluded that denying the exemption or setting a higher
alternative standard would not lead to any fuel savings.\41\ Similarly,
if the manufacturer had already produced the vehicles for sale (in the
case of a petition that was granted after the vehicles were built and
sold), NHTSA concluded that denying the exemption or setting a higher
alternative standard would not result in any fuel savings, and would
relatedly have no effect on the need of the United States to conserve
energy.\42\ In later years the agency attempted to quantify the de
minimis impact of granting low volume manufacturer exemption petitions
for illustrative purposes, by estimating the amount of additional fuel
consumed by the exempted fleet over its operating lifetime.\43\
---------------------------------------------------------------------------

    \40\ 42 FR 63184, 63188 (Dec. 15, 1977).
    \41\ See, e.g., 60 FR 31937 (June 19, 1995).
    \42\ See, e.g., 54 FR 40689 (Oct. 3, 1989).
    \43\ See, e.g., 61 FR 46756 (Sep. 5, 1996); 71 FR 49407 (Aug.
23, 2006).
---------------------------------------------------------------------------

    Finally, in considering the impact of other standards of the
Government on fuel economy, NHTSA has historically looked at the weight
impact of its own safety standards, as well as the Environmental
Protection Agency's (EPA) greenhouse gas (GHG) and criteria pollutant
emissions standards. NHTSA is aware that some manufacturers included in
this proposed decision have received a final determination from EPA on
alternative GHG standards for past model years,\44\ standards that are
on average less stringent than EPA's large manufacturer standards, and
invites comment on any new information on the impact of EPA's GHG
standards on the manufacturer's ability to meet an alternative fuel
economy standard that the agency should consider.
---------------------------------------------------------------------------

    \44\ 84 FR 37277 (July 31, 2019); 85 FR 39561 (July 1, 2020).
---------------------------------------------------------------------------

    The following section discusses technological feasibility and
economic practicability individually for each manufacturer, as each
manufacturer employs technology in a different manner to achieve
different objectives. For some manufacturers that have several years of
unanswered petitions, with several vehicle lines, the discussion of
relevant information submitted in their petitions is necessarily longer
than that of a manufacturer that produces only one vehicle type, or
that only has outstanding petitions for a few model years. In addition,
because low volume manufacturers can petition for alternative standards
for periods of three model years at a time,\45\ some petitions docketed
in support of this notice also include requests for alternative
standards for MYs through 2024. Outstanding MY 2024 requests will be
addressed in a subsequent notice.
---------------------------------------------------------------------------

    \45\ 49 CFR 525.9.
---------------------------------------------------------------------------

    Note also, low volume manufacturers generally submit two copies of
their petition to NHTSA, one with confidential business information
(CBI), and one without. CBI includes information like projected sales
volumes for each vehicle, planned future technology application, and
future vehicle models. The information presented below is taken from
the non-CBI materials because even though some model years have passed
(and some MY-specific information like actual production volumes ceases
to be CBI after the model year has passed and that information becomes
knowable), information may still be pertinent to future product plans
or confidential sales strategy may have remained the same over time.
    To assess the impact of setting alternative standards at the levels
proposed herein on the need of United States to conserve energy, NHTSA
presents the calculations for all manufacturers together and separately
by manufacturer. Similarly, the assessment of the effect of other
standards of the Government on fuel economy is presented in a single
section for all manufacturers.
i. Technological Feasibility and Economic Practicability
    NHTSA's regulations at 49 CFR 525.7 request that low volume
manufacturers submit several pieces of information to assist NHTSA in
assessing technologically feasible and economically practicable
improvements for the manufacturer's fleet. This information includes a
description of the technological means selected by the manufacturer for
improving the average fuel economy of its automobiles to be
manufactured in a model year, a chronological description of the
manufacturer's past and planned efforts to implement the fuel-economy-
improving technology in its fleet, a discussion of the alternative and
additional means considered but not selected by the manufacturer that
would have enabled its passenger automobiles to achieve a higher
average fuel economy than is achievable with the means it described,
and in the case of a manufacturer that plans to increase the average
fuel economy of its passenger automobiles to be manufactured in either
of the two model years immediately following the first affected model
year, an explanation of the reasons for not making those increases in
the affected model year.
    As discussed above, the technologies manufacturers generally
discuss in these exemption petitions include technologies for weight
reduction and aerodynamic improvements, engine improvements, and
transmission improvements. Manufacturers have also started using off-
cycle and air conditioning (A/C) efficiency improvement technologies,
which fall within the scope of technologies that manufacturers should
discuss in their petitions to the agency if a manufacturer plans to
apply those technologies in an affected MY.

(a) Aston Martin Lagonda Limited (AML) MY 2008-2023 Vehicles
    Aston Martin Lagonda Limited (AML) is a sports car manufacturer
whose product portfolio for the model years covered by this proposed
decision include the DB9, DBS, DB11, Vantage, Virage, Rapide, and
Vanquish, among others, in multiple engine and body configurations.
    For all model years covered by AML's petitions for alternative
standards, AML only sold vehicles with V8 or V12 engines. With respect
to ongoing engine improvements, AML stated that for MYs 2018 and later
it is downsizing the V12 6.0-liter engine to 5.2 liters, resulting in
reduced fuel use. Other engine technologies for the V12 engine that AML
stated support a reduction in fuel use include turbocharging, reduced
exhaust backpressure, stop-start, cylinder deactivation, electric
thermostat with coolant flow management, and electric/hydraulic power
steering. For the models that use the new 4.0-liter V8 turbocharged
engine, like the new DB11 V8 and Vantage models, AML stated that
similar technology additions helped to realize an additional fuel
economy improvement.
    Starting with MY 2014, AML employed Bosch engine management systems
(EMS) to realize fuel consumption improvements and CO2
emissions reduction through use of other technology enablers such as
start-stop, but due to the small size of the company the application of
additional technologies will be over an extended period. According to
AML's MY 2021 petition in June 2018, all vehicle models included the
Bosch EMS. AML stated that the company is also investigating powerunit
sourcing opportunities to increase vehicle efficiency, although there
are very long lead time changes due to contractual agreements with
suppliers and vehicle architecture modification requirements.
    Since MY 2008, AML's transmissions incorporate six-, seven-, or
eight-speed technologies, and the seven-speed transmission incorporates
a lightweight, low friction design. Starting in 2014, AML began
replacing the previously-used 6-speed ZF automatic transmission with an
8-speed ZF transmission in its vehicles with V12 engines. Per AML, the
DB11 uses an enhanced version of the 8-speed ZF transmission coupled to
a low loss higher ratio final drive to enable further downspeeding of
the V12 engine, thereby enhancing its fuel economy capability. Future
AML models will also use this 8-speed transmission.
    Each of AML's vehicles possesses a body and chassis configuration
that is small, aerodynamic,\46\ and that makes extensive use of
advanced lightweight materials. All major body and mechanical
components of the Virage, DB9, DB11, and Vanquish models are either
aluminum, magnesium alloy, or advanced lightweight composite materials,
resulting in vehicles that are up to 600kg lighter than comparable in
the same class of vehicles.\47\
---------------------------------------------------------------------------

    \46\ The reported aerodynamic drag coefficients for AML vehicles
range from 0.33-0.34 for the early 2010s DB9, Virage, and Vantage
models, to 0.37 for the MY 2020 DB11. Although current mass market
vehicles have now achieved similar aerodynamic drag coefficients,
for high performance vehicles desirable downforce to prevent rear
end lift at high speeds and sufficient powertrain cooling needs
limit further reductions.
    \47\ Likewise, AML stated the company has extensively used
carbon fiber composite material in the vehicles' body panels. All
AML models incorporate an all-alloy underbody structure that
contributes only minimal weight, in addition to the bonnet and roof
that are constructed from a lightweight alloy, while the front
fenders, tailgate, and sills are produced from advanced composites.
Aside from the vehicle body, the engine block design also decreases
weight with use of aluminum material for components that are not
loading points.
---------------------------------------------------------------------------

    In the late 2000s/early 2010s, AML considered using partial
hydraulic/electric or full electric power assist steering (EPAS)
technology that could improve fuel economy, however, it was rejected
because of the scale of development needed for introduction. As
mentioned above, AML's more recent vehicles include this technology.
Similarly, in the early 2010s, AML considered using low friction
lubricants in the V8 engines but rejected them on the basis that 10W60
oil provided the oil-film thickness retention needed to protect the
lead-free main bearings at elevated engine speeds. Since that time,
with the introduction of the 5.2 liter V12 engine, AML has improved
engine friction by adopting advanced engine oil lubrication and is
continuously investigating use of other oil formulations for the
future.
    AML noted in its petitions that its vehicles share underlying
platforms and technologies, which impacts how fuel-economy improving
technologies can be applied throughout its fleet. For example, AML
introduced the ZF 8 speed automatic transmission in MY 2015 following
four years of development to replace all 6-speed transmissions on V12
models apart from the DB9. AML stated that this lead time was
principally driven by the need for new tooled parts and a heavily
revised engine and gearbox calibration.
    Next, AML stated that it is not able to manipulate its model mix.
AML produces only one ``type'' of car, specifically what it
characterizes as high performance/limited production. These vehicles
all have what AML refers to as multi-cylinder large capacity power
units, and in fact for model years that have already passed, AML has
only sold vehicles with V8 or V12 power units in the U.S. market. In
early petitions, AML projected that vehicles with the (relatively) more
fuel efficient V8 engines would exceed sales of vehicles with the V12
engines, however, that did not happen. AML observed that the V8 and V12
vehicles appeal to different market segments and attempting to force
more sales of vehicles with V8 engines was not feasible. Accordingly,
when sales of the V8 models declined relative to projections, as
compared to the V12 model, AML's achieved CAFE level was negatively
affected. Over the model years that NHTSA considered in this proposed
decision, AML projected that the balance of vehicle sales with V8 and
V12 engines would vary in different model years.
    AML also stated that the company is limited to making technology
improvements that are compatible with the basic design concept of its
vehicles, i.e., high performance vehicles. AML stated in its petitions
that it has taken all possible steps to maximize fuel economy within
its existing vehicle range, with recent changes to engine, engine
management, and transmission technology, that has resulted in
incrementally improving fleet fuel economy. AML also stated that its
lightweight and aerodynamic vehicle designs have shown that it has done
as much as possible to improve its vehicles' fuel economy.
(b) Ferrari MY 2016-2018 and 2020 Vehicles
    Ferrari N.V. (Ferrari) is a small volume manufacturer of sports
cars. Ferrari's product portfolio for the model years covered by this
proposed decision includes GT cars (e.g., the GTC4Lusso and California
T) and sports cars (like the F12 Berlinetta and LaFerrari, and 488
Spider and 488 GTB) with a mix of V8 and V12 engines, in addition to
its portfolio of limited series supercars, which include the LaFerrari
Aperta, the F60 America, the F12tdf, GTC4LussoT, and 812 Superfast.
    With respect to powertrain technologies, Ferrari stated that it was
developing new gasoline direct injection technology to target tailpipe
emissions, in addition to a new turbocharged, downsized, and down-
speeded V8 engine family. Ferrari also stated that it is investigating
engines with higher BMEP levels to improve thermal efficiency from
better combustion, with

electric boosting to reduce turbo lag. Ferrari provided specific
technology information on its MY 2015 California T grand tourer,
showing that with the addition of a downsized engine and two
turbochargers, the vehicle achieved an improved fuel economy value of
18.7% over the previous model while still meeting its performance
objectives. The MY 2014 V12 Limited Edition LaFerrari utilized a hybrid
powertrain with a 120kW electric motor and an ultra-lightweight
composite body to achieve a fuel economy of 17.6 mpg.
    Ferrari stated that the mix of vehicles it sells strongly affects
its fleet average fuel economy, though substantial fuel economy
improvements can be seen in each category of vehicles. In evaluating
new vehicle technologies, Ferrari stated that it must consider
maintaining the higher performance and unique driving experience of its
vehicles, customer acceptance, and the impact on overall vehicle
design. Additionally, manufacturing constraints may affect which new
technologies Ferrari can adopt on its vehicles; Ferrari noted that
moving from internal R&D to production vehicles is dependent on
suppliers, and obtaining components from suppliers is more difficult
for Ferrari than for larger companies, especially given the low volume
of vehicles produced and the unique nature of the vehicles' design. The
low volume of components required by the company may cause delays or
project cancellations due to the inability of suppliers to produce
components in a desired timeframe. Additionally, Ferrari stated that it
had not had any assistance regarding vehicle components from Fiat or
Fiat Chrysler when it was still associated with those organizations.
    Ferrari stated that even with a limited model mix and the need to
provide customers with superior performance, handling, and luxury, the
company targeted a fuel economy improvement of 17.4% for its fleet
average fuel economy for MY 2018 as compared to MY 2014. Ferrari stated
that it planned to improve its fleet fuel economy in each of the model
years covered by its petitions.
    Ferrari also initially requested an exemption for its MY 2019
vehicles, but subsequently notified NHTSA that it produced more than
10,000 passenger automobiles globally in 2019 and therefore was not
eligible for small volume manufacturer status. Accordingly, NHTSA did
not consider Ferrari's original MY 2019 request in this notice.
    However, Ferrari has requested an exemption for its MY 2020
vehicles, expecting sales to be below the 10,000 passenger automobiles
globally. The drop in sales is anticipated due to the effects of the
COVID-19 public health emergency.
(c) Koenigsegg Automotive AB MY 2015, 2018-2023 Vehicles
    Koenigsegg Automotive AB (Koenigsegg) is a low volume manufacturer
of high-performance vehicles. For the model years covered by this
proposed decision, Koenigsegg produced the Agera model for 2015 and
2018, the Regera model for 2019-2021, the Jesko model for 2022-2023,
and the Gemera model for 2023.
    Koenigsegg vehicles use smaller displacement engines than many
other specialty manufacturers; the company stated that where other
similarly situated manufacturers often use 6 liters or larger
displacement 10- or 12-cylinder engines, the Koenigsegg engine is a
relatively small 5-liter V8 engine that utilizes twin turbochargers to
facilitate vehicle performance. Koenigsegg also uses lightweight
materials to build its vehicles; carbon fiber is used not only for the
body panels, but for structural parts as well. Additionally, starting
with MY 2019, the company offers only a hybrid drivetrain, consisting
of a conventional combustion engine and three electric motors. That
hybrid drivetrain was not introduced onto MY 2015 and MY 2018 vehicles
because of budget and staff limitations.
    Koenigsegg stated that it was not possible to improve its fuel
economy level in MYs 2015 and 2018-2021 by shifting its fleet mix
because the company only offered one vehicle configuration.
Additionally, for model years 2022 and 2023, the vehicle footprints are
increasing in size for the new vehicle models. Koenigsegg stated that
its budget for research and development into fuel economy improving
technologies is limited because of its small size. Other economic
practicability concerns relevant to this proposed decision include
Koenigsegg's statement that an obligation to meet higher CAFE standards
than requested would ``jeopardize [its] position as a world class
leader of hyper cars.''
(d) McLaren Automotive MY 2012-2023 Vehicles
    McLaren Automotive is a small volume manufacturer of high-
performance vehicles. The vehicles covered by McLaren's petitions
include the MP4-12C, P1, 570S/570GT, and 720S, among others.
    McLaren's independently-developed vehicle models began in 2011 with
the McLaren MP4-12C, which utilized McLaren's independently-developed
engine, the M838T. The M838T is a 3.8 liter downsized, turbocharged 8-
cylinder engine that employs technologies including variable valve
timing to optimize engine efficiency, secondary air injection, and
electronically controlled twin thermostats. The engine also uses
Nikasil-coated aluminum liners for further weight reduction. McLaren
stated the valve timing on the M838T has been calibrated for best fuel
economy under typical road driving speeds and loads, within the
limitations of acceptable combustion stability. From optimizing the
M838T prototype engine to pre-production engine valve timing, McLaren
realized a 4-5% specific fuel consumption reduction. The M838T also
uses friction reduction technology including reduced diameter bearing
journals, the Nikasil-coated cylinder liners mentioned above, low
friction piston skirt coating, superfinished finger followers, and
coated valves in the valvetrain. The piston ring pack has been
developed to meet oil consumption targets with minimum ring tension,
and the use of a dry sump system, allows reduced churning losses in the
crankcase. McLaren uses synthetic Mobil 0W/40 oil in its vehicles, and
stated that the advantages to moving to bespoke oil for its vehicles is
limited; however, McLaren stated that it is investigating other
advanced engine oil formulations.
    McLaren's P1 vehicle is powered by an upgraded version of its M838T
powertrain in parallel with an electric motor, and the vehicle can
operate in either hybrid or electric-only mode. The motor also allows
for energy recovery through regenerative braking. Accordingly, the P1
has achieved an increase in fuel economy over the previous vehicle, the
MP4-12C, while also increasing power.
    The M838T engine is coupled to a 7-speed dual clutch transmission,
which McLaren refers to as its ``Seamless Shift'' dual clutch gearbox
(SSG), and which the company designed to respond to demand for a
``mechanical package that resulted in not only reduced weight and
dynamic control for the entire vehicle, but also improved fuel
consumption and CO2 emissions.'' McLaren stated that the
gear ratios have been optimized for acceptable vehicle performance
while maximizing fuel economy,\48\ and in the transmission's base mode,
``auto normal,'' the shift

points are optimized to provide maximum powertrain efficiency and fuel
economy.\49\ McLaren has explored transmission loss reductions, using
hardware to significantly improve losses from the first prototype
transmission and final validation prototypes. A wide default park
position for the shift clutches also allows for reduced friction
levels, reduced cooling flow to the clutches, contributing to
efficiency at idle. Because there is some performance trade-off for
this park position, the vehicle uses an adaptive strategy to detect
when a higher performance level is required, returning to the low
friction park position once the high-performance demand has subsided.
McLaren also stated that the transmission lubricants have been
optimized to provide the best compromise between fuel economy and
transmission life/service intervals.
---------------------------------------------------------------------------

    \48\ Additionally, McLaren stated that the maximum speed of the
MP4-12C is achieved in 6th gear, leaving 7th gear as a true
``overdrive'' gear intended for maximum fuel efficiency.
    \49\ McLaren stated that the company has conducted extensive
development work to ensure that the default shift schedule has been
optimized to ensure the best possible fuel economy: ``The high
levels of torque available at low engine speeds have been exploited
to improve fuel economy. The engine idle speed has been reduced to
600rpm to minimise the fuel consumption when in this condition. If a
very high level of performance is requested by the driver, the shift
schedule will adapt to this request before returning to the low
engine speed, maximum fuel economy schedule, once the driver demand
is reduced to lighter load driving. This adaption will be completed
after just 20 seconds of light load driving. If the driver is
holding a constant speed around 50kph/30mph then this will trigger a
shortcut and the adaption will be complete within just 4 seconds.''
---------------------------------------------------------------------------

    All of McLaren's vehicles utilize a lightweight carbon fiber
chassis that McLaren has termed the Carbon MonoCell, with the 12C
MonoCell weighing less than 175 pounds. Other mass reduction
opportunities that McLaren has implemented include brakes with forged
aluminum hubs, reduced exhaust path length, airflow-assisted airbrake
deployment, reduced wheel weight, rear-mounted engine cooling radiators
to minimize pipework and the fluid contained within, a downsized engine
coupled to a lightweight transmission, halogen-free compressed wiring,
and a Li-ion battery.
    For aerodynamic improvements, McLaren has increased the MP4-12C
down force while achieving a reduction in the coefficient of drag
relative to the Mercedes SLR McLaren. Techniques used to achieve this
reduction include a more efficient vehicle shape, careful control of
vehicle cooling air, and extensive use of under floor guide vanes to
control wheel wakes while producing downforce with little or no drag
penalties.
    Other commonly employed vehicle technologies that McLaren has
utilized to reduce parasitic losses include an electrically powered
hydraulic steering system, which provides fuel efficiency improvements
over a conventional engine-driven hydraulic pump by removing the need
to continually drive the pump when the pressure is not required.
McLaren has also made electric load improvements by using high
efficiency lamps and series/parallel fan control.
    With respect to economic practicability, McLaren noted that it
invested significantly in the M838T engine, and as a low volume
manufacturer with relatively low sales volumes, a return on investment
must come from carefully considered platform engineering and an
extended lifecycle for the base powertrain. The projected trend for
McLaren's market sector is continued increases in rated power; the
company predicted that a sustained reduction in CO2 (and
accordingly, an increase in fuel economy) would be challenging. McLaren
stated that the company continues to conduct powertrain research and
development to support future emissions and CO2 reductions.
However, McLaren stated that currently, there are no other further fuel
economy improvements that the company can adopt that are compatible
with the basic design concept of its high-performance sports cars.
Similarly, McLaren stated that the company has no opportunity to
improve fuel economy by changing its model mix because all of its
vehicles share a common platform, all using variants of the same power
plant.
    As for future fuel economy improvements, McLaren stated that moving
forward, they have planned a range of other models that will allow the
company to introduce new, innovative technologies designed to improve
efficiency even further. McLaren in 2016 stated that the company
planned to implement hybrid technology on 50% of its fleet by 2022,
with a quarter of planned investment revenue slated for research and
development of new technologies. In 2020, McLaren stated that the
company would implement hybrid technology on 100% of its Sports Series
and Super Series vehicles by 2025.
(e) Mobility Ventures MY 2014-2016 MV1
    Mobility Ventures is a wholly-owned subsidiary of AM General LLC
(``AM General''). AM General is a private company headquartered in
South Bend, Indiana. AM General produces light tactical vehicles for
the military as well as commercial vehicles, both as an original
equipment manufacturer (OEM) and as a contract manufacturer.\50\
---------------------------------------------------------------------------

    \50\ Vehicles manufactured and certified by AM General in the
past, such as the road-legal variant of the Hummer, were likely not
passenger automobiles or non-passenger automobiles subject to the
CAFE program, and thus would not have needed to apply for exemption
from CAFE standards.
---------------------------------------------------------------------------

    Prior to forming Mobility Ventures in late 2013, AM General
contracted with the now-defunct Vehicle Production Group LLC (``VPG'')
to assemble their MV-1 vehicle at AM General's Commercial Assembly
Plant in Mishawaka, Indiana. The MV-1 is a vehicle specifically
engineered from the ground up to address the unique requirements and
limitations of wheelchair users and other people with disabilities.
Production of the VPG MV-1 began in 2011 and ended in February 2013
when VPG ceased operations. In September 2013, AM General acquired the
assets of VPG and formed Mobility Ventures to assume engineering,
production, and distribution of the MV-1. Production of the MV-1
resumed under the Mobility Ventures brand in March 2014. Production of
the MV-1 ceased in late 2015, with MY 2016 being the final model year.
    In its petition, Mobility Ventures listed and described several
fuel-saving technologies that it applied to its vehicles for MYs 2014-
2016 including engine and transmission technologies. Mobility Ventures
noted that, ``after acquiring the assets of VPG in 2013, Mobility
Ventures put the MV-1 into production without modifying the vehicle
from VPG's 2012 model year configuration,'' due to time constraints.
For MY 2014, Mobility Ventures offered a compressed natural gas (CNG)
variant of the 4.6L V8 engine which achieved a fuel economy value of
114.7 mpg, substantially higher than the 18.4 mpg achieved by the
gasoline-powered variant. Starting with MY 2015, Mobility Ventures
retired the 4.6L V8 engine in favor of a more efficient 3.7L V6 engine.
Also for MY 2015, Mobility Ventures replaced the 4-speed transmission
with a more efficient 6-speed transmission. Implementation of this
downsized engine and more advanced transmission resulted in a 9.8%
increase in fuel economy for the MY 2015 MV-1 as compared to the
gasoline-powered MY 2014 MV-1. The MV-1 retained the MY 2015
configuration for MY 2016.
    Mobility Ventures did not consider any changes for the MY 2014 MV-1
since it elected to resume MV-1 production without delay following its
acquisition of VPG in late 2013. Mobility Ventures planned to offer a

CNG version of the MV-1 for MY 2015. However, CNG calibration issues
arose in transitioning to the more fuel efficient 3.7L V6 engine.
Mobility Ventures considered technical solutions proposed by the fuel
injector manufacturer but could not justify the substantial added cost
given the weak demand for the CNG version of the vehicle.
(f) Pagani Automobili S.p.A MY 2014 and 2016-2023 Vehicles
    Pagani Automobili S.p.A. (Pagani), formerly Modena Design S.p.A.,
is an Italian corporation formed in 1991 and owned by the Pagani
family. Pagani began manufacturing Pagani-brand sports cars in 1999,
first producing the Zonda, then Huayra,\51\ both in very low volumes.
For the model years covered by Pagani's petitions, the company's
product portfolio includes the Huayra (C9), Huayra BC (C9N), and Huayra
Roadster (C9R). The company estimated that it had a total production
capacity of no more than 50 vehicles per year, with approximately 20 of
those vehicles built to U.S. specifications.
---------------------------------------------------------------------------

    \51\ The corresponding model numbers for vehicles covered by
this petition are C8 and C9. As of the date that Pagani submitted
its MY 2012-2014 petition, the C9 had not yet been named Huayra.
---------------------------------------------------------------------------

    Pagani's first vehicle, the Zonda, was a high-performance sports
car powered by a Mercedes-Benz 12-cylinder engine. The Huayra, the
vehicle replacing the Zonda, received a new engine, the M158 engine,
which was more powerful than the previous engine but also smaller,
further reducing weight and increasing efficiency. Pagani stated in its
MY 2015-2017 petition that the M158 engine was homologated to meet the
strictest environmental regulations, which at that time were EU5 and
LEV2. Additionally, despite the increase in power compared to other
Mercedes-AMG V12 engines developed for Pagani, the engine has reduced
CO2 emissions and fuel consumption, ``to make the Pagani
Huayra class leading amongst 12 cylinder sports cars with values that
are respective of much smaller vehicles in the market.'' Pagani's MY
2018-2020 petition also stated that a new developed engine is expected
for introduction in MY 2018.
    Pagani stated in its MY 2012-2014 petition that the Huayra makes
extensive use of lightweight materials, including carbon fiber in the
chassis and panels, and chromoly steel space frames. Pagani stated in
its MY 2015-2017 petition that the central monocoque on the Huayra had
been updated to an entirely new design made from carbontitanium, and
structural and non-structural weight reduction strategies like
integrating all ventilation air ducts into the monocoque's structure
contributed to the vehicle's weight of 1,350 kg (2976.24 lbs), making
the Huayra ``the lightest sports car in its class.'' Pagani stated that
the Huayra design optimizes aerodynamics to achieve a coefficient of
drag value of 0.35, which also allows for greater efficiency. Finally,
the Huayra employs low rolling resistance Pirelli P Zero tires to
reduce CO2 emissions and fuel consumption.
    Pagani stated that the unique nature of the company's product line
does not lend itself to high fuel economy values, and accordingly there
are no additional fuel economy improvements that it could adopt that
are compatible with the basic design concept of a traditional sports
car. Similarly, Pagani stated that it cannot improve its fuel economy
by changing its model mix because it only sells one vehicle model in
the United States, which uses the Mercedes-Benz engine. Because Pagani
does not produce its own engine, the company stated that it is
constrained in making additional improvements to the vehicle
powertrain. Beyond the technologies described above, Pagani stated that
there are no further fuel economy improvements for the company to adopt
that are compatible with the basic design concept of its vehicles.
(g) Spyker Automobielen B.V. MY 2008-2010 Vehicles
    Spyker Automobiles produces limited-production sports cars, built
to individual order.\52\ The vehicles covered by Spyker's MY 2008-2010
petition include different variants of its C8 vehicle.\53\
---------------------------------------------------------------------------

    \52\ At the time that the entity that produced Spyker vehicles
petitioned NHTSA for alternative standards, that entity was Spyker
Automobielen B.V. That entity is now Spyker N.V., however it does
not seem that Spyker has produced vehicles for sale in the U.S.
market from the time of the 2008-2010 petition.
    \53\ At the time of its petition, Spyker was also planning to
produce a Super Sport Utility Vehicle (SSUV) and mentioned that
vehicle in their petition. However, 49 U.S.C. 32902(d) limits the
applicability of an exemption to passenger automobiles produced by
the manufacturer requesting the exemption.
---------------------------------------------------------------------------

    Spyker's vehicle uses a LEV V8 powertrain from the Audi A8 coupled
with a Bosch ME-7 engine management system. Spyker stated that this 4.2
L Audi V8 engine is the most advanced engine available to a small
vehicle manufacturer seeking an engine from an outside source. Spyker
stated that its vehicles are both lightweight and aerodynamic; the
chassis is made of aluminum and the vehicle in total weighs in at 1346
kg (2967 pounds). The coefficient of drag of the vehicle is 0.41 with
the roof off, and 0.38 with the roof on.
    Spyker stated that the high-performance nature of its product line
generally does not lend itself to high fuel economy values, and the
company is not able to manipulate model mix because the company was
created to sell limited numbers of high-performance automobiles.
Accordingly, Spyker stated that there is no room for CAFE changes based
on marketing actions. Spyker also stated that it has no opportunity to
improve fuel economy by changing its model mix because it would only
export three high performance models to the United States in MYs 2008-
2010, all using the Audi V8 or V12 engines. Spyker also stated the
company had invested millions of dollars (at the time of the MY 2008-
2010 petition) in design, development, homologation, and the start of
production, and the company is financially constrained in making
additional fuel economy improvements because of the large investment in
start-up and producing new models. In sum, Spyker stated that producing
more fuel-efficient models or making existing configurations
significantly more fuel efficient is not possible.
ii. The Need of the United States To Conserve Energy
    Many of the manufacturers considered in this notice noted that they
were not unmindful of energy issues facing the United States today,
including both energy conservation and climate change. Several
manufacturers noted however, that the extremely low sales volumes of
their vehicles, coupled with the fact that, in the case of many high-
performance sports cars, they are ``almost exclusively used as a second
or third car (and hence infrequently),'' \54\ meant that these vehicles
had a ``virtually immeasurable'' effect on U.S. energy consumption.\55\
As discussed further below, some manufacturers also submitted
additional data estimates on how many miles their vehicles are driven
per year, or estimates of how much fuel their fleet of vehicles is
estimated to consume over time, and the agency confirmed these
estimates with an independent evaluation of vehicle miles travelled
(VMT) data performed for this notice.
---------------------------------------------------------------------------

    \54\ See, e.g., McLaren CAFE Exemption Petition for MYs 2021-
2023.
    \55\ Id.
---------------------------------------------------------------------------

    As mentioned above, when independently evaluating the impact that
establishing an alternative CAFE

standard would have on the need of the United States to conserve
energy, NHTSA has historically taken two approaches. For several years,
the agency categorically concluded that if it had already determined
that it would not be technologically feasible or economically
practicable for the low volume manufacturer to achieve a higher fuel
economy standard than requested, denying the exemption or setting a
higher alternative standard would not have had any effect on the need
of the United States to conserve energy.\56\ In later years the agency
attempted to quantify that de minimis impact for illustrative purposes,
by estimating the amount of additional fuel consumed by the exempted
fleet over their operating lifetime.\57\
---------------------------------------------------------------------------

    \56\ See, e.g., 54 FR 40689 (Oct. 3, 1989).
    \57\ See, e.g., 61 FR 46756 (Sep. 5, 1996), 71 FR 49407 (Aug.
23, 2006).
---------------------------------------------------------------------------

    In brief, the estimated amount of additional fuel consumed by the
exempted fleet over its operating lifetime is a function of the
difference between the manufacturer's actual CAFE standard and their
requested alternative standard multiplied by the manufacturer's
estimated U.S. production volume, multiplied then by an estimate of the
total miles these vehicles could travel as an active part of the
fleet.\58\ The resulting difference is then divided by the average
number of gallons that the total U.S. automotive fleet uses.\59\ The
final value shows the fleet's additional gallons of fuel use as a
percentage of total U.S. automotive fuel use.
---------------------------------------------------------------------------

    \58\ NHTSA estimated the lifetime miles for vehicle classes as
part of the SAFE Final Rule analysis. See SAFE Final Rule
``paramters_ref.xlsx'' file, available for download at https://www.nhtsa.gov/corporate-average-fuel-economy/compliance-and-effects-modeling-system.
    \59\ U.S. Energy Information Administration Monthly Energy
Review March 2020, Table 3.7c Petroleum Consumption: Transportation
and Electric Power Sectors, available at https://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf.
---------------------------------------------------------------------------

    Unique to the analysis for this proposed action is that for model
years that have already passed, for which NHTSA has final verified fuel
economy values from EPA or final data submitted to EPA by
manufacturers, those values are used instead of the proposed
alternative standard. In a majority of cases, the manufacturers
achieved a higher fleet fuel economy value than they requested for a
given model year.
    Additionally, because projected U.S. production volumes for some
fleets are still CBI at this time, or because NHTSA does not have final
production data from EPA for some completed model years, NHTSA averaged
each manufacturers' latest three years of verified production data to
present estimates of potential future fuel use for those model years.
NHTSA considered assuming that every manufacturer would produce the
maximum 10,000 vehicles in MYs 2019 and later, or that each
manufacturer would produce 5,000 vehicles in MYs 2019 and later,
although these assumptions were not supported by historical data. NHTSA
seeks comment on this approach, in addition to any alternative
assumptions that the agency should employ in estimating the amount of
additional fuel consumed by a fleet granted an alternative CAFE
standard. Note again, these projections are only used to estimate the
potential future fuel use of a manufacturer's fleet; a fleet's actual
fuel use is dependent factors like an individual vehicle owner's
driving patterns. As discussed below, many of the vehicles considered
in this notice are driven infrequently, if at all.
    For the quantitative estimate presented today, NHTSA also developed
new assumptions about low volume vehicle lifetime mileage that more
accurately captures how some low volume vehicles are driven.\60\ For
reference, the Federal Highway Administration's (FHWA) 2017 National
Household Travel Survey (NHTS) best available estimate for average
miles driven per vehicle is 11,128 miles per year for the category of
vehicle that includes automobiles, cars, and station wagons.\61\
NHTSA's new calculated yearly VMT for high performance vehicles is
2,543 miles per year. Note, as discussed below, that NHTSA used the
FHWA's 2017 NHTS best available VMT estimate for cars for Mobility
Ventures' fleet, as the agency does not believe that the driving
patterns of mobility vehicles are accurately represented by the data
used to calculate an average yearly VMT value for high performance
vehicles. The agency seeks comment on this approach, in addition to any
other data or information on the driving patterns and mileage schedules
of vehicles used to transport wheelchair bound or otherwise mobility
impaired individuals.
---------------------------------------------------------------------------

    \60\ Historically, low volume manufacturer petitions for
exemption from CAFE standards have covered luxury vehicles, exotic
high-performance vehicles, and vehicles exclusively designed to be
used for transporting the wheelchair bound or other mobility-
impaired individuals.
    \61\ See Developing a Best Estimate of Annual Vehicle Mileage
for 2017 NHTS Vehicles, available at https://nhts.ornl.gov/assets/2017BESTMILE_Documentation.pdf.
---------------------------------------------------------------------------

    To estimate an average yearly VMT schedule for high performance
vehicles, NHTSA consulted an IHS/Polk dataset that includes more than
74 million unique odometer readings across 16 model years (2000-2015).
NHTSA used over 10,000 odometer readings from vehicles produced by
Aston Martin, Ferrari, and McLaren from MY 2000 to MY 2014.
Specifically, NHTSA used the average odometer reading for vehicles of
each manufacturer, model, and model year, and the average age of the
vehicle in calendar year 2014 (when the majority of odometer readings
occurred). NHTSA then divided the average odometer reading by the
average age for each vehicle to arrive at an estimate of average miles
traveled per year of use. Averaging all the unique make, model, and
model years for which there is data (approximately 200 unique
combinations), resulted in an average usage of 2,543 miles per year.
    Although this is a relatively small sample that only considers
manufacturers for which there is readily-available data, it more
closely tracks what low volume manufacturers (specifically in this case
of what could be considered high performance vehicles) claim the
impacts of their vehicles would be on overall fuel use. For example,
AML's MY 2019 petition (and other manufacturers have shared similar
sentiments) stated that their vehicles' impact on energy consumption is
de minimis, ``not only because of the tiny volume of cars, but also
because the vehicles tend to be used very infrequently (as a second or
third car) and therefore have a very low VMT (vehicle miles travelled)
value per annum.'' Similarly, Pagani stated that, in fact, ``[s]ome
customers choose to not drive the cars at all and view the cars as
investments to be stored for future sale. Most others will choose to
drive the car sparingly as a weekend trophy car.'' More recently, in
its MY 2022 petition, AML stated that ``AMLs current understanding is
that VMT [for its vehicles] is in the order of 2500 miles per annum.''
    We seek comment on this new approach, in addition to any other data
or information on yearly VMT for vehicles that would generally qualify
under NHTSA's low volume manufacturer provision. If commenters believe
that a higher VMT assumption would be appropriate for making this
calculation, it would be most helpful to the agency for commenters to
provide specific data or citations underlying that belief, ideally data
that could be made public. Additionally, as mentioned above, NHTSA did
not believe that it was appropriate to use the calculated value for
high performance vehicles for the Mobility Ventures fleet, as odometer

readings from high performance sports cars would likely not be
representative of the average usage of mobility vehicles. NHTSA seeks
comment on any data or information that would help to inform the
agency's yearly VMT schedule for these vehicles.
    NHTSA estimates that the additional fuel consumed by the LVM fleets
at the proposed alternative standards level is as follows:

         Table 1--Estimated Additional Lifetime Fuel Consumption
------------------------------------------------------------------------
                                                         Percentage of
                                         Additional     total U.S. motor
             Manufacturer               lifetime fuel     vehicle fuel
                                         consumption    consumption over
                                          (gallons)    lifetime \62\ (%)
------------------------------------------------------------------------
Aston Martin MY 2008-2023............      17,752,742           0.000838
Ferrari MY 2016-2018 and 2020........       7,668,471           0.000362
Koenigsegg MY 2015, 2018-2023........          58,029         0.00000274
McLaren MY 2012-2023.................       7,845,563           0.000370
Mobility Ventures MY 2014-2016.......       6,186,748           0.000292
Pagani MY 2014, 2016-2023............         200,428         0.00000946
Spyker MY 2008-2010..................          57,469        0.000002712
                                      ----------------------------------
    Total............................      39,769,449          0. 001877
------------------------------------------------------------------------

iii. The Effect of Other Standards of the Federal Government on Fuel
Economy
    NHTSA has determined that ``other motor vehicle standards of the
Government'' that affect fuel economy include its own safety standards
as well as EPA's emissions standards, which include criteria pollutant
and now greenhouse gas ((GHG), which include CO2,
N2O, CH4, and hydrofluorocarbons) emissions
standards. While NHTSA regulates fuel economy and EPA regulates GHGs,
and has done so sometimes in joint rules, differences in the agencies'
statutory authorities make it so that each agency is required to make
an independent judgment about the level of standards that is
appropriate.\63\
---------------------------------------------------------------------------

    \62\ See U.S. Energy Information Administration Monthly Energy
Review March 2020, Table 3.7c Petroleum Consumption: Transportation
and Electric Power Sectors, available at https://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf. This includes an average
estimate of 8.9 million barrels/day of motor gasoline consumed by
vehicles in the United States.
    \63\ See 85 FR 24174, 25137 (April 30, 2020).
---------------------------------------------------------------------------

    This is the first time that NHTSA has had the opportunity to
consider EPA's small volume manufacturer GHG standards in the context
of CAFE low volume petitions for exemption. Just as there are
differences in the agencies' statutory directives that require
programmatic differences between the fuel economy and greenhouse gas
emissions light-duty vehicle programs, differences exist between each
agency's low or small volume manufacturer exemption program. EPA's
small volume manufacturer regulations, finalized in 2012,\64\ defined
the process for exemptions from GHG standards \65\ differently from the
NHTSA program by expanding applicability to light trucks, and lowering
the eligibility requirements to only 5,000 vehicles produced in the
United States.\66\ For NHTSA's program, both the 10,000 vehicle
worldwide production limit on eligibility and sole applicability to
passenger cars were terms prescribed by Congress in the 1970s.\67\
---------------------------------------------------------------------------

    \64\ 77 FR 62624, 62789 (Oct. 15, 2012).
    \65\ 77 FR 62624, 62789 (Oct. 15, 2012).
    \66\ To be eligible for alternative standards established under
the EPA program, the manufacturer's average sales for the three most
recent consecutive model years must remain below 5,000. If a
manufacturer's average sales for the three most recent consecutive
model years exceeds 4999, the manufacturer will no longer be
eligible for exemption and must meet applicable emission standards
starting with the model year. See 40 CFR 86.1818-12(g)(1). In
contrast, as discussed above, 49 U.S.C. 32902(d)(1) makes clear the
exemption applies to manufacturers that manufacture worldwide fewer
than 10,000 passenger automobiles in the model year 2 years before
the model year for which the application is made, and in the
applicable model year. In addition, 49 U.S.C. 32902(d)(1)(B) makes
clear the exemption and alternative standard only applies to
passenger automobiles.
    \67\ 42 FR 38374 (July 28, 1977).
---------------------------------------------------------------------------

    Three manufacturers considered in this notice (Aston Martin,
Ferrari, and McLaren) recently received an alternative low volume
standard under the EPA small volume program for vehicles manufactured
in MYs 2017-2021.\68\ For the first four model years of the program,
MYs 2017-2020, EPA proposed and adopted the alternative standards
requested by the manufacturers. For MY 2021, EPA finalized MY 2021
standards for McLaren reflecting 3 percent year-over-year reductions
from a MY 2017 baseline year.\69\
---------------------------------------------------------------------------

    \68\ 85 FR 39561 (July 1, 2020).
    \69\ 85 FR 39561, 39563 (July 1, 2020).
---------------------------------------------------------------------------

    NHTSA must set alternative standards at the maximum feasible
average fuel economy level for the manufacturer to which the
alternative standard applies.\70\ This means that, as discussed further
below, NHTSA believes that the agency cannot set alternative standards
for a manufacturer for past model years at the level that the
manufacturer requested, if that level is lower than the fuel economy
level than the manufacturer actually achieved. In fact, it is
frequently the case that the manufacturers achieved a higher fuel
economy value than they requested. NHTSA believes that, accordingly,
the requested fuel economy value is not the maximum feasible fuel
economy level that the manufacturer could have achieved in that model
year, and is proposing to set standards at the fuel economy values that
manufacturers achieved for past MYs.
---------------------------------------------------------------------------

    \70\ 49 U.S.C. 32902(d).
---------------------------------------------------------------------------

    EPA's final rule also stated that in determining GHG standards for
some manufacturers in MY 2021, EPA considered that those standards can
be met ``through the use of credits, including air conditioning and
off-cycle credits, and the use of program flexibilities including
credit carry-forward and credit carry-back within the lead time
available.'' \71\ As discussed above, NHTSA does not consider the
availability of credits when prescribing a maximum feasible average
fuel economy standard under the low volume CAFE exemption program. In
addition, in NHTSA's program, the

additional fuel economy benefit from air conditioning and off-cycle
technology is added to a vehicle's fuel economy value, and is not a
``credit'' that can be traded or transferred. Accordingly, as discussed
above, a manufacturer that plans to use air conditioning and off-cycle
technology should include any anticipated benefit from those
technologies in the projected fuel economy value for each vehicle
configuration as required by 49 CFR 525.7(f).
---------------------------------------------------------------------------

    \71\ 84 FR 37281 (July 31, 2019).
---------------------------------------------------------------------------

    The following table shows differences between EPA's final small
volume standards (g/mile) \72\ and NHTSA's proposed alternative
standards (mpg).
---------------------------------------------------------------------------

    \72\ 85 FR 39561, 39564 (July 1, 2020), Table 4--Summary of
Standards and Per-Manufacturer GHG Reductions (g/mile).

                                 Table 2--EPA and NHTSA LVM Standard Comparison
----------------------------------------------------------------------------------------------------------------
                                                                    EPA LVM STD    EPA LVM  STD
          Model year              Manufacturer    EPA LVM STD (g/   equivalent      equivalent     NHTSA LVM STD
                                                        mi)          (gal/mi)          (mpg)           (mpg)
----------------------------------------------------------------------------------------------------------------
2017..........................  Aston Martin....             431     0.048497806            20.6            21.4
                                Ferrari.........             421     0.047372567            21.1            21.5
                                McLaren.........             372     0.041858895            23.9            24.3
2018..........................  Aston Martin....             396     0.044559469            22.4            22.9
                                Ferrari.........             408     0.045909756            21.8            21.6
                                McLaren.........             372     0.041858895            23.9            23.3
2019..........................  Aston Martin....             380     0.042759086            23.4            22.4
                                Ferrari.........             395     0.044446945            22.5  ..............
                                McLaren.........             368     0.041408799            24.1            22.5
2020..........................  Aston Martin....             374     0.042083943            23.8            22.6
                                Ferrari.........             386      0.04343423            23.0            21.1
                                McLaren.........             360     0.040508608            24.7            22.5
2021..........................  Aston Martin....             376     0.042308991            23.6            24.9
                                Ferrari.........             377     0.042421515            23.6  ..............
                                McLaren.........             334     0.037582986            26.6            21.5
----------------------------------------------------------------------------------------------------------------

    NHTSA invites comment on any new information on the impact of EPA's
GHG standards on a manufacturer's ability to meet an alternative fuel
economy standard that the agency should consider.
    In regards to the impact of vehicle safety standards on CAFE
values, AML stated that Federal Motor Vehicle Safety Standard (FMVSS)
No. 214, Side Impact Protection, FMVSS No. 216, Roof Crush Resistance,
FMVSS No. 226, Occupant Ejection Mitigation, and FMVSS No. 301, Fuel
System Integrity, could have potential adverse impacts on its vehicles'
achieved fuel economy levels, requiring increased mass to body and
frame structures. Additionally, AML stated that it must consider the
Pedestrian Protection requirements as proposed in the UN ECE Global
Technical Regulation (GTR) No. 9 due to economies of scale. GTR No. 9
would require increased deformation resistance to body and frame
structures, which translate into additional weight.\73\
---------------------------------------------------------------------------

    \73\ To the extent that GTR No. 9 adds additional weight and AML
has modified its entire fleet of production vehicles based on
economies of scale to meet that standard, NHTSA understands that is
factored into AML's assessment of the maximum feasible fuel economy
level that its fleet could achieve.
---------------------------------------------------------------------------

    Ferrari stated that FMVSS No. 216, Roof Crush Resistance, FMVSS No.
226, Occupant Ejection Mitigation, and FMVSS No. 214, Side Impact
Protection, affect vehicle weight and aerodynamics, and other aspects
of vehicle design. Ferrari also stated that they face challenges
regarding compliance with the EPA and California Tier 3 tailpipe and
evaporative emissions standards.
    Koenigsegg stated that the Federal motor vehicle standards
regarding outside rear view mirrors have a significant effect on fuel
economy, and that if outside rear view mirrors are replaced by camera
systems, fuel economy will improve significantly.
    McLaren cited FMVSS No. 214, Side Impact Protection, FMVSS No. 216,
Roof Crush Resistance, and FMVSS No. 301, Fuel System Integrity, as
safety standards that have impacts on McLaren's achievable fuel
economy. McLaren also stated that crashworthiness standards generally
tend to decrease fuel economy, since they can preclude, in some
instances, the use of lighter-weight components. McLaren additionally
cited EPA's Tier 3 emissions rule as a requirement that would demand
resources (both financial and personnel) and a balancing of priorities
for the company to comply with all government standards.
    Mobility Ventures did not identify any other motor vehicle
standards that affect the fuel economy achieved or achievable by the
MV-1.
    Pagani stated that the company's small size limits the amount of
resources it can apply to comply with both the mandatory safety and
emissions standards and fuel economy requirements (citing NHTSA's
proposed and final decisions for Spyker's MY 2006 and 2007 exemption
request).\74\ Similarly, Pagani cited NHTSA's proposed decision for
DeTomaso Automobiles' MY 2000 and 2001 vehicles for the proposition
that crashworthiness standards can generally tend to reduce achievable
CAFE,\75\ since they preclude, in some instances, the use of lighter
weight components. Pagani stated that other safety standards that would
demand the company's resources, and that could have weight and fuel
economy consequences, include upgraded FMVSS No. 301, Fuel System
Integrity requirements, upgraded FMVSS No. 214, Side Impact Protection,
and upgraded FMVSS No. 216 Roof Crush Resistance.
---------------------------------------------------------------------------

    \74\ 71 FR 49407 (Aug. 23, 2006), 72 FR 28619 (May 22, 2007).
    \75\ 64 FR 73476 (Dec. 30, 1999).
---------------------------------------------------------------------------

    Spyker stated in its petition for MYs 2008-2010 that California's
emissions standards will apply to the company in MY 2006, and the Tier
2-LEV II exhaust standards are applicable in 2007. Accordingly, the
company's limited engineering resources would have to be expended to
comply with those more stringent standards. With respect to safety,
Spyker stated that crash-worthiness standards tend to reduce achievable
CAFE because they preclude, in some instances, the use of lighter-

weight components. Spyker also stated that smaller companies with
limited resources must give priority to compliance with safety
standards. Spyker had until June 2008 to develop FMVSS No. 208,
Occupant Crash Protection compliant advanced air bags (under a NHTSA
temporary exemption), which the company stated would add additional
weight, and Spyker stated that FMVSS No. 301, Fuel System Integrity
would also demand additional resources.
    To determine the additional weight that federal motor vehicle
safety standards would have on these vehicles, to determine the impact
of the standards on fuel economy, NHTSA used published estimates from
the MYs 2017-2025 Light-Duty Vehicle Greenhouse Gas Emission Standards
and Corporate Average Fuel Economy Standards Final Regulatory Impact
Analysis (FRIA).\76\ Table IV-3a in the FRIA shows estimated weight
increases for each FMVSS that would become effective between MY 2008
and MY 2018 for passenger vehicles and light trucks, comparing MY 2025
to the MY 2008 baseline fleet.\77\ The passenger car values are
reproduced below.
---------------------------------------------------------------------------

    \76\ Final Regulatory Impact Analysis, Corporate Average Fuel
Economy for MY 2017-MY 2025 Passenger Cars and Light Trucks, Table
IV-3a (August 2012).
    \77\ Id. at 119. Note, in the MY 2017-2025 Light-Duty CAFE and
GHG Rule, the agencies analyzed two baseline fleets, a 2008 baseline
fleet and a 2010 baseline fleet. The difference in total added
weight for passenger cars between the two fleets is 5.13 pounds
(32.31 added pounds for the 2008 fleet and 27.18 added pounds for
the 2010 fleet). NHTSA believes that the 5.13 pound difference
between the two estimates is trivial; however, the agency decided to
use the more conservative 2008 fleet estimates for this analysis.
    \78\ 49 CFR 571.214.
    \79\ 49 CFR 571.215.
    \80\ 49 CFR 571.226.
    \81\ 49 CFR 571.301.

Table 3--MY 2017-MY 2025 FRIA, Table IV-3a Weight Additions Due to Final
                  Rules or Potential NHTSA Regulations
------------------------------------------------------------------------
                                                           Added weight
           Standard No.                     Title            (pounds)
                                                          passenger cars
------------------------------------------------------------------------
126...............................  Electronic Stability            2.12
                                     Control Systems.
206...............................  Door Locks and Door             0.00
                                     Retention
                                     Components.
214 \78\..........................  Side Impact                    12.43
                                     Protection.
216 \79\..........................  Roof Crush                     11.65
                                     Resistance.
226 \80\..........................  Occupant Ejection               2.00
                                     Mitigation.
301 \81\..........................  Fuel System                     1.11
                                     Integrity.
Pedestrian Protection.............  ....................  Not quantified
                                   -------------------------------------
    Total.........................  ....................           32.31
------------------------------------------------------------------------

    As NHTSA stated in the FRIA, these weight estimates, which are
based on cost and weight tear-down studies of a few vehicles, cannot
possibly cover all the variations in a manufacturer's fleet. Rather,
these represent rough averages of potential per-vehicle weights that
could be incurred. This is even truer for the vehicles considered in
this petition, which, as discussed above, use a high proportion of
advanced lightweight materials like carbon fiber reinforced plastics.
That said, for purposes of this analysis, NHTSA believes that these
weight values are reasonable to use to consider potential impacts on
vehicle weight, as the agency does not now have updated weight
estimates or estimates specifically for the specialized vehicle types
considered in this proposed decision. Additionally, because of the
lateness of the agency's response to these petitions, much of the
projected weight difference may already be included on manufacturers'
vehicles. It is possible that these values might overestimate any
potential future weight impacts that may compete with manufacturers'
ability to reduce weight to better achieve fuel economy improvements.
The agency seeks comment on the methodology used, in addition to any
specific information (including tear-down studies, etc.) that could
better inform this analysis.
    Based on the agency's weight-versus-fuel-economy algorithms as
applied in the 2012-2016 CAFE FRIA,\82\ a 3-4-pound increase in weight
is projected to reduce fuel economy by 0.01 mpg. A manufacturer that
had to comply with all additional FMVSS that NHTSA considered in the
2017-2025 final rule would add 32.31 pounds to a passenger car in MY
2025 versus a baseline 2008 passenger car, for an approximate fuel
economy penalty of 0.09 mpg. Based on these estimates, NHTSA believes
that it is reasonable to conclude that the small increase in weight
from the FMVSSs would have negligible effects on any LVM fleet
considered in this proposed decision.
---------------------------------------------------------------------------

    \82\ Final Regulatory Impact Analysis, Corporate Average Fuel
Economy for MYs 2012-2016 Passenger Cars and Light Trucks, Table IV-
5 (March 2010).
---------------------------------------------------------------------------

    As to the impact that criteria pollutant emissions standards would
have on a LVM's maximum feasible fuel economy level, EPA stated in its
final rule establishing Tier 3 motor vehicle emissions and fuel
standards that they ``do not expect the Tier 3 vehicle standards to
result in any discernible changes in vehicle . . . fuel economy.
Emissions of the pollutants that are controlled by the Tier 3 program--
NMOG, NOX, and PM--are not a function of the amount of fuel
consumed, since manufacturers need to design their catalytic emission
control systems to reduce these emissions regardless of their engine-
out levels.'' \83\ Moreover, EPA established special flexibility
provisions for small businesses subject to the Tier 3 standards, which
include small volume manufacturers (SVMs) that sell less than 5,000
vehicles per year in the United States.\84\ In the Tier 3 final rule,
EPA stated that the agency ``have found no fundamental reason why,
given sufficient lead time, all manufacturers, regardless of company
size and vehicle characteristics, will not be able to meet the Tier 3
standards,'' but also established an optional alternative phase-in
schedule for SVMs and non-SVM small businesses to meet the
standards.\85\ Given these findings, NHTSA believes that it is
reasonable to conclude that criteria pollutant emissions standards
would have a negligible effect on any low volume

manufacturer's maximum feasible fuel economy level.
---------------------------------------------------------------------------

    \83\ 79 FR 23446 (April 28, 2014).
    \84\ 79 FR 23534 (April 28, 2014).
    \85\ Id.
---------------------------------------------------------------------------

3. Proposed Maximum Feasible Average Fuel Economy for Exempted
Manufacturers

    With these considerations taken together, NHTSA proposes to set
alternative average fuel economy standards for these seven
manufacturers for each model year at the following levels: NHTSA has
received final fuel economy data from EPA for MYs 2008-2017 for all
LVMs that have outstanding petitions for those years, and is proposing
to use those final EPA values for those years. For MY 2018, NHTSA has
some final EPA values for petitioning manufacturers' fleets, but not
all; where NHTSA has a final EPA value for a manufacturer, NHTSA
proposes to set the manufacturer's alternative standard at that level.
Where NHTSA does not have a verified final EPA value for a
manufacturer, NHTSA proposes to set the manufacturer's alternative
standard at the level submitted by manufacturers in their non-final
fuel economy reports to the agencies. NHTSA believes that all
manufacturers covered by this proposed decision submitted information
sufficient for the agency to conclude that their achieved fuel economy
levels for past model years were the maximum feasible fuel economy
levels that they could have achieved for those model years.
    For MYs 2019-2023, the proposed alternative standards take into
consideration both CBI and non-CBI information submitted to the agency,
including the manufacturer's requested alternative standard and
predicted achieved fleet fuel economy value (if that value differed
from the requested alternative standard). In addition, the alternative
standards proposed today reflect NHTSA's belief that even though the
manufacturers considered in this notice may have less capability to
improve their fleet fuel economy than full-line manufacturers for the
reasons listed above, manufacturers should aim to at least hold their
fleet fuel economy constant, if not improve it year over year. Congress
granted NHTSA the ability to provide an exemption to low volume
manufacturers in part because it believed that the need of the nation
would not be adversely affected by allowing the limited exemption; \86\
however, as discussed further in the draft environmental assessment
below, transportation fuel consumption is expected to remain a major
source of U.S. energy use through at least mid-decade. NHTSA believes
that the proposed fuel economy levels presented below appropriately
balance the CAFE exemption program with EPCA's directive to conserve
energy, and that standards that do not backslide year over year for
imminently future model years are therefore maximum feasible for the
manufacturers petitioning the agency for alternative standards.
---------------------------------------------------------------------------

    \86\ See, e.g., 44 FR at 3711 (Jan. 18, 1979) (``The agency
believes that the language in section 502(c) specifying that this
agency may exempt low volume manufacturers indicates that Congress
intended this agency to apply a test of whether granting an
exemption would be generally consistent with the purposes of the
Act. The main purpose of the Act is conserving energy.'').
---------------------------------------------------------------------------

    Considering the unique circumstances of this proposed decision, we
also note that in accordance with 49 CFR 525.11--Termination of
exemption; amendment of alternative average fuel economy standard, the
agency may also initiate another rulemaking either on its own motion or
on petition by an interested person to terminate an exemption granted
under this part or to amend an alternative average fuel economy
standard. While that may seem premature to mention at this point, as
the agency has not yet issued final standards, NHTSA must set standards
for a petitioning low volume manufacturer at the maximum feasible
level. If additional data indicate that a manufacturer's achieved CAFE
level differs significantly from the levels proposed in this notice or
finalized, NHTSA will consider all options available to the agency to
ensure that each manufacturer's alternative standard is the maximum
feasible standard that the manufacturer can achieve. In addition, as
discussed above, NHTSA will consider any additional information
submitted by commenters, manufacturers (if additional information is
available), or EPA (if additional final fuel economy data becomes
available) that is submitted during the pendency of the comment period
associated with this notice.
    Accordingly, NHTSA believes that the proposed alternative standards
presented below are maximum feasible for these manufacturers for these
model years, consistent with the purpose of EPCA/EISA.

                                                Table 4--Proposed Alternative Standards for MYs 2008-2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Mobility
                                           Aston Martin       Ferrari       Koenigsegg        McLaren        Ventures         Pagani          Spyker
--------------------------------------------------------------------------------------------------------------------------------------------------------
2008....................................            19.0  ..............  ..............  ..............  ..............  ..............            19.6
2009....................................            18.6  ..............  ..............  ..............  ..............  ..............            19.6
2010....................................            19.2  ..............  ..............  ..............  ..............  ..............            20.7
2011....................................            19.1  ..............  ..............  ..............  ..............  ..............  ..............
2012....................................            19.2  ..............  ..............            23.2  ..............  ..............  ..............
2013....................................            20.1  ..............  ..............            24.0  ..............  ..............  ..............
2014....................................            19.7  ..............  ..............            23.8            19.6            15.6  ..............
2015....................................            19.8  ..............            16.7            22.9            20.1  ..............  ..............
2016....................................            20.2            21.7  ..............            23.2            20.1            15.6  ..............
2017....................................            21.4            21.5  ..............            24.3  ..............            15.6  ..............
2018....................................            22.9            21.6            16.7            23.3  ..............            15.6  ..............
2019....................................            22.4  ..............            16.6            22.5  ..............            15.5  ..............
2020....................................            22.6            21.1            16.6            22.5  ..............            15.5  ..............
2021....................................            24.9  ..............            16.6            21.5  ..............            15.5  ..............
2022....................................            24.9  ..............            16.9            24.6  ..............            15.5  ..............
2023....................................            24.9  ..............            16.9            25.7  ..............            15.5  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    These alternative standards are being proposed only for Aston
Martin Lagonda Limited for MYs 2008-2023, Ferrari N.V. for MYs 2016-
2018 and MY 2020, Koenigsegg Automotive AB for MYs 2015 and 2018-2023,
McLaren Automotive for MYs 2012-2023, Mobility Ventures LLC for MYs
2014-2016, Pagani Automobili S.p.A for MYs

2014 and 2016-2023, and Spyker Automobielen B.V. for MYs 2008-2010, and
not for low volume manufacturers generally or for a class of
automobiles of exempted manufacturers.
    NHTSA is also proposing to correct the reference to alternative
fuel economy standards in 49 CFR 531.5(a), as paragraph (f) does not
exist.
    NHTSA seeks comment on the analysis that led to this proposed
decision.

4. Regulatory Impact Analyses

a. Regulatory Evaluation

    NHTSA has considered the potential impacts of this action under
Executive Order (E.O.) 12866 and the Department of Transportation's
regulatory policies and procedures and has concluded that those orders
do not apply, because this action is not an agency statement of general
applicability and future affect. This decision is not generally
applicable, because the agency has proposed to set alternative average
fuel economy standards for each individual manufacturer.

b. Regulatory Flexibility Determination

    Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act
(SBREFA) of 1996), whenever an agency is required to publish a notice
of proposed rulemaking, it must prepare and make available for public
comment a regulatory flexibility analysis that describes the effect of
the rule on small entities (i.e., small businesses, small
organizations, and small governmental jurisdictions) unless the head of
an agency certifies the proposal will not have a significant economic
impact on a substantial number of small entities. The Small Business
Administration's regulations at 13 CFR part 121 define a small
business, in part, as a business entity ``which operates primarily
within the United States.'' (13 CFR 121.105(a)). SBREFA amended the
Regulatory Flexibility Act to require Federal agencies to provide a
statement of the factual basis for certifying that a proposal will not
have a significant economic impact on a substantial number of small
entities.
    I certify this proposed decision would not have a significant
impact on a substantial number of small entities. This proposed
decision exempts low volume manufacturers from the generally applicable
passenger car CAFE standards and proposes to set alternative standards
for those low volume manufacturers at maximum feasible levels.

c. National Environmental Policy Act

    The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C.
4321-4347) requires Federal agencies consider the environmental impacts
of proposed major Federal actions significantly affecting the quality
of the human environment, as well as the impacts of alternatives to the
proposed action.\87\ The Council on Environmental Quality (CEQ) NEPA
implementing regulations (40 CFR parts 1500-1508) direct Federal
agencies to prepare an environmental assessment for a proposed action
that is not likely to have significant effects or when the significance
of the effects is unknown.\88\ The environmental assessment must
``briefly discuss the purpose and need for the proposed action,
alternatives[], and the environmental impacts of the proposed action
and alternatives, and include a listing of agencies and persons
consulted.'' \89\ This section serves as the National Highway Traffic
Safety Administration's (NHTSA) Draft Environmental Assessment (Draft
EA). NHTSA invites public comments on the contents and tentative
conclusions of this Draft EA.
---------------------------------------------------------------------------

    \87\ 42 U.S.C. 4332(2)(C).
    \88\ 40 CFR 1501.5(a).
    \89\ 40 CFR 1501.5(c)(2).
---------------------------------------------------------------------------

1. Purpose and Need for Action
    In accordance with the Energy Policy and Conservation Act (EPCA) of
1975, as amended by the Energy Independence and Security Act (EISA) of
2007, and the procedures at 49 CFR part 525, the purpose of this
proposal is to set alternative corporate average fuel economy (CAFE)
standards for low volume manufacturers that have petitioned the agency
for an alternative standard at the maximum feasible fuel economy level
that NHTSA believes each manufacturer can achieve in each model year.
While the purpose of setting industry-wide fuel economy standards under
EPCA/EISA is, among other things, energy conservation, Congress granted
NHTSA the ability to provide an exemption to low volume manufacturers
in part because it believed that the need of the United States to
conserve energy would not be adversely affected by allowing the limited
exemption.\90\ If NHTSA did not grant alternative standards for low
volume manufacturers, they would have to meet the industry-wide
passenger car standard in each applicable model year, which, in most if
not all cases, is more stringent than the maximum feasible fuel economy
level that NHTSA believes these low volume manufacturers can achieve.
---------------------------------------------------------------------------

    \90\ See, e.g., 44 FR at 3711 (Jan. 18, 1979).
---------------------------------------------------------------------------

    When determining the maximum feasible fuel economy levels that
manufacturers can achieve in each model year, EPCA/EISA requires that
NHTSA consider four factors: technological feasibility, economic
practicability, the effect of other motor vehicle standards of the
government on fuel economy, and the need of the United States to
conserve energy. NHTSA relies on information in each low volume
manufacturer's petition for exemption, which are discussed in more
detail in the preamble above, to propose alternative average fuel
economy standards at the maximum feasible level for each manufacturer.
However, the unique nature of this action requires NHTSA to set maximum
feasible standards for model years that have already passed. NHTSA's
proposed action and range of alternatives considered below reflects
these statutory and practical considerations.
2. Proposed Action and Alternatives
    For this action NHTSA has considered a No Action Alternative and
two alternatives. The No Action Alternative assumes that in the absence
of NHTSA action on their petitions, manufacturers would meet their
footprint-based CAFE standard for MYs 2013-2023.\91\ One action
alternative proposes to set alternative standards at the levels that
the manufacturers requested for model years that NHTSA does not have
final fuel economy data (the ``as-requested'' alternative); and the
preferred alternative proposes to set standards at the levels detailed
in the preamble above. NHTSA did not consider an alternative that
proposed to set an alternative standard for a model year at a lower
level than the manufacturer achieved in past model years (i.e., in some
cases for past model years what the manufacturer requested) because
that would not have been the maximum feasible fuel economy level that
the manufacturer could have achieved.
---------------------------------------------------------------------------

    \91\ As discussed above, NHTSA has expired MY 2012 and earlier
fuel economy credits in accordance with 49 CFR 536.5(c)(2), meaning
that low volume manufacturers that built vehicles in MYs 2008-2012
cannot now buy fuel economy credits from manufacturers that exceeded
their CAFE standard in those years to offset the CAFE values of the
low volume vehicles produced in those years. As a simplifying
assumption, because there can be no difference between the fuel used
in MYs 2008-2012 under the No Action Alternative baseline and action
scenarios, fuel use in those years was not considered.

---------------------------------------------------------------------------

3. Affected Environment
    Broadly, NHTSA actions regulating motor vehicle fuel economy could
have a range of environmental impacts, including to energy use, air
quality, climate change, resource extraction and use, and to
environmental justice communities, among others. Every time NHTSA sets
industry-wide CAFE standards, the agency examines the environmental
impact of the proposed standards and a range of alternatives on these
resources in an environmental impact statement (EIS). The EIS uses
estimates of fuel consumption that would result if the agency adopted
different levels of fuel economy standards to quantitatively estimate
the impacts to energy use, air quality, and greenhouse gas emissions
and climate change. NHTSA also qualitatively discusses the lesser
impacts to other resource areas, including land use and development,
hazardous materials and regulated waste, historical and cultural
resources, noise, and environmental justice. NHTSA's recent Final
Supplemental Environmental Impact Statement (Final SEIS) for the notice
of proposed rulemaking (NPRM) for MY 2024-2026 passenger car and light
truck fuel economy standards (hereinafter ``Final SEIS'') provides the
most up-to-date estimates of the impact of different levels of fuel
economy standards on these resource areas and discussion of the
environmental impacts. The Final SEIS discussions of environmental
impacts resulting from changes in fuel use from motor vehicles is
incorporated by reference here,\92\ as discussed further below.
---------------------------------------------------------------------------

    \92\ 40 CFR 1501.12.
---------------------------------------------------------------------------

    Transportation fuel accounts for a large portion of total U.S.
energy consumption and energy imports and has a significant impact on
the functioning of the energy sector as a whole. Although U.S. energy
efficiency has been increasing and the U.S. share of global energy
consumption has been declining in recent decades, total U.S. energy
consumption has been increasing over that same period. Until a decade
ago, most of this increase came not from increased domestic energy
production but from the increase in imports, largely for use in the
transportation sector. U.S. net petroleum imports are expected to
result primarily from fuel consumption by light-duty and heavy-duty
vehicles, with the transportation sector expected to account for 76.9
percent of total U.S. petroleum consumption by 2050. This means that
the transportation sector will continue to be the largest consumer of
U.S. petroleum and the second-largest consumer of total U.S. energy,
after the industrial sector. Please refer to Chapter 3 of the Final
SEIS (Energy) for a comprehensive discussion of transportation sector
energy impacts, including discussions of how the passenger car and
light truck vehicle sector affects overall energy use in the United
States and how improvements in the fuel economy of vehicles and
increasing energy production together affect U.S. energy security by
reducing the overall U.S. trade deficit and the macroeconomic
vulnerability of the United States to foreign oil supply disruptions.
    Next, several human activities related to motor vehicles cause
gases and particles to be emitted into the atmosphere, including
driving cars and trucks; extracting, refining, and transporting crude
oil; burning coal, natural gas, and other fossil fuels; and
manufacturing chemicals and other products from raw materials as well
as other industrial and agricultural operations. Emissions of vehicle-
related sources of air pollutants, including criteria pollutants and
mobile source air toxics (MSATs), from both upstream fuel extraction
processes and vehicle tailpipes impact air quality.\93\ In addition to
causing adverse environmental impacts, air pollution from upstream and
downstream sources causes emissions-related health conditions like
increased asthma incidences, work-loss days, and even premature
mortality.
---------------------------------------------------------------------------

    \93\ In the motor vehicle context, emissions from fuel
extraction, refining, and transportation are generally referred to