clicking a button within the template. In the 2020 final rule, NHTSA
established that manufacturers are required to use the projections
template for all PMY, MMY, and supplementary CAFE reports starting in
MY 2023. NHTSA made both the credit transactions and projections
templates available for download through the NHTSA PIC website and DOT
docket for interested parties to evaluate prior to their mandatory
dates.
    In the 2020 final rule, NHTSA also adopted provisions for
manufacturers to report confidential information on the cost of credit
trades and all the supporting trade documents. The agency established
that manufacturers were to report this information starting January 1,
2021. NHTSA intended for the information to be used to establish the
true cost of compliance for all manufacturers which will be used by
agency decisions makers in developing new rulemakings. Additionally, as
a long-term goal, NHTSA hoped to use the information as a part of new
reports to be release to the public.
    Since then, manufacturers have downloaded the templates and met
with NHTSA to share recommendations for changes, such as allowing the
PMY and MMY reporting templates to accommodate different types of
alternative fueled vehicles and to clarify and correct the methods for
calculating CAFE values. As a part of the 2021 NPRM,\1169\ NHTSA
released several draft changes to the previous templates and added a
new template for the monetary and non-monetary costs and terms
associated with CAFE credit trades. The following sections will
describe the comments received to the three templates and the final
changes enacted by this final rule.
---------------------------------------------------------------------------

    \1169\ 86 FR 49602 (Sept. 3, 2021).
---------------------------------------------------------------------------

(2) Changes to the CAFE Projections Reporting Template
    Along with the 2021 NPRM,\1170\ NHTSA released version 2.21 of the
CAFE Projections Reporting Template. Version 2.21 included several
general improvements made to simplify the use and the effectiveness for
manufacturers. The changes included, but were not limited to; wording
changes, corrections to calculations and codes, and auto-populating
fields previously requiring manual entry. With this final rule we will
be releasing version 2.25 of the CAFE Projections Reporting Template,

which addresses and fixes many of the concerns raised in the comments,
below.
---------------------------------------------------------------------------

    \1170\ 86 FR 49602 (Sept. 3, 2021).
---------------------------------------------------------------------------

    More specifically, NHTSA modified the CAFE Reporting Template in
the proposal by adding filters and sorting functions to help
manufacturers connect the data definitions to the location of each of
the required data fields in the template. Additional information from
other parts of the CAFE Reporting Template would be pulled forward to
display on the summary tab. For the information required pursuant to 49
CFR 537.7(b)(2), areas were also included for manufacturers to compare
the values the template calculates to their own internally calculated
CAFE values. Additionally, NHTSA expanded the CAFE Reporting Template
to include more of the required information regarding vehicle
classification, and eased manufacturers reporting burden by having them
report only the data used for each vehicle's qualification pathway
ignoring other possible light truck classification information.
    NHTSA also combined the footprint attribute information and model
type subconfiguration data. NHTSA uses this information to match test
data directly to fuel economy footprint values for the purposes of
modeling fuel economy standards. Features were also added to auto-
populate redundant information from one worksheet to another. The data
gathered and the formulas coded within the worksheets were also updated
to correct fuel economy calculations based on 40 CFR 600.510-12. The
changes allowed the data to more accurately represent the fuel economy
of electric and other vehicles using alternative fuels. NHTSA considers
this information critically important to forming a more complete
picture of the performances of dual fuel and alternative fuel vehicles.
    We also made several corrections so that manufacturers would submit
CAFE data at each of the different levels they test and combine the
stages of CO2 and fuel economy test results. As mentioned,
manufacturers test approximately 90-percent of their vehicles within
each model type. Each subconfiguration variant within a model type may
have a unique CO2 and CAFE value. Manufacturers combine at
the configuration, base level and then finally at the model type level
for determining CAFE performance. NHTSA determined that this level of
data was needed to verify manufacturers reported CAFE values.
    Finally, NHTSA made corrections to the CAFE Reporting Template to
better collect information on off-cycle technologies. The changes
aligned the format of the data with the EPA off-cycle database system.
For example, manufacturers report to EPA high efficiency lighting as
combination packages, so NHTSA changed the template to reflect the same
level of information.
    NHTSA will make version 2.25 of the template available on NHTSA's
PIC site for download concurrent with the final rule being published.
    In response to the 2021 NPRM,\1171\ multiple manufacturers
commented in support of the revised template. Mercedes Benz, Ford,
Hyundai, Stellantis, and Lucid, support the use of a standardized
template for CAFE reporting.\1172\ Ford appreciates NHTSA is aligning
with some of the existing EPA reporting data elements but believes that
additional improvements can be made, particularly regarding the format
of data collected. NHTSA will continue to work with EPA to determine
areas where reporting can be further aligned for future rulemakings.
---------------------------------------------------------------------------

    \1171\ 86 FR 49602 (Sept. 3, 2021).
    \1172\ Mercedes-Benz, NHTSA-2021-0053-0952-A1, at p3; Ford,
NHTSA-2021-0053-1545-A1, at p4; Hyundai, NHTSA-2021-0053-1512-A1, at
page 8.; Stellantis, NHTSA-2021-0053-1527, at page 30; Lucid, NHTSA-
2021-0053-1584, at 6.
---------------------------------------------------------------------------

    Nissan suggested streamlining the template by eliminating
unnecessary details in the template.\1173\ They believe that the amount
of detail requested in the CAFE Reporting Template is extensive and
substantially increases the resources required in the data preparation
process. Mercedes Benz shared a similar view and added that time
periods for preparing PMY and MMY reports could be troublesome since
some of the information requested is not yet available for submission,
and can only be confirmed at the conclusion of the MY.\1174\ Ford
recommends that less detailed data be required for the pre-model year
reports compared to the mid-model year reports. It believes this is
appropriate because higher level planning projections are used in the
pre-model year reports, whereas substantial production data is normally
used for the mid-model year report.\1175\ Auto Innovators requested
that NHTSA align its data requirements more closely with the data that
are available to manufacturers at the time pre- and mid-model year
reports are prepared.\1176\ Auto Innovators stated that the pre-model
year report is largely a projection due for each current model year
during the month of December which makes it not valuable enough for
modeling since attributes like paint colors or lighting packages, that
are currently required information in the proposed reporting template
(for off-cycle technologies) until after the end of the model year when
manufacturers submit their final reports to the EPA.
---------------------------------------------------------------------------

    \1173\ Nissan, NHTSA-2021-0053-0022, at 9.
    \1174\ Mercedes-Benz, NHTSA-2021-0053-0952-A1 at p. 3.
    \1175\ Ford, NHTSA-2021-0053-0952-A1, at p. 4.
    \1176\ Auto Innovators, NHTSA-2021-0053-1492, at page 77.
---------------------------------------------------------------------------

    NHTSA understands manufacturers concerns with the early production
limitations for vehicles and technologies which can prevent
manufacturers from having data available for the PMY and MMY template.
Consequently, NHTSA is changing the requirements for the CAFE
projections template for the final rule; manufacturers will only be
required to provide actual information on vehicles and technologies in
production at the time the PMY and MMY model year reports are required.
Manufacturers should attempt not to omit data, which should only be the
case for products pending production and with unknown information at
the time CAFE reports are prepared.
    Hyundai and Auto Innovators commented that they were concerned that
the agency was going to publish confidential business data in its
public forecast volume reports or to use the data in such a manner that
could be reversed engineered.\1177\ NHTSA has further reduced this
possibility by hiding the ``total credits'' columns in the public
report to prevent any back calculation. The public report will be
generated by pressing the `generate public report' button on the
general info tab and will no longer contain enough information for back
calculations to occur. NHTSA will not publish any PMY/MMY data, or any
data that can be reversed engineered to reveal confidential business
information. Confidential business data will only be used by NHTSA for
internal modeling and analysis.
---------------------------------------------------------------------------

    \1177\ Hyundai, NHTSA-2021-0053-1512-A1, page 8; Auto
Innovators, NHTSA-2021-0053-1492, at page 77.
---------------------------------------------------------------------------

    Mercedes Benz requested that NHTSA eliminate MMY reports to relieve
the burden on manufacturers.\1178\ However, NHTSA is unable to
eliminate the MMY report because these reports are mandated by Congress
in EPCA.\1179\ In addition, there is information contained in the PMY
and MMY reports that is not in the EPA reports such as vehicle
classification information that is critical to NHTSA's compliance
program. The MMY reports also provide a near final estimate of all the
values. Most

manufacturers are close to completing production for the model year
when MMY reports are required.
---------------------------------------------------------------------------

    \1178\ Mercedes-Benz, NHTSA-2021-0053-0952-A1, at p. 3.
    \1179\ 49 U.S.C. 32907(a)(2).
---------------------------------------------------------------------------

    Auto Innovators also requested several technical corrections to the
reporting template to align with industry and EPA testing and data
reporting uses. Summarized in the following paragraphs are those
requests and NHTSA's responses and changes for the final rule.
     Clarification on which fields are mandatory and which are
optional.\1180\ No changes were made to the template for the final rule
in response to this request. Generally, the data fields colored in
white are mandatory. Manufacturers should only consider a white data
field optional if it does not produce vehicles requiring the
information in that area. Manufacturers are responsible for determining
if any vehicles in their fleet fit the requirements of the data field
and must be reported. NHTSA will consider methods to further improve
the template in future rulemakings if further guidance is needed.
---------------------------------------------------------------------------

    \1180\ Auto Innovators, NHTSA-2021-0053-1492, at pp. 77-81.
---------------------------------------------------------------------------

     Asked NHTSA to further harmonize reporting requirements
with EPA. For example, Auto Innovators stated that NHTSA has seven
values for Fuel System and EPA has eleven. Similarly, NHTSA has three
values for Drive System/Mode and EPA has five values. Auto Innovators
recommended that NHTSA modify their template to use EPA values as input
values and if NHTSA needs alternate values for their internal analysis,
then the template could provide that translation. Auto Innovators
request that EPA and NHTSA align their reporting values before
manufacturers have to redesign their information technology systems to
accommodate the new NHTSA template.\1181\ NHTSA agrees with Auto
Innovators' recommendations and has updated the drop-down menus in the
template to reflect those provided by EPA for the final rule.
---------------------------------------------------------------------------

    \1181\ Id.
---------------------------------------------------------------------------

     Eliminate the reporting requirement for Basic Vehicle
Frontal Area that has been replaced with GVWRs.\1182\ The agency
recognizes this legacy reporting field is no longer applicable to the
current fuel economy calculations and thus agrees with Auto Innovators.
For the final rule, NHTSA has removed the field for Basic Vehicle
Frontal Area from the reporting template.
---------------------------------------------------------------------------

    \1182\ Id.
---------------------------------------------------------------------------

     Identified a problem on the summary tab with the rollup
alternative dual fuel equation.\1183\ For the final rule, NHTSA has
fixed this error in the template. Alternative dual fuel will only be
calculated on the summary tab if there is alternative dual fuel
identified in the fleet.
---------------------------------------------------------------------------

    \1183\ Id.
---------------------------------------------------------------------------

     Identified an issue regarding Equivalent Test Weight. It
stated that, in column ``AY'' and field ``ETW,'' it appears as if test
weight is calculated automatically from curb weight.\1184\ NHTSA sees
how base level can cross two ranges for the ETW based upon historic
regulations. For the final rule, NHTSA has developed a user manual for
the template to give guidance on how to handle a situation where two
ranges are covered as well as providing clarifications on other data
uses in the template. As defined in the manual, manufacturers will have
to create two base levels one for each range covered. NHTSA have
conferred with EPA, and they have informed us that this is how they
currently handle this issue with ETW ranges.
---------------------------------------------------------------------------

    \1184\ Id.
---------------------------------------------------------------------------

     Raised concerns about how data were collected at the
subconfiguration level. Auto Innovators is concerned that these data
are being collected on the subconfiguration level that is not aligned
with the EPA definition. The carline class is unique for each model
type and so collecting this data on a subconfiguration level is very
repetitive and inefficient. Auto Innovators believes it would be more
efficient for NHTSA to collect this and other data in a manner better
aligned with the definitions. It recommend that NHTSA update its
template to collect model type level data on the model type
worksheets.\1185\ For the final rule, NHTSA has updated the reporting
template to collect carline class information on the Model Type level
instead of the subconfiguration level.
---------------------------------------------------------------------------

    \1185\ Id.
---------------------------------------------------------------------------

     Requested that NHTSA change the name of cell AM16 in the
Footprint and Subconfig tab from ``Auxiliary Emission Control Devices''
(AECD) to ``Emission Control Devices''. NHTSA agrees that this is a
more appropriate term for this column and has changed the name in the
reporting template for the final rule.
     Commented the Footprint and SubConfig tab in columns ``BU,
BV, BW, BY, BZ, CA, CB, CE, CI'' under the Base and Alternative Fuel
field that when conventional gasoline is selected under base fuel in
column BI and no alternative fuel input is done. It recommends that the
columns should not display any MPGe values when ``conventional
gasoline'' is selected. This column is intended to calculate either the
MPGe or MPG, depending on the input. For alternative fuel calculating
the MPGe involves converting the fuel economy to MPGe, for conventional
gasoline this simply involves multiplying the MPG by one to get MPGe.
The MPGe is then used in calculating the combined fuel economy. NHTSA
disagrees with Auto Innovators suggestions and for the final rule will
keep this column as proposed since it accurately reflects the content
of the data. NHTSA believes the current content of the data is
appropriate and not complicated to understand its usage.
     Questioned why production volumes are user inputted, as
opposed to automatically calculated for the Production Volume fields on
the configuration, base level, and model type worksheet tabs. Explained
that once production volume is entered for each carline on a
subconfiguration level, the values should be carried over wherever
carlines and their corresponding production volumes are present in each
of the higher-level tabs such as configuration, base level, and model
type. For the final rule, NHTSA will not make changes in response to
this request. The spreadsheet is structured in such a way that
automatic calculations would not be possible for these production
volumes.
     Recommended that footprint data be required on the carline
level, which is part of a model type definition, and aligned with the
submission format required by EPA. It explained that the NHTSA template
proposes to combine the footprint attribute information and model type
subconfiguration data for the purposes of matching test data directly
to fuel economy footprint values for modeling fuel economy standards.
Auto Innovators believes that the subconfiguration and footprint data
should not be combined. A subconfiguration can only have a single fuel
economy value and yet may contain multiple footprints/wheelbases
because subconfigurations are largely based on powertrain, weight, and
road load attributes. In 49 CFR part 537, it requires footprint data
for each unique model type and footprint combination and NHTSA has
defined that the base (standard) tire is to be used for footprint data.
However, footprint data on the template are required to be provided on
a subconfiguration level. A manufacturer can have hundreds of
subconfigurations in a single fleet. Auto Innovators contends it is not
efficient nor beneficial to either keep repeating the same footprint
data across a subconfiguration or to further subdivide a
subconfiguration by the multiple

wheelbases in them. It will not help NHTSA to find the applicable
footprint record for a physical vehicle that's been obtained as part of
the footprint validation program to have repeating values in the
template. NHTSA has considered Auto Innovators' concerns and decided
for the final rule not to make any changes to this data collection. The
agency's need to support our data analysis and modeling compels
retaining the format as proposed and repeated values will have no
impact on compliance testing.
     Clarify that NHTSA states each subconfiguration variant
within a model type has a unique CO2 and CAFE value.
Manufacturers combine other vehicles at the configuration, base level
and then finally at the model type level for determining CAFE
performance. Auto Innovators would like to clarify that each
subconfiguration variant may or may not have a unique CO2
and CAFE value as some subconfiguration variants are untested. NHTSA
understands Auto Innovators' concerns and has added to the preamble
text for the final rule that there may or may not be a unique
CO2 and CAFE value represented.
     Clarify what is meant by ``other vehicles'' from different
nameplates may be combined at the subconfiguration, configuration, and
base level because these are defined by attributes like powertrain,
weight, and total road load horsepower but not at the model type level.
A model type is defined by carline and so ``other vehicles'' wouldn't
apply in this context. NHTSA agrees with Auto Innovators' concerns and
for the final rule has removed `model type' from the sentence in the
preamble text.
     Auto Innovators requested several small changes to the
language and rounding in the template. Under the ``Data Definitions''
tab, in row 66, it says, ``Type of Overdrive/Torque converter'', but in
``Footprint & SubConfig'' tab, it is asking for ``Presence of over
drive (Y/N). We respectfully request you change the data definition
description from ``Type'' to ``Presence'' of Overdrive to match Col O
in Footprint & Sub Conf tabs.'' Additionally, in the ``Data
Definitions'' tab, cells F99, F100, F172, and F173, the total drive
ratio min & max descriptions should have only 1 decimal place (##.#) to
match input in Footprint and SubConfig tabs. NHTSA is adopting the
changes requested by Auto Innovators for the final rule, but note that
the information manufacturers will be required to submit will remain
unchanged from the proposal. The changes requested by Auto Innovators
were a combination of style and clarifications to the template.
     Auto Innovators requested changes under the ``Vehicle
Classification'' worksheet tab, under columns ``AC'' and ``AD.'' Per 49
CFR 537.7(c)(4)(xvi)(B)(2), only cargo volume is required to be
reported, thus cargo bed width and length is not required. Auto
Innovators requested that NHTSA remove ``Cargo bed width and length''--
as cargo volume is already requested. Auto Innovators believes this is
an unnecessary extra burden that could result in conflicting data.
However, NHTSA disagrees with Auto Innovators and our regulations
specifically require the length of cargo beds to be reported for
vehicle classification and is also used for verifying full size pickup
trucks for the incentive NHTSA uses in 40 CFR 86.1870-12. Therefore,
NHTSA will not be removing this requirement.
     Auto Innovators contended that the Fuel Economy Base Level
Tab--In column AI, under 40 CFR 600.208-12(a)(4) and (5), the Combined
(CMB) formula is incorrect and suggested that NHTSA use a harmonic
average for the CMB formula. The current 55:45 ratio is used only for
vehicle configuration calculation. Additionally, it prefers a direct
user input, rather than automatic calculation. Additionally, Auto
Innovators believes that the automatic calculation is not necessary. It
requests that ``direct input'' is used, rather than an automatic
calculation for the CMB. Because 45/55 is only found in the calculation
for configuration level, when calculating at the base level you need to
roll up the configuration level calculation. For the final rule, NHTSA
will retain the proposed CMB formulas. The method used in the template
was confirmed with the approach used by EPA for determining CAFE
values.
     Requested additional columns be added to the Air
Conditioning Efficiency tab to allow for additional approved
technologies. In the Air Conditioning Efficiency tab, under column AC
for the Advanced Technology Compressor, it requests that NHTSA allow
additional input columns for both existing and approved technologies.
This is to ensure that future technologies are accounted for as they
come to market and are applicable under the credit program. NHTSA
understands that these additional columns may be needed in a future
version when additional technologies are approved. Therefore, for the
final rule, NHTSA has added several additional columns to the template
and will continue to add additional columns as needed. This template
will continue to undergo other changes as needed by NHTSA and
manufacturers, in the future, to accommodate, changes in technologies,
vehicles and programmatic requirements.
    Finally, Ford and Auto Innovators requested that NHTSA update part
537 to allow submission of confidential reporting of the template by
email rather than requiring submissions on CD-ROM.\1186\ NHTSA agrees
that submission sent by email are effective and resolves problems with
delayed or lost CAFE reports. Therefore, for the final rule, NHTSA has
updated its provisions in part 537 to accommodate electronic reporting.
---------------------------------------------------------------------------

    \1186\ Ford, NHTSA-2021-0053-0952-A1, at p. 4; Auto Innovators,
pp. 77-81.
---------------------------------------------------------------------------

(3) Credit Transactions Reporting Template
    NHTSA released a new version of its CAFE credit transactions
template, fixing several calculation errors as a part of the 2021
NPRM,\1187\ and released the template for download on the NHTSA PIC. In
the previous 2020 final rule, NHTSA had established using the credit
template as the sole source for executing CAFE credit transactions
starting January 1, 2022. However, as a result of these errors the
effective date for the Credit Transaction Reporting Template will now
be September 1, 2022.
---------------------------------------------------------------------------

    \1187\ 86 FR 49602 (Sept. 3, 2021).
---------------------------------------------------------------------------

    In response to the NPRM, Stellantis commented that it supports the
proposed transaction template and finds the joint trade instruction
document it generates helpful.\1188\ Although in its views, Stellantis
believes the current template is unworkable because it requires a
manufacturer to share the planned use of credits which may not be known
with precision. Stellantis stated that the transaction types are not
defined in the data definitions, nor in 49 CFR 536.8 as referenced.
NHTSA has updated the user guide with the data definitions for the
final rule.
---------------------------------------------------------------------------

    \1188\ Stellantis, NHTSA-2021-0053-1527, at p. 30.
---------------------------------------------------------------------------

    A comment received from Auto Innovators also identified an error
message that ASTM Rounding Module is not supported in older versions of
Excel.\1189\ Due to the functions of VBA coding used in the templates,
NHTSA cannot create a template that works with all older versions of
Excel. As for those manufacturers who experienced an ASTM Rounding
Module error, NHTSA recommends these manufacturers should update to a
newer version of Microsoft Excel that will work with VBA coding. NHTSA
notes that this should not impose any additional cost or burden on
manufacturers because

those with access to Microsoft Excel are offered upgrades to versions
with VBA at no additional cost.\1190\
---------------------------------------------------------------------------

    \1189\ Auto Innovators, NHTSA-2021-0053-1492, at p. 82.
    \1190\ For assistance with updating Excel, please reach out to
Microsoft support.
---------------------------------------------------------------------------

    In addition, NHTSA is changing in this final rule the effective
date for its credit transactions template from January 1, 2022, to
September 1, 2022. This date provides manufacturers additional
implementation time and coordinates the implementation start date of
the credit template.
(4) Monetary and Non-Monetary Credit Trade Information
    Credit trading became permissible starting with MY 2011.\1191\ As
discussed earlier, NHTSA maintains an online CAFE database with
manufacturer and fleetwide compliance information that includes year-
by-year accounting of credit balances for each credit holder. While
NHTSA maintains this database, the agency's regulations currently state
that it will not publish information on individual transactions, and
NHTSA has not previously required trading entities to submit
information regarding the compensation (whether financial, or other
terms of value) exchanged for credits.1192 1193
---------------------------------------------------------------------------

    \1191\ 49 CFR 536.6(c).
    \1192\ 49 CFR 536.5(e)(1).
    \1193\ NHTSA understands that not all credits are exchanged for
monetary compensation. The proposal that NHTSA is adopting in this
final rule requires entities to report compensation exchanged for
credits and is not limited to reporting monetary compensation.
---------------------------------------------------------------------------

    In 2020 final rulemaking, NHTSA adopted requirements in 49 CFR
536.5(c)(5) to submit all credit trade contracts, including cost and
transactional information, to the agency starting January 2021. NHTSA
also adopted requirements allowing manufacturers to submit the
information confidentially, in accordance with 49 CFR part 512.\1194\
In the NPRM, we proposed adding a credit reporting template for
monetary and non-monetary credit terms.
---------------------------------------------------------------------------

    \1194\ See also 49 U.S.C. 32910(c).
---------------------------------------------------------------------------

    Manufacturers continued to argue that disclosing trading terms may
not be as simple as a spot purchase at a given price. As stated in the
2020 final rule, manufacturers contended a number of transactions for
both CAFE and CO2 credits involve a range of complexities
due to numerous factors that are reflective of the marketplace, such as
the volume of credits, compliance category, credit expiration date, a
seller's compliance strategy, and even the CAFE penalty rate in effect
at that time. In addition, automakers have a range of partnerships and
cooperative agreements with their own competitors. Credit transactions
can be an offshoot of these broader relationships, and difficult to
price separately and independently.
    In an effort to assist manufacturers with understanding and
complying with the requirements promulgated in the 2020 final rule,
NHTSA identified a series of non-monetary factors that it believed to
be important to the costs associated with credit trading in the CAFE
program that manufacturers should be reporting.\1195\ NHTSA developed
and proposed a new CAFE Credit Value Reporting Template (Form 1621) for
capturing the monetary and non-monetary terms of credit trading
contracts. NHTSA proposed that manufacturers start using the new
template starting September 1, 2022. The draft template was made
available for download from the NHTSA PIC site.
---------------------------------------------------------------------------

    \1195\ UCS, Detailed Comments, NHTSA-2018-0067-12039; Jason
Schwartz, Detailed Comments, NHTSA-2018-0067-12162.
---------------------------------------------------------------------------

    Mercedes Benz, Stellantis, and Auto Innovators opposed reporting
monetary and non-monetary terms associated with credit trades for
various reason.\1196\ Volvo strongly supported more transparency so
that buyers and sellers can achieve fair and reasonable deals.\1197\
Mercedes,\1198\ requested that NHTSA refrain from making its value
template mandatory for submitting credit transactions. Mercedes
commented that in the event such information is ever released to the
public, it would have a deleterious effect upon OEMs. It stated that
credit transactions arise from compliance strategies for manufacturers,
which typically occur over multi-MY time frames. In the event such
information was ever released to the public, Mercedes argued it would
have a harmful effect on those OEMs whose strategy is released, in
particular those OEMs who are dependent on credits in order to achieve
compliance. Additionally, Mercedes believes releasing this information
to the public may have an unintended, detrimental consequence to the
future credit market, putting OEMs who use credits as part of their
compliance strategy at a competitive disadvantage. Other opposing views
from manufacturers also centered around the unintended consequences
that might occur if confidential credit information were to be publicly
shared. Both Stellantis \1199\ and Auto Innovators \1200\ opposed
greater public transparency for these reasons. Stellantis stated that
the release of public information would likely require manufacturers to
disclose details from confidential negotiations and agreements, likely
covered by non-disclosure agreements (NDAs). Auto Innovators raised
similar concerns contending that confidentiality concerns exists
whether NHTSA intends to disclose the data to the public. It stated
that requiring highly sensitive confidential information is simply not
necessary, and the risks of a breach in confidentiality outweighs what
little value NHTSA may derive from such data. Stellantis offered a
counterproposal for NHTSA to provide additional public credit trading
information aligned with the EPA GHG program (i.e., credit vintage,
credit amounts transferred, and fleet category).
---------------------------------------------------------------------------

    \1196\ Mercedes-Benz, NHTSA-2021-0053-0952-A1, at p. 4;
Stellantis, NHTSA-2021-0053-1527, at p. 29; Auto Innovators, NHTSA-
2021-0053-1492, at pp. 72-77.
    \1197\ Volvo, NHTSA-2021-0053-1565, at p. 4.
    \1198\ Mercedes-Benz, at p. 4.
    \1199\ Stellantis, NHTSA-2021-0053-1527, at p. 29; Auto
Innovators, NHTSA-2021-0053-1492, at pp. 72-77.
    \1200\ Mercedes Benz, at p. 4.
---------------------------------------------------------------------------

    Other comments offered by Stellantis and Auto Innovators focused on
the lack of necessity or relevance for the information required by the
credit value template.\1201\ Stellantis commented that providing the
true value of a credit trade is unknown when credits are banked because
the adjustment factor for preserving ``equivalent gallons'' is applied
only at the time a credit is used to resolve a future shortfall.\1202\
They argued that only the cost per credit from the credit user's
perspective would help NHTSA understand how market pricing compares to
the civil penalty price ceiling. They argued that the delayed
understanding of value, coupled with the additional reporting burden
has questionable public benefit, and could violate the terms of NDAs.
Auto Innovators stated that the credit value template fails to achieve
its intended objectives, is unnecessary to the administration of the
CAFE program, and is overly burdensome to manufacturers.\1203\ Auto
Innovators argued that non-monetary considerations are likely not
straightforward or clear, requiring significant research and numerous
meetings with coworkers to derive an equivalent monetary value.
Further, it believes the requirements exceed NHTSA's statutory
authority. Auto Innovators contended that NHTSA has authority to
require reports necessary

for it to carry out the CAFE, but the required template exceeds what is
necessary to carry out the CAFE program. Auto Innovators also contended
that for the purposes of future rulemaking, in determining maximum
feasible standards, NHTSA is prohibited from considering the trading,
transferring, or availability of credits.\1204\ Therefore, data in the
Credit Value Reporting Template is not informative to the standard-
setting process. It further explained that requiring non-standardized
data and unquantifiable contractual terms is clearly unnecessary for
the determination of manufacturer compliance with the CAFE program, and
their use in rulemaking is limited at best with other, better options,
such as estimates, sensitivity analyses based on the CAFE civil penalty
rate, or comparisons of model runs with manufacturers separated and
aggregated, available.
---------------------------------------------------------------------------

    \1201\ Stellantis, NHTSA-2021-0053-1527, at p. 29.
    \1202\ The adjustment factor is defined in 49 CFR 536.4(c).
    \1203\ Auto Innovators, NHTSA-2021-0053-1492, at pp. 72-77.
    \1204\ Id.
---------------------------------------------------------------------------

    Auto Innovators stated that despite NHTSA's views, manufacturers
have no need to make the cost of credit trade information publicly
available to facilitate credit trading.\1205\ Automobile manufacturers
wishing to engage in credit trading generally negotiate terms through
direct contact. Auto Innovators stated that there is no mystery or
confusion to be resolved through government intervention. Stellantis
supports Auto Innovators' position and reiterated that NHTSA already
knows the price ceiling is the CAFE civil penalties logically as no
manufacturer would pay more for credits.
---------------------------------------------------------------------------

    \1205\ Id.
---------------------------------------------------------------------------

    Additional comments from Auto Innovators were also received on the
adequacy of the credit value template for the public and for NHTSA and
on its burden to manufacturers.\1206\ First, Auto Innovators believes
the template would have little practical (or even academic) value to
the public given that credit transactions likely have a wide range of
values depending on market forces (relative supply and demand) at the
time a trade is made and regulatory compliance considerations
applicable to the specific traded credits, which can vary based on
credit vintage, source, and anticipated future use of the credit for
the purchasing party. Second, it believes that the template would not
be helpful to NHTSA because non-monetary valuations are nearly
impossible to quantify and use as a meaningful point of comparison
underestimates the complicated commercial and manufacturing
relationships manufacturers may have with other companies. There is no
possible ``template'' that can adequately cover the entire range of
possible monetary and non-monetary exchanges between manufacturers.
Trying to categorize complex contracts, business relationships,
production arrangements, and exchanges of technology into simple topics
such as ``chassis technology'' or ``off-cycle technology'' is simply
not possible and provides virtually no value to the administration of
the CAFE program. This is especially true when credits may be generated
by new market entrants, and value may be in the form of options, equity
interest, royalties, real estate, or other assets.
---------------------------------------------------------------------------

    \1206\ Id.
---------------------------------------------------------------------------

    Auto Innovators closed its arguments stating that NHTSA's concerns
for greater oversight are not served by the data requirements of the
Credit Value Reporting Template.\1207\ NHTSA cited protection against
fraud, manipulation, market power, and abuse. Auto Innovators believes
NHTSA's views seem to be more hypothetical than real, and more
importantly, that NHTSA fails to describe how the desired information
will aid in preventing or addressing its intended goals.
---------------------------------------------------------------------------

    \1207\ Id.
---------------------------------------------------------------------------

    Volvo stated the credit value template provides more transparency
so that buyers and sellers can achieve fair and reasonable deals
especially considering the changing landscape of future regulations
leading to greater electrification in the market.\1208\ Volvo believes
adopting electrification in the vehicle fleet will impact the current
trading market where technology exchange as part of a trade will be
less likely to occur and therefore, the price of a credit in a trade
will be more accurately reflected. Volvo also commented that one reason
why some automobile manufacturers suggest that the proposed reporting
associated with the credit value template under the NPRM is unnecessary
is that the current trading market has been ``functioning properly''
but also in a now dated marketplace consisting primarily of traditional
internal combustion engine regulations. Once the regulations are
modified for electric vehicles the balance between monetary and non-
monetary trades may change. Therefore, Volvo Cars supports NHTSA's
proposal to require use of the NHTSA ``Credit Value Reporting
Template'' (Form 1621) when a credit trade is executed is to help
ensure that the future electrified trading market also functions
properly.
---------------------------------------------------------------------------

    \1208\ Volvo, NHTSA-2021-0053-1565, at p. 4.
---------------------------------------------------------------------------

    NHTSA has reviewed the comments received and offers several
clarifications and responses. In regard to concerns about non-
disclosure agreements (NDAs), NDAs are not intended to be legal
mechanisms to circumvent duly promulgated laws and regulations. NHTSA
notes that many NDAs contain language exempting disclosures required by
law to avoid creating an unenforceable promise. NHTSA has faith that
manufacturers will be able to draft NDAs in a manner consistent with
our regulations. We also note that existing NDAs should not be impacted
by this change; 49 CFR 536.8(d) precludes manufacturers from entering
into agreements for credits not currently possessed--we call this a
restriction on forward sales--hence manufacturers cannot have already
entered into long-term sales and NDA agreements for future credits.
    Manufacturers are also concerned the information in the templates,
if released to the public or other manufacturers, could cause potential
harm to multi-year compliance strategies by adversely placing certain
companies at a competitive disadvantage. As stated in the 2020 final
rule, NHTSA will attempt to limit the disclosure of confidential
information--including aggregating data wherever possible--which
manufacturers identified as harmful in their comments, and will attempt
to work with manufacturers before publishing potentially sensitive
information. The agency also notes that much of the data necessary to
discern which manufacturers are buying and selling credits is already
public domain, as credit balances and fuel economy data can be used to
reverse engineer manufacturers credit transactions. However, NHTSA
remains sensitive to manufacturers confidentiality concerns. In fact,
49 CFR 536.5(e)(1) also already includes requirements which precludes
NHTSA from publicly disclosing individual transactions and responding
to individual requests for updated balances from any party other than
the account holder. Consequently, NHTSA would likely find no reason to
disclose the costing information involved in a manufacturer's
individual credit transaction.
    As for manufacturers' contentions questioning the relevance or
necessity for NHTSA receiving information on the value of credit
trades, there is a fundamental misunderstanding of what the agency was
proposing in this rulemaking. We were not proposing that manufacturers
submit additional information. The templates were intended to clarify
and streamline the information that manufacturers are already required
to submit pursuant to 49 CFR 536.5. We believe that

templates--like the draft templates--can assist both manufacturers and
the agency with identifying the key that need to be reported. Some
manufacturers seemed to be under the impression that the templates
would require credit trade disclosures and raised their concern that
NHTSA might misuse the information from its Credit Value template for
the purposes of influencing the maximum feasible standards for future
CAFE rulemaking. We note that these comments were outside the scope of
the rulemaking as manufacturers are already required to provide that
information. Furthermore, collecting these data from manufacturers does
not cause a material harm to manufacturers as the data do not impose
stricter fuel economy standards. If commenters feel that we have used
the data inappropriately in future rulemakings, they should comment to
that effect.
    As mentioned previously, it is NHTSA mission to oversee the CAFE
program and understand all the aspects involving how manufacturers
comply. We view this as including the true value of banked credits
applied to future credit shortfalls and the non-monetary terms
associated with credit trades. Manufacturers labeled this information
as burdensome and unnecessary to administer the CAFE program. NHTSA
disagrees and it is for these types of unknown factors NHTSA now seeks
to acquire the information in its new template. As NHTSA stated, these
factors must be known to fully understand the true cost of compliance.
Furthermore, NHTSA plans to release additional templates in the future
to collect supplemental costing information on technologies used for
complying with its off-cycle program to improve its derived costs for
generating earned credits. NHTSA will attempt to discuss these plans
with manufacturers prior to the next CAFE rulemaking.
    NHTSA agrees with manufacturers that non-monetary valuations will
be difficult to quantify and that future changes may be needed to
refine the template. For these reasons, NHTSA will delay requiring the
new templates until a later date. However, we strongly encourage
manufacturers to use the new revised draft templates. If the agency
finds the new templates as satisfactory, we may be able to more
narrowly tailor the reporting requirements of 49 CFR 536.5 to include
only the information requested in the template.
3. What compliance flexibilities and incentives are currently available
under the CAFE program and how do manufacturers use them?
    Generating, trading, transferring, and applying CAFE credits is
governed by statute.\1209\ Program credits are generated when a vehicle
manufacturer's fleet over-complies with its standard for a given model
year, meaning its vehicle fleet achieved a higher corporate average
fuel economy value than the amount required by the CAFE program for
that fleet in that model year. Conversely, if the fleet average CAFE
level does not meet the standard, the fleet incurs debits (also
referred to as a shortfall or deficit). A manufacturer whose fleet
generates a credit shortfall in a given model year can resolve its
shortfall using any one or combination of several credit flexibilities,
including credit carryback, credit carry-forward, credit transfers, and
credit trades, and if all credit flexibilities have been exhausted,
then the manufacturer must resolve its shortfall by making civil
penalty payments.\1210\
---------------------------------------------------------------------------

    \1209\ 49 U.S.C. 32903.
    \1210\ Manufacturers may elect to pay civil penalties rather
than utilizing credit flexibilities at their discretion. For
purposes of the analysis, we assume that manufacturers will only pay
penalties when all flexibilities have been exhausted.
---------------------------------------------------------------------------

    NHTSA has also promulgated compliance flexibilities and incentives
consistent with EPCA's provisions regarding calculation of fuel economy
levels for individual vehicles and for fleets.\1211\ These compliance
flexibilities and incentives, which were first adopted in the 2012 rule
for MYs 2017 and later, include AC efficiency improvement and off-cycle
adjustments, and adjustments for advanced technologies in full-size
pickup trucks, including adjustments for mild and strong hybrid
electric full-size pickup trucks and performance-based incentives in
full-size pickup trucks. The fuel consumption improvement benefits of
these technologies measured by various testing methods can be used by
manufacturers to increase the CAFE performance of their fleets.
---------------------------------------------------------------------------

    \1211\ 49 U.S.C. 32904.
---------------------------------------------------------------------------

(a) Available Credit Flexibilities
    Under NHTSA regulations, credit holders (including, but not limited
to manufacturers) have credit accounts with NHTSA where they can, hold
credits, and use them to achieve compliance with CAFE standards, by
carrying forward, carrying back, or transferring credits across
compliance categories, subject to several restrictions. Manufacturers
with excess credits in their accounts can also trade credits to other
manufacturers, who may use those credits to resolve a shortfall
currently or in a future model year. A credit may also be cancelled
before its expiration date if the credit holder so chooses. Traded and
transferred credits are subject to an ``adjustment factor'' to ensure
total oil savings are preserved.\1212\
---------------------------------------------------------------------------

    \1212\ See Section VII.B.3.(b) for details.
---------------------------------------------------------------------------

    Credit ``carryback'' means that manufacturers are able to use
recently earned credits to offset a deficit that had accrued in a prior
model year, while credit ``carry-forward'' means that manufacturers can
bank credits and use them towards compliance in future model years.
EPCA, as amended by EISA, allows manufacturers to carryback credits for
up to three model years, and to carry-forward credits for up to five
model years.\1213\ Credits expire the model year after which the
credits may no longer be used to achieve compliance with fuel economy
regulations.\1214\ Manufacturers seeking to use carryback credits must
submit a carryback plan to NHTSA, for NHTSA's review and approval,
demonstrating their ability to earn sufficient credits in future MYs
that can be carried back to resolve the current MY's credit shortfall.
---------------------------------------------------------------------------

    \1213\ 49 U.S.C. 32903(a).
    \1214\ 49 CFR 536.3(b).
---------------------------------------------------------------------------

    Credit ``trading'' refers to the ability of manufacturers or
persons to sell credits to, or purchase credits from, one another while
credit ``transfer'' means the ability to transfer credit between a
manufacturer's compliance fleets to resolve a credit shortfall. EISA
gave NHTSA discretion to establish by regulation a CAFE credit trading
program, to allow credits to be traded between vehicle manufacturers,
now codified at 49 CFR part 536.\1215\ EISA prohibits manufacturers
from using traded credits to meet the minimum domestic passenger car
CAFE standard.\1216\
---------------------------------------------------------------------------

    \1215\ 49 U.S.C. 32903(f).
    \1216\ 49 U.S.C. 32903(f)(2).
---------------------------------------------------------------------------

(b) Fuel Savings Adjustment Factor
    Under NHTSA's credit trading regulations, a fuel savings adjustment
factor is applied when trading occurs between manufacturers and those
credits are used, or when a manufacturer transfers credits between its
compliance fleets and those credits are used, but not when a
manufacturer carries credits forward or backwards within the same
fleet.\1217\
---------------------------------------------------------------------------

    \1217\ See Section VII.A.3.(a) for details about carry forward
and back credits.

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

    NHTSA proposed in the 2021 NPRM to restore certain definitions that
were a part of the adjustment factor equation that had been
inadvertently deleted in the 2020 final rule. The 2020 final rule had
intended to add a sentence to the adjustment factor term in 49 CFR
536.4(c), simply to make clear that the figure should be rounded to
four decimal places. While the 2020 final rule implemented this change,
the amendatory instruction for doing so unintentionally deleted several
other definitions from that paragraph. NHTSA had not intended to modify
or delete those definitions, so NHTSA is now simply adding the language
back into the paragraph for this final rule.
(c) VMT Estimates for Fuel Savings Adjustment Factor
    NHTSA uses VMT estimates as part of its fuel savings adjustment
equation. Including VMT is important, as fuel consumption is directly
related to vehicle use and, in order to ensure trading credits between
fleets preserves oil savings, VMT must be considered.\1218\ For MYs
2017 and later, NHTSA finalized VMT values of 195,264 miles for
passenger car credits, and 225,865 miles for light truck credits.\1219\
---------------------------------------------------------------------------

    \1218\ See 49 CFR 536.4(c).
    \1219\ 77 FR 63130 (Oct. 15, 2012).
---------------------------------------------------------------------------

(d) Fuel Economy Calculations for Dual and Alternative Fueled Vehicles
    As discussed at length in prior rulemakings, EPCA, as amended by
EISA, encouraged manufacturers to build alternative-fueled and dual-
(or flexible-) fueled vehicles by providing special fuel economy
calculations for ``dedicated'' (that is, 100 percent) alternative
fueled vehicles and ``dual-fueled'' (that is, capable of running on
either the alternative fuel or gasoline/diesel) vehicles.
    Dedicated alternative-fuel automobiles include electric, fuel cell,
and compressed natural gas vehicles, among others. The statutory
provisions for dedicated alternative fuel vehicles in 49 U.S.C.
32905(a) state that the fuel economy of any dedicated automobile
manufactured after MY 1992 shall be measured ``based on the fuel
content of the alternative fuel used to operate the automobile. A
gallon of liquid alternative fuel used to operate a dedicated
automobile is deemed to contain 0.15 gallon of fuel.'' There are no
limits or phase-out for this special fuel economy calculation within
the statute.
    EPCA's statutory incentive for dual-fueled vehicles at 49 U.S.C.
32906 and the measurement methodology for dual-fueled vehicles at 49
U.S.C. 32905(b) and (d) expired after MY 2019. In the 2012 final rule,
NHTSA and EPA concluded that it would be inappropriate and contrary to
the intent of EPCA/EISA to measure duel-fueled vehicles' fuel economy
like that of conventional gasoline vehicles with no recognition of
their alternative fuel capability. The agencies determined that for MY
2020 and later vehicles, the general statutory provisions authorizing
EPA to establish testing and calculation procedures provide discretion
to set the CAFE calculation procedures for those vehicles. The
methodology for EPA's approach is outlined in the 2012 final rule for
MYs 2017 and later at 77 FR 63128 (Oct. 15, 2012).
(e) Flexibilities for Air-Conditioning Efficiency, Off-Cycle
Technologies, and Full-Size Pickup Trucks
(1) Incentives for Advanced Technologies in Full-Size Pickup Trucks
    Under its EPCA authority for CAFE and under its CAA authority for
GHGs, in the 2021 Final Rule EPA and NHTSA established FCIVs for
manufacturers that hybridize a significant quantity of their full-size
pickup trucks, or that use other technologies that significantly reduce
fuel consumption by these full-sized pickup trucks. More specifically,
CAFE FCIVs were made available to manufacturers that produce full-size
pickup trucks with Mild HEV or Strong HEV technology, provided the
percentage of production with the technology is greater than specified
percentages.\1220\ In addition, CAFE FCIVs were made available for
manufacturers that produce full-size pickups with other technologies
that enable full-size pickup trucks to exceed their CAFE targets based
on footprints by specified amounts (i.e., electric vehicles and other
electric components).\1221\ These performance-based incentives create a
technology-neutral path (as opposed to the other technology-encouraging
path) to achieve the CAFE FCIVs, which would encourage the development
and application of new technological approaches.
---------------------------------------------------------------------------

    \1220\ 77 FR 62624, 62651 (Oct. 15, 2012).
    \1221\ Id.
---------------------------------------------------------------------------

    Large pickup trucks represent a significant portion of the overall
light duty vehicle fleet and generally have higher levels of fuel
consumption and GHG emissions than most other light duty vehicles.
Improvements in the fuel economy and GHG emissions of these vehicles
can have significant impact on the overall light-duty fleet fuel use
and GHG emissions. NHTSA believes that offering incentives could
encourage the deployment of technologies that can significantly improve
the efficiency of these vehicles and that also will foster production
of those technologies at levels that will help achieve economies of
scale, would promote greater fuel savings overall and make these
technologies more cost effective and available in the future model
years to assist in compliance with CAFE standards.
    EPA and NHTSA also established limits on the eligibility for these
pickup trucks to qualify for incentives. According to the 2012 final
rule a truck was required to meet minimum criteria for bed size and
towing or payload capacities and meet minimum production thresholds (in
terms of a percentage of a manufacturer's full-size pickup truck fleet)
in order to qualify for these incentives. Under the provisions, Mild
HEVs are eligible for a per-vehicle CO2 credit of 10 g/mi
(equivalent to 0.0011 gallon/mile for a gasoline-fueled truck) during
MYs 2017-2021. To be eligible a manufacturer would have to show that
the Mild HEV technology is utilized in a specified portion of its truck
fleet beginning with at least 20 percent of a company's full-size
pickup production in MY 2017 and ramping up to at least 80 percent in
MY 2021. Strong HEV pickup trucks are eligible for a 20 g/mi credit
(0.0023 gallon/mile) during MYs 2017-2021, if the technology is used on
at least 10 percent of a company's full-size pickups in that model
year. EPA and NHTSA also adopted specific definitions for Mild and
Strong HEV pickup trucks, based on energy flow to the high-voltage
battery during testing. In the NPRM, NHTSA proposed extending these
incentives to 2026.
    Furthermore, to incentivize other technologies that can provide
significant reductions in GHG emissions and fuel consumption for full-
size pickup trucks, EPA also adopted a performance-based FCIV for full-
size pickup trucks. Eligible pickup trucks certified as performing 15
percent better than their applicable CO2 target receive a 10
g/mi credit (0.0011 gallon/mile), and those certified as performing 20
percent better than their target receive a 20 g/mi credit (0.0023
gallon/mile). The 10 g/mi performance-based credit was available for
MYs 2017 to 2021 and, once qualifying; a vehicle model would continue
to receive the credit through MY 2021, provided its CO2
emissions level does not increase. To be eligible a manufacturer would
have to show that the technology is

utilized in a specified portion of its truck fleet beginning with at
least 20 percent of a company's full-size pickup production in MY 2017
and ramping up to at least 80 percent in MY 2021. The 20 g/mi
performance-based credit was available for a vehicle model for a
maximum of 5 years within the 2017 to 2021 model year period. In the
2021 NPRM NHTSA proposed extending these incentives through MY 2026,
provided its CO2 emissions level does not increase. To be
eligible, the technology must be applied to at least 10 percent of a
company's full-size pickups in for the model year.
    The agencies designed a definition for full-size pickup truck based
on minimum bed size and hauling capability, as detailed in 40 CFR
86.1866-12(e). This definition ensured that the larger pickup trucks,
which provide significant utility with respect to bed access and
payload and towing capacities, are captured by the definition, while
smaller pickup trucks with more limited capacities are not covered. A
full-size pickup truck is defined as meeting requirements (1) and (2)
below, as well as either requirement (3) or (4) below.
    (1) Bed Width--The vehicle must have an open cargo box with a
minimum width between the wheelhouses of 48 inches. And--
    (2) Bed Length--The length of the open cargo box must be at least
60 inches. And--
    (3) Towing Capability--the gross combined weight rating (GCWR)
minus the gross vehicle weight rating (GVWR) must be at least 5,000
pounds. Or--
    (4) Payload Capability--the GVWR minus the curb weight (as defined
in 40 CFR 86.1803) must be at least 1,700 pounds.
    Both agencies ended the incentives for full-size pickup trucks
after the end of model year 2021 believing expanded incentives would
likely not result in any further emissions benefits or fuel economy
improvements since an increase in sales volume was not anticipated. At
the time, no manufacturer had qualified to use the full-size pickup
truck incentives since they went into effect in MY 2017. One vehicle
manufacturer introduced a mild hybrid pickup truck in MY 2019 but was
ineligible for the FCIV because it did not meet the minimum production
threshold. Other manufacturers had announced potential collaborations
or started designing future hybrid or electric models, but none were
expected to meet production requirements within the time period of
eligibility for these incentives.
    Since the 2020 final rule, many manufacturers have publicly
announced several new model types of full-size electric pickup trucks
starting in MY 2022. NHTSA notes that historically it has always
encouraged manufacturers to equip emerging technologies that could lead
to significant increases in the fleet's fuel efficiency. For this
reason, even given the discontinuation in MY 2019 of AMFA incentives
for dual fueled vehicles, NHTSA retained its benefits for alternative
dedicated fueled vehicles given the growth of electric vehicles in the
market. Therefore, after the careful consideration of this new
information and the potential role incentives could play in increasing
the production of these technologies, and the associated beneficial
impacts on fuel consumption, the agency proposed in the 2021 NPRM to
extend the full-size pickup truck incentive through MY 2026 for strong
hybrids and for full-size pickup trucks performing 20-percent better
than their target.\1222\ Also, understanding the importance of electric
vehicles in the market, NHTSA proposed to allow manufacturers to
combine both the incentives for alternative fueled vehicles and full-
size pickup trucks FCIVs when complying with the CAFE program.
---------------------------------------------------------------------------

    \1222\ 86 FR 49602 (Sept. 3, 2021).
---------------------------------------------------------------------------

    NHTSA received various comments concerning its proposed changes to
the full-sized pickup truck incentive. Many of the same commenters also
submitted responses to EPA for consideration in its GHG final
rule.\1223\ The ITB Group, Ltd. (ITB Group) submitted comments
supporting reinstatement of the incentives for full-sized pickup strong
hybrids with a 20 percent improvement in performance.\1224\ The ITB
Group agrees with the justification for reinstating the full-size
pickup truck credits since full-size pick-up truck technologies are
``particularly challenging due to the need to preserve the towing and
hauling capabilities of the vehicles.'' It commented that one
improvement in the rule would be to provide a combined penetration
requirement rather than an independent 10 percent requirements for
multiple types of technologies. This would mean that any combination of
strong hybrid and other 20 percent better performance technologies
would fall under one cap. They suggest that this is an important
technology-agnostic requirement, since it is not clear that the market
will be receptive to a specific technology. As far as possible, the
standards should be flexible and technology-agnostic to incentivize
fuel consumption and CO2 emissions reductions.
---------------------------------------------------------------------------

    \1223\ See 86 FR 74434 (Dec. 30, 2021).
    \1224\ ITB Group, NHTSA-2021-0053-0019-A1, at page 6.
---------------------------------------------------------------------------

    The American Council for an Energy Efficient Economy (ACEEE)
commented that it does not support the full-size pickup truck
incentive.\1225\ ACEEE stated that this incentive is another example of
awarding credit in excess of actual emission reductions, which reduces
the stringency of the standards. It believes this specific incentive is
also problematic because the incentive could encourage the production
of full-sized pickup trucks at the expense of smaller vehicles. ACEEE
estimates that this provision alone could reduce fuel savings by up to
2 percent for the entire period of the rule, if all full-sized pick-up
trucks qualify for the credit by MY 2026.
---------------------------------------------------------------------------

    \1225\ ACEEE, NHTSA-2021-0053-0074, at page 4.
---------------------------------------------------------------------------

    MECA supported NHTSA's proposal to reinstate the original 2012
rule's full-size pick-up truck incentives for strong (full) hybrids or
similar over performing technologies.\1226\ Pick-up trucks, which are
the second most popular light-duty vehicle segment in the North
American market, are often identified as a greater technical and
consumer acceptance challenge to higher efficiency standards. The
presence of electric, full hybrid and other advanced technology vehicle
options in this segment is clearly beneficial to consumers, the
environment and energy conservation goals.
---------------------------------------------------------------------------

    \1226\ MECA, NHTSA-2021-0053-1113, at page 3.
---------------------------------------------------------------------------

    MECA further stated that the FCIVs for full-size pickups with HEV
or other over performing technologies should require the use of
additional advanced technologies that over perform targets by 20
percent. MECA feels the incentives are reasonable given that on
average, pick-up trucks consume far greater amounts of fuel per year
and are almost twice as likely to reach 200,000 miles compared to
vehicles in other LDV segments. MECA further stated that given that
large SUVs also commonly utilize the same chassis and powertrains as
pick-up trucks, it believes that NHTSA should consider extending these
advanced technology pick-up truck credits to similar large SUVs as
well.
    BorgWarner commented that it ``supports NHTSA's [FCIVs] for full-
size pick-up strong hybrids or similar overperforming technologies and
gave recognition to EPA's flexibilities. NHTSA's proposal is ambitious
and will require flexibilities to encourage technology development and
adoption.'' \1227\ BorgWarner suggested

that NHTSA should consider extending the advanced technology pick-up
truck credits to similar large SUVs since large SUVs utilize the same
chassis and propulsion systems as pick-up trucks. Hybrid trucks offer a
significant opportunity for fuel consumption improvements due to their
high sales volume and relative fuel consumption. The existing credits
have not achieved their goal of significantly increasing hybridization
of trucks. The conditions necessary to earn these credits are
stringent. Eliminating the volume requirement and awarding credits
based on a sliding scale that relates the fuel economy of a hybrid
vehicle to the same non-hybrid vehicle would provide a better incentive
for hybridization in proportion to the value of the technology.
---------------------------------------------------------------------------

    \1227\ BorgWarner, NHTSA-2021-0053-1473, at page 2.
---------------------------------------------------------------------------

    Tesla stated that, like EPA, NHTSA proposes to re-establish an
additional credit incentive for full size pickups and underestimates
the potential use of the credit.\1228\ Tesla explained that
electrification technology has become widely available and represents
the best-in-class efficiency and emission reduction technology. Just as
NHTSA acknowledges recent manufacturer announcements on electrification
in its proposal, the agency should recognize the increasing
announcements around full electric pick-up trucks. While the original
rationale for credits was to incentivize technology development for
this class of vehicles, that has now been accomplished and that
rationale no longer exists. In short, Tesla believes the technology is
available to be deployed for MY 2024-2026 vehicles, including pickups--
and simply does not justify diluting the proposed standards' compliance
stringency. Continuing multiplier incentive is unnecessary and after a
decade of being an element in standards proposals now threatens to
further institutionalize a compliance crutch for manufacturers to
deliver a limited number of compliance vehicles to maximize credit
accumulation with no incentive to deliver more wide-spread innovation
and actual deployment and the accompanying emission benefits.
---------------------------------------------------------------------------

    \1228\ Tesla, NHTSA-2021-0053-1480-A1, at page 9.
---------------------------------------------------------------------------

    Volkswagen requested that NHTSA consider extending the
applicability of high efficient vehicle FCIV factors to vehicles other
than just full-size pick-up trucks.\1229\ Volkswagen recognizes that
such an extension would require modification by EPA to part 600
regulations, and that this effort would need to be conducted in
coordination with EPA. The additional FCIV would help to incentive a
broader suite of highly fuel efficient or electrified vehicles
extending upon the basis of that used for full-size pick-ups.
---------------------------------------------------------------------------

    \1229\ Volkswagen, NHTSA-2021-0053-1548, at page 21.
---------------------------------------------------------------------------

    UCS recommended that NHTSA should eliminate flexibilities in the
proposal that will undermine the effectiveness of the CAFE
program.\1230\ These include reining in the off-cycle credit program,
which has led to a significant over-crediting of fuel consumption
reduction, and eliminating full-size pick-up incentives, which reward
status quo compliance strategies.
---------------------------------------------------------------------------

    \1230\ UCS, NHTSA-2021-0053-1567, at page 3.
---------------------------------------------------------------------------

    EPA decided to finalize a more limited time period for its full-
size pickup incentives. The EPA incentive will only be effective for
MYs 2023-2024. EPA decided not to finalize the proposed incentives for
MYs 2022 or 2025 because it believed a shorter effective period
balances the need for flexibility in the near-term with the overall
emissions reduction goals of its program. EPA stated that this more
targeted approach to full-size pickup truck credits is appropriate to
further incentivize advanced technologies in this segment, which
continues to be particularly challenging given the need to preserve the
towing and hauling capabilities while addressing cost and consumer
acceptance challenges. EPA also retained the production thresholds to
ensure that manufacturers taking advantage of the flexibility must sell
a significant number of qualifying vehicles to do so. While this
flexibility is more narrowly focused, since not all manufacturers
produce full-size pickups, it represents another avenue for credits
that may help manufacturers meet the near-term standards, in addition
to the other flexibilities included in EPA's GHG program.
    In the interest of maintaining harmonization with the EPA GHG
program, NHTSA is adopting the same proposal as EPA and will be
extending the CAFE full-size pickup truck incentives for MYs 2023 and
2024. NHTSA believes that maintaining a single compliance approach for
the industry is the most effective way to allow this joint incentive to
be implemented and maintained by EPA and NHTSA. Further, NHTSA believes
that there is merit to incentivizing the production of electric pickup
trucks which have historically lagged behind other vehicle classes. We
believe that extending the incentive for a short time frame strikes a
balance between incentivizing innovation and quicker adoption of
advance technology, without providing a windfall for technologies
already saturating the marketplace. Also, given that the agencies are
reducing the effective model years for the incentives to only be
effective for MYs 2023-2024, NHTSA is finalizing its proposal to allow
manufacturers to combine both the incentives for alternative fueled
vehicles and full-size pickup trucks FCIVs when complying with the CAFE
program for these model years.
(2) Flexibilities for Air Conditioning Efficiency
    AC systems are virtually standard automotive accessories, and more
than 95 percent of new cars and light trucks sold in the U.S. are
equipped with mobile AC systems. AC system usage places a load on an
engine, which results in additional fuel consumption; the high
penetration rate of AC systems throughout the light-duty vehicle fleet
means that more efficient systems can significantly impact the total
energy consumed. AC systems also have non-CO2 emissions
associated with refrigerant leakage.\1231\ Manufacturers can improve
the efficiency of AC systems though redesigned and refined AC system
components and controls.\1232\ That said, such improvements are not
measurable or recognized using 2-cycle test procedures since AC is
turned off during 2-cycle testing. Any AC system efficiency
improvements that reduce load on the engine and improve fuel economy is
therefore not measurable on those tests.
---------------------------------------------------------------------------

    \1231\ Notably, manufacturers cannot claim CAFE-related benefits
for reducing AC leakage or switching to an AC refrigerant with a
lower global warming potential. While these improvements reduce GHG
emissions consistent with the purpose of the CAA, they generally do
not impact fuel economy and, thus, are not relevant to the CAFE
program.
    \1232\ The approach for recognizing potential AC efficiency
gains is to utilize, in most cases, existing vehicle technology/
componentry, but with improved energy efficiency of the technology
designs and operation. For example, most of the additional AC-
related load on an engine is because of the compressor, which pumps
the refrigerant around the system loop. The less the compressor
operates, the less load the compressor places on the engine
resulting in less fuel consumption. Thus, optimizing compressor
operation with cabin demand using more sophisticated sensors,
controls, and control strategies is one path to improving the
efficiency of the AC system.
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    The CAFE program includes flexibilities to account for the real-
world fuel economy improvements associated with improved AC systems and
to include the improvements for compliance.\1233\ The total AC
efficiency credits is calculated by summing the individual credit
values for each efficiency improving technology used

on a vehicle, as specified in the AC credit menu. The total AC
efficiency credit sum for each vehicle is capped at 5.0 grams/mile for
cars and 7.2 grams/mile for trucks. Additionally, the off-cycle credit
program contains credit earning opportunities for technologies that
reduce the thermal loads on a vehicle from environmental conditions
(solar loads or parked interior air temperature).\1234\ These
technologies are listed on a thermal control menu that provides a
predefined improvement value for each technology. If a vehicle has more
than one thermal load improvement technology, the improvement values
are added together, but subject to a cap of 3.0 grams/mile for cars and
4.3 grams/mile for trucks. Under its EPCA authority for CAFE, EPA
calculates equivalent FCIVs and applies them for the calculation of
manufacturer's fleet CAFE values. Manufacturers seeking credits beyond
the regulated caps must request the added benefit for AC technology
under the off-cycle program discussed in the next section. The agency
did not propose any changes its AC efficiency flexibility and therefore
will retain its provisions in its current form.
---------------------------------------------------------------------------

    \1233\ See 40 CFR 86.1868-12.
    \1234\ See 40 CFR 86.1869-12(b).
---------------------------------------------------------------------------

(3) Flexibilities for Off-Cycle Technologies
    ``Off-cycle'' technologies are those that reduce vehicle fuel
consumption in the real world, but for which the fuel consumption
reduction benefits cannot be fully measured under the 2-cycle test
procedures (city, highway or correspondingly FTP, HFET) used to
determine compliance with the fleet average standards. The cycles are
effective in measuring improvements in most fuel economy improving
technologies; however, they are unable to measure or underrepresent
certain fuel economy improving technologies because of limitations in
the test cycles. For example, off-cycle technologies that improve
emissions and fuel economy at idle (such as ``stop start'' systems) and
those technologies that improve fuel economy to the greatest extent at
highway speeds (such as active grille shutters which improve
aerodynamics) receive less than their real-world benefits in the 2-
cycle compliance tests.
    In the CAFE rulemaking for MYs 2017-2025, EPA, in coordination with
NHTSA, established regulations extending the off-cycle technology
flexibility to the CAFE program starting with MY 2017. For the CAFE
program, EPA calculates off-cycle FCIVs that are equivalent to the EPA
CO2 credit values and applies them in the calculation of
manufacturer's CAFE compliance values for each fleet instead of
treating them as separate credits as for the EPA GHG program.
    For determining benefits, EPA created three compliance pathways for
the off-cycle program. The first approach allows manufacturers to gain
credits using a predetermined approach or ``menu'' of credit values for
specific off-cycle technologies which became effective starting in MY
2014 for EPA.1235 1236 This pathway allows manufacturers to
use credit values established by EPA for a wide range of off-cycle
technologies, with minimal or no data submittal or testing
requirements.\1237\ Specifically, EPA established a menu with a number
of technologies that have real-world fuel consumption benefits not
measured, or not fully measured, by the two-cycle test procedures, and
those benefits were reasonably quantified by the agencies at that time.
For each of the pre-approved technologies on the menu, EPA established
a menu value or approach that is available without testing
verifications. Manufacturers must demonstrate that they are in fact
using the menu technology, but not required to submit test results to
EPA to quantify the technology's effects, unless they wish to receive a
credit larger than the default value. The default values for these off-
cycle credits were largely determined from research, analysis, and
simulations, rather than from full vehicle testing, which would have
been both cost and time prohibitive. EPA generally used conservative
predefined estimates to avoid any potential credit windfall.\1238\
---------------------------------------------------------------------------

    \1235\ See 40 CFR 86.1869-12(b). The first approach requires
some technologies to derive their pre-determined credit values
through EPA's established testing. For example, waste heat recovery
technologies require manufacturers to use 5-cycle testing to
determine the electrical load reduction of the waste heat recovery
system.
    \1236\ EPA implemented its off-cycle GHG program starting in MY
2012.
    \1237\ The Technical Support Document (TSD) for the 2012 final
rule for MYs 2017 and beyond provides technology. examples and
guidance with respect to the potential pathways to achieve the
desired physical impact of a specific off-cycle technology from the
menu and provides the foundation for the analysis justifying the
credits provided by the menu. The expectation is that manufacturers
will use the information in the TSD to design and implement off-
cycle technologies that meet or exceed those expectations in order
to achieve the real-world benefits of off-cycle technologies from
the menu.
    \1238\ While many of the assumptions made for the analysis were
conservative, others were ``central.'' For example, in some cases,
an average vehicle was selected on which the analysis was conducted.
In that case, a smaller vehicle may presumably deserve fewer credits
whereas a larger vehicle may deserve more. Where the estimates are
central, it would be inappropriate for the agencies to grant greater
credit for larger vehicles, since this value is already balanced by
smaller vehicles in the fleet. The agencies take these matters into
consideration when applications are submitted for credits beyond
those provided on the menu.
---------------------------------------------------------------------------

    For off-cycle technologies not on the pre-defined technology list,
EPA created a second pathway which allows manufacturers to use 5-cycle
testing to demonstrate off-cycle improvements.\1239\ Starting in MY
2008, EPA developed the ``five-cycle'' test methodology to measure fuel
economy for the purpose of improving new car window stickers (labels)
and giving consumers better information about the fuel economy they
could expect under real-world driving conditions.\1240\ As learned
through development of the ``five-cycle'' methodology and prior
rulemakings, there are technologies that provide real-world fuel
consumption improvements, but those improvements are not fully
reflected on the ``two-cycle'' test. EPA established this alternative
for a manufacturer to demonstrate the benefits of off-cycle
technologies using 5-cycle testing. The additional emissions test
allows emission benefits to be demonstrated over some elements of real-
world driving not captured by the two-cycle CO2 compliance
tests including high speeds, rapid accelerations, hot temperatures, and
cold temperatures. Under this pathway, manufacturers submit test data
to EPA, and EPA determines whether there is sufficient technical basis
to approve the off-cycle credits. No public comment period is required
for manufacturers seeking credits using the EPA menu or using 5-cycle
testing.
---------------------------------------------------------------------------

    \1239\ See 40 CFR 86.1869-12(c). EPA proposed a correction for
the 5-cycle pathway in a separate technical amendments rulemaking.
See 83 FR 49344 (Oct. 1, 2019). EPA is not approving credits based
on the 5-cycle pathway pending the finalization of the technical
amendments rule.
    \1240\ https://www.epa.gov/vehicle-and-fuel-emissions-testing/dynamometer-drive-schedules. (Accessed: March 15, 2022)
---------------------------------------------------------------------------

    The third pathway allows manufacturers to seek EPA review, through
a notice and comment process, to use an alternative methodology other
than the menu or 5-cycle methodology for determining the off-cycle
technology CO2 credits.\1241\ Manufacturers must provide
supporting data on a case-by-case basis demonstrating the benefits of
the off-cycle technology on their vehicle models. Manufacturers may
also use the third pathway to apply for credits and FCIVs for menu
technologies where the manufacturer is able to demonstrate credits and
FCIVs greater than those provided by the menu.
---------------------------------------------------------------------------

    \1241\ See 40 CFR 86.1869-12(d).

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

(a) The Off-Cycle Approval/Denial Process
    In meetings with EPA and manufacturers, NHTSA examined the
processes for bringing off-cycle technologies into market. Two distinct
processes were identified: (1) The manufacturer's off-cycle pre-
production process, and; (2) the manufacturer's regulatory compliance
process. During the pre-production process, the off-cycle program for
most manufacturers begins as early as four to 6 years in advance of the
given model year. Manufacturers' design teams or suppliers identify
technologies to develop capable of qualifying for off-cycle credits
after careful consideration of the possible benefits. Manufacturer then
identify the opportunities for the technologies finding the most
optimal condition for equipping the technology given the availability
in the production cycle of either new or multiple platforms
capitalizing on any commonalities to increase sales volumes and reduce
costs. After establishing their new or series platform development
plans, manufacturers have two processes for off-cycle technologies on
the pre-defined menu list or using 5-cycle testing and for those for
which benefits are sought using the alternative approval methodology.
For those on the menu list or 5-cycle testing, technologies whose
credit amounts are defined by EPA regulation, manufacturers confirm
that: (1) New candidate technologies meet regulatory definitions; and
(2) for qualifying technologies, there is real fuel economy (FE)
benefit based on good engineering judgement and/or testing. For these
technologies, manufacturers conduct research and testing independently
without communicating with EPA or NHTSA. For non-menu technologies,
those not defined by regulation, manufacturers pre-production processes
include: (1) Determining the credit amounts based on the effectiveness
of the technologies; (2) developing suitable test procedures; (3)
identifying any necessary studies to support effectiveness; (4) and
identifying the necessary equipment or vehicle testing using good
engineer judgement to confirm the vehicle platform benefits of the
technology.
    While for the regulatory compliance process, the first step for
manufacturers begins by providing EPA with early notification in their
pre-model year GHG reports (e.g., 2025MY Pre-GHG are due in 2023CY) of
their intention to generate any off-cycle credits in accordance with 40
CFR 600.514-12. Next, manufacturers present a brief overview of the
technology concept and planned model types for their off-cycle
technologies as a part of annual pre-certification meetings with EPA.
Manufacturers typical hold their pre-certification meetings with EPA
somewhere between September through November two years in advance of
each model year. These meetings are designed to give EPA a holistic
overview of manufacturers planned product offerings for the upcoming
compliance model year and since 2012 information on the AC and off-
cycle programs. Thus, a manufacturer complying in the 2023 compliance
model year would arrange its pre-certification meeting with EPA in
September 2021 and would be required to share information on the AC and
off-cycle technologies its plans to equip during the model year. After
this, manufacturers report projected information on off-cycle
technologies as a part of their CAFE reports to NHTSA in accordance
with 49 CFR part 537 CAFE due by December 31st before the end of the
model year.
    According to EPA and NHTSA regulations, eligibility to gain
benefits for off-cycle technologies only require manufacturers to
reporting information in advance of the model year notifying the
agencies of a manufacturer's intent to claim credits. More
specifically, manufacturers must notify EPA in their pre-model year
reports, and in their applications for certification, of their
intention to generate any AC and off-cycle credits before the model
year, regardless of the methodology for generating credits. Similarly,
for NHTSA, manufacturers are also required to provide data in their
pre-model year reports required by 49 CFR part 537 including projected
information on AC, off-cycle, and full-size pickup truck incentives.
These regulations require manufacturers to report information on
factors such as the approach for determining the benefit of the
technology, projected production information and the planned model
types for equipping the off-cycle technology.
    If a manufacturer is pursuing credits for a non-menu off-cycle
technology, EPA also encourages manufacturers to seek early reviews for
the eligibility of a technology, the test procedure, and the model
types for testing in advance of the model year. EPA emphasizes the
critical importance for manufacturers to seek these reviews prior to
conducting testing or any analytical work. Yet, some manufacturers have
decided not to seek EPA's early reviews which resulted in significant
delays in the process as EPA has had to identify and correct multiple
testing and analytical errors after the fact. Consequently, EPA's goal
is to provide approvals for manufacturers as early as possible to
ensure timely processing of their credit requests. NHTSA shares the
same goals and views as EPA for manufacturers submissions but to-date
neither agency has created any required deadlines for these reviews.
For NHTSA, its only requirement is for manufacturers to submit copies
of all information sent to EPA at the same time.
    The next step in the credit review process is for manufacturers to
submit an analytical plan defining the required testing to derive the
exact benefit of a non-menu off-cycle technology before the model year
begins and then to start testing. It is noted that some manufacturers
failed to seek EPA's early reviews which delayed finalizing their
analytical plans and then the start of their testing. These delays had
greater impacts depending upon the required testing for the technology.
For example, some manufacturers were required to conduct a four-season
testing methodology lasting almost a year to evaluate the performance
of a technology during all environmental conditions.
    After completing testing, manufacturers are required to prepare an
official application requesting a certain amount of off-cycle credits
for the technology. In accordance with EPA regulations, the official
application request must include final testing data, details on the
methodology used to determine the off-cycle credit value, and the
official benefit value requested. EPA anticipated that these
submissions would be made prior to the end of the model year where the
off-cycle technology was applied.
    Each manufacturers' application to EPA must then undergo a public
notice and comment process if the manufacturer uses a methodology to
derive the benefit of a technology not previously approved by EPA. Once
a methodology for a specific off-cycle technology has gone through the
public notice and comment process and is approved for one manufacturer,
other manufacturers may follow the same methodology to collect data on
which to base their off-cycle credits. Other manufacturers are only
required to submit applications citing the approved methodology, but
those manufacturers must provide their own necessary test data,
modeling, and calculations of credit value specific to their vehicles,
and any other vehicle-specific details pursuant to that methodology, to
assess an appropriate credit value. This is similar to what occurred
with the

advanced AC compressor, where one manufacturer applied for credits with
data collected through bench testing and vehicle testing, and
subsequent to the first manufacturer being approved, other
manufacturers applied for credits following the same methodology by
submitting test data specific for their vehicle models. Consequently,
as long as the testing is conducted using the previously approved
methodology, EPA will evaluate the credit application and issue a
decision with no additional notice and comment, since the first
application that established the methodology was subject to notice and
comment. EPA issues a decision document regarding the manufacturer's
official application upon resolution of any public comments to its
Federal Register notice and after consultation with NHTSA. Finally,
manufacturers submit information after the model year ends on off-cycle
technologies and the equipped vehicles in their final CAFE reports due
by March 30th and then in their final GHG AB&T reports due to EPA by
April 30th.
    During the 2020 rulemaking, the agencies and manufacturers both
agreed that responding to petitions before the end of a model year is
beneficial to manufacturers and the government. It allows manufacturers
to have a better idea of what credits they will earn, and for the
government, a timely and less burdensome completion of manufacturers'
end-of-the-year final compliance processes. EPA structured the AC and
off-cycle programs to make it possible to complete the processes by the
end of the model year so manufacturers could submit their final reports
within the required deadline--90 days after the calendar year, when
CAFE final reports are due from manufacturers.\1242\
---------------------------------------------------------------------------

    \1242\ 40 CFR 600.512-12.
---------------------------------------------------------------------------

    However, at the time of the previous rulemaking, manufacturers were
submitting retroactive off-cycle petitions for review causing
significant delays to review and approval of novel technologies and
issuances of Federal Register notices seeking public comments, where
applicable. As a result, the agencies set a one-time allowance that
ended in May 2020 for manufacturers to ask for retroactive credits or
FCIVs for off-cycle technologies equipped on previously manufactured
vehicles after the model year had ended. After that time, the agencies
denied manufacturers' late submissions requesting retroactive credits.
However, manufacturers who properly submitted information ahead of time
were allowed to make corrections to resolve inadvertent errors during
or after the model year.
    Both EPA and NHTSA regulations fail to include specific deadlines
for manufacturers to meet in finalizing their off-cycle analytical
plans or the official applications to the agencies. The agencies
believed that enforcing the existing submission requirements would be
the most efficient approach to expedite approvals and set aside adding
any new regulatory deadlines or additional requirements in the previous
rulemaking. There were also concerns to provide manufacturers with
maximum flexibility and due to the uncertainties existing with the non-
menu off-cycle process. However, the agencies anticipated that any
timeliness problems would resolve themselves as the off-cycle program
reached maturity and more manufacturers began requesting benefits for
previously approved off-cycle technologies.
    Despite the agencies' expectations, the lack of deadlines for test
results or the official application has significantly delayed approvals
for non-menu off-cycle requests. In many cases, EPA has received off-
cycle non-menu application requests either late in the model year or
after the model year. This falls outside the agencies planned strategy
for the off-cycle non-menu review process whereas manufacturers would
seek approval and submit their official application requests either in
advance of the model year or early enough in the model year to allow
the agency to approve a manufacturer's credits before the end of the
model year.
(b) Changes to the NHTSA Off-Cycle Program
(i) Review Process
    The current review process for off-cycle technologies is causing
significant challenges in finalizing end-of-the-year compliance
processes for the agencies. The backlog of retro-active and pending
late off-cycle requests have delayed EPA from recalculating NHTSA's MY
2017 finals and from completing those for MYs 2018 and 2019. Fifty-four
off-cycle non-menu requests have been submitted to EPA to date.
Nineteen of the requests were submitted late and another seven apply
retroactively to previous model years starting as early as model year
2015. Since these requests represent potential credits or adjustments
that will influence compliance figures, CAFE final results cannot be
finalized until all off-cycle requests have been decided. These factors
have so far delayed MY 2017 final CAFE compliance by 28 months, MY 2018
by 15 months, and MY 2019 by 4 months.
    Until EPA verifies final compliance numbers, manufacturers are
uncertain about either how many credits they have available to trade
or, conversely, how many credits are necessary for them to cover any
shortfalls. Therefore, these late reports amount to more than just a
mere accounting nuisance for the agencies; they are actively chilling
the credit market.
    For MY 2017, NHTSA will void manufacturers previous credit trades
pending the revised final calculations. Second, until late requests are
approved, credit sellers are unable to make trades with buyers having
pending approvals or credits are sold whereas the final balance of
credits is unknown. Because credit trades and transfers must be
adjusted for fuel savings anytime a change occurs in a manufacturer's
CAFE values, the resulting earned or purchased credits must be
recalculated. These recalculations are significantly burdensome on the
government to administer and places an undue risk on manufacturers
involved in CAFE credit trade transactions.
    NHTSA met with EPA and manufacturers to better understand the
process for reviewing off-cycle non-menu technologies. From these
discussions, NHTSA identified several issues that may be influencing
late submissions. First, non-menu requests are becoming more complex
and are requiring unique reviews. Previously approved technologies are
also becoming more complex and are requiring either new testing, test
procedures or have evolved beyond the definitions which at one time
previously qualified them. Next, manufacturers identified the lack of
standardized test procedures approved by EPA or certainty from EPA on
which model types need to be tested as major sources for delays in
submitting their analytical plans. In addition, manufacturers claimed
there is significant uncertainty surrounding the necessary data sources
to substantiate the benefit of the technology. For example, the data
sources necessary to substantiate the usage rates certain technologies
in the market. Testing or extrapolating test results for variations in
model types can also be difficult and a source of delay. Manufacturers
are typically uncertain as to what configurations within a model type
must be tested and believe further guidance may be needed by EPA.
Manufacturers further claim that it is challenging to coordinate the
required testing identified by EPA for off-cycle in coordination with
other required certification and emissions testing. Several of these
issues were addressed

in the 2020 final rule. In that rulemaking, the agencies stated that
developing a standardized test procedure ``toolbox'' may not be
possible due to the development of new and emerging technologies, and
manufacturers' different approaches for evaluating the benefits of the
technologies. However, the agencies committed to considering additional
guidance, if feasible, as the programs further matures in the review
process of technologies and, if possible, identify consistent
methodologies that may help manufacturers analyze off-cycle
technologies.
    Part of the issue is that the review process begins significantly
later than the development of technology. Typically, EPA only learns
about a new off-cycle technology during manufacturers' precertification
meetings, months or even years after manufacturers started to develop
the technology. In the proposal, NHTSA sought comments on whether
opportunities exist during the initial development of off-cycle
technologies for manufacturers to start discussions with the agencies
to identify suitable test procedures or approval of the initial concept
of a new technology. After certification meetings, NHTSA also
identified that in many cases, manufacturers do not communicate with
EPA seeking approvals for their test procedures, test vehicles or
credit calculations until anywhere from 3-6 months after the initial
development of the technology. Delays in approving a suitable test
procedure extends the manufacturers ability to perform testing or to
submit its formal request for benefits until after the model year has
ended. As mentioned, testing can take up to 12 months after a suitable
test procedure and identifying which subconfigurations must be tested.
    One manufacturer also stated that set submission deadlines are
impossible, agency approvals are variable based on OEM need and reply
timing is driven by the EPA. When questioned whether any deadlines
could be imposed manufacturers responded believing that any deadlines
would need to be negotiated between the manufacturer and the
government. NHTSA asked manufacturers to comment on any drawbacks
associated with negotiating and enforcing possible off-cycle process
deadlines as a part of the proposal.
    NHTSA also proposed to modify the eligibility requirements for non-
menu off-cycle technologies in the CAFE program starting in model year
2024. NHTSA proposed for manufacturers to finalize their analytical
plans by December before the model years and their final official
technology credit requests by September during the model year. It was
also proposed for manufacturers to meet the proposed deadlines or be
subject an enforcement action unless an extension was granted by NHTSA
for good cause. Otherwise, a manufacturer would be precluded from
claiming any off-menu items not timely submitted. Failure to request
extensions or meet negotiated deadlines would be subject to enforcement
action in compliance with 49 U.S.C. 32912(a).
    To further streamline the process of reviews, NHTSA also proposed
to work with EPA to create a quicker process for adding off-cycle
technologies to the predetermined menu list if widely approved for
multiple manufacturers. For example, the agencies added high-efficiency
alternators and advanced AC compressors to the menu allowing
manufacturers to select the menu credit rather than continuing to seek
credits through the public approval process. High-efficiency
alternators were added to the off-cycle credits menu, and advanced AC
compressors with a variable crankcase valve were added to the menu for
AC efficiency credits. The credit levels are based on data previously
submitted by multiple manufacturers through the off-cycle credits
application process. The high efficiency alternator credit is scalable
with efficiency, providing an increasing credit value of 0.16 grams/
mile CO2 per percent improvement as the efficiency of the
alternator increases above a baseline level of 67 percent efficiency.
The advanced AC compressor credit value is 1.1 grams/mile for both cars
and light trucks.\1243\
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    \1243\ For additional details regarding the derivation of these
credits, see EPA's Memorandum to Docket EPA-HQ-OAR-2018-0283
(``Potential Off-cycle Menu Credit Levels and Definitions for High
Efficiency Alternators and Advanced Air Conditioning Compressors'').
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    Several comments were received in response to the NPRM. Commenters
included several trade and environmental groups including Auto
Innovators, ACEEE, the ITB Group and NADA as well as vehicle
manufacturers including Ford, Hyundai and Stellantis.
    Auto Innovators commented that time is of the essence when a
manufacturer submits an off-cycle credit application for review.
Lengthy delays in processing applications and in reviews subsequent to
the public notice and comment process introduce uncertainty into
compliance planning and reporting for manufacturers. Delays also affect
timely determinations of compliance and valuation of credit trades and
transfers. They also discourage further investments in off-cycle
technologies due to the uncertainty of when (or if) credit will ever be
granted.
    Auto Innovators further explained that EPA is required to review an
application for completeness and to notify the submitting manufacturer
if additional information is required within 30 days. Subsequent to
determining an application is complete, EPA is required to make the
application available to the public for comment within 60 days. These
two processes should collectively take a maximum of 90 days. Thus far
in 2021, three applications that reached publication in the Federal
Register took 111, 290, and 342 days. Other applications are still
pending review or publication for public comment. Auto Innovators urged
EPA to follow its regulations by providing an initial response on the
completeness of credit applications within 30 days and to make complete
applications available for public comment within 60 days. Auto
Innovators commented that once the public comment period closes, the
EPA decision process is also frequently lengthy. For example, Auto
Innovators claimed EPA published off-cycle credit applications for
public comment from Toyota in April 2020 and in October 2020, Nissan in
February 2021, and from Stellantis in April 2021, and as of their
comment submission, all three were still pending a decision.
    NHTSA is also proposing to impose new deadlines associated with
off-cycle technology FCIVs applied for under the ``alternative method''
pathway. Although, Auto Innovators agrees that implementation of the
alternative method pathway has been time-consuming and has not met the
expectations of the agencies, automobile manufacturers, and suppliers,
it is unclear if the imposition of additional deadlines will result in
improvements, or simply add additional administrative burden to an
already cumbersome process. Auto Innovators stated that the agencies
already took steps to improve the timeliness of the process in the 2020
SAFE rule and that NHTSA should allow these process improvements to
play out before imposing additional, unilateral deadlines.
    American Council for an Energy Efficient Economy (ACEEE) commented
it supports adding a firm time limit on automaker applications to the
non-menu off-cycle credit program. They claim that this program has
long been plagued by automaker applications for technologies
implemented on old vehicle models. These retroactive requests have no
bearing on current OEM technology decisions and cost a significant
amount of time to process.

Lastly, they make setting future standards difficult, as actual
contemporary compliance is not set in stone. Requiring automakers to
submit their requests for off-cycle credits in a timely manner would
improve the effectiveness of the off-cycle program. For these reasons
ACEEE supports NHTSA in its proposed time limit on application for non-
menu off cycle credit applications.
    The ITB Group also supported NHTSA efforts for streamlining the
off-cycle credit approval process. The ITB Group agreed with NHTSA that
the off-cycle credit approval process can be improved. NHTSA proposed
setting deadlines for OEM submissions, and the ITB Group suggests that
there should also be deadlines for the agencies (EPA/NHTSA) to respond
to off-cycle credit request submissions for the off-menu approval
pathways. The ITB Group also recommends the development of a formal
process for adding technologies to the menus and adjusting menu credits
when necessary.
    The National Automobile Dealers Association (NADA) commented
sharing the same concerns expressed by Auto Innovators regarding the
changes proposed by NHTSA.
    Ford submitted comments supporting NHTSA's goal for more timely
resolution of ``Demonstration'' off-cycle credit applications. Ford
commented that EPA already codified requirements in 40 CFR 86.1869-12
for manufacturers to submit a detailed analytical plan prior to the
model year in which a manufacturer intends to seek these credits and
for EPA to make the demonstration applications available for public
review within 60 days of receiving a completed application. Ford
believed that NHTSA can make the most meaningful impact to improve the
process through internal review with EPA rather than imposing
additional deadlines on manufacturers.
    Hyundai commented that the off-cycle alternative process involves
testing and assessment of new and novel technologies which reduce fuel
consumption. While this process remains complicated, Hyundai recognized
that some improvements were made to the off-cycle credit approval
process in the 2020 rulemaking to address procedural issues. And
Hyundai appreciated that the agencies continue to pursue improvements,
such as ``considering additional guidance'' and to, ``if possible,
identify consistent methodologies that may help manufacturers analyze
off-cycle technologies.''
    Hyundai is one of several auto manufacturers who have long-pending
applications, some from 2020. Speedy reviews are critical to automakers
to ensure that investments in technologies are implemented in a timely
manner. Long application review and approval timelines for technologies
using the alternative process cause uncertainty about the number of
credits manufacturers earned for each model due to unresolved
applications. Manufacturers may not know if they will be in a position
to buy or to sell credits until all applications are resolved.
Manufacturers may also need to resubmit final model year reports once
extended approval processes are resolved. This is inefficient and
creates additional work for both the agency and the automakers.
    In its comments to the EPA on their GHG NPRM, Hyundai called on
both auto manufacturers and the agency to be held to timing
requirements. Automakers should submit off-cycle applications in a
timely manner. Similarly, the EPA should make applications available
for a 30-day public comment period within 90 days of the manufacturers'
submission and then establish a reasonable timeline to issue a decision
on the applications. Hyundai recommends 60 days for the agency to
review after the public comment period closes. This would result in a
maximum review period of 180 days which would be timelier than the
approval length for some current applications.
    Further Hyundai responded to NHTSA's request for comment on whether
there are opportunities to engage earlier in the off-cycle technology
development process with manufacturers. Hyundai stated it welcomes the
opportunity to improve the approval process by discussing technology
and test procedures with the agency earlier, however this is only
possible once the development process has progressed to a point where
the technology has reached a certain maturity, thus having these
conversations earlier may not be possible in all cases.
    Furthermore, Hyundai stated that in some off-cycle technology
testing NHTSA's new timing proposal includes a requirement that
automakers deliver analytical plans to the agency by December before
the model year and deliver the final official technology credit request
by September during the model year may not be suitable. For some
applications, the agency may need a full year (12 months) of fleet-
level data to support the technology credit request. This full year of
data provides extensive on-road vehicle information under different
weather conditions to prove-out an applied technology's real-world
benefits. In some cases, the proposed September delivery target
precludes a full year of data collection. For example, a 2022 model
year vehicle could begin production in June 2022 and require data to be
submitted in September 2022, just three months after production begins.
In this example, it is not possible to provide a full 12 months of
fleet level supporting data. Hyundai requests that the agency clarify
how they would accommodate this type of situation and structure the
process to allow auto manufacturers to fulfill all of the agencies'
requirements within the newly proposed application deadline.
    Hyundai also responded to NHTSA's other comment request on
drawbacks associated with enforcing strict deadlines for off-cycle
applications. Hyundai stated while it recognizes and shares the
agencies frustration that the off-cycle approval process can be
protracted, we caution that strict enforcement will lead some
automakers to reduce investment in off-cycle credit technologies. If
manufacturers are uncertain that they will receive proper credit for
the inclusion of these fuel saving technologies, they may decide they
cannot justify the investment in research and development of new
technologies resulting in lost real-world fuel efficiency improvements.
Hyundai requested that NHTSA develop an extension process to facilitate
the inherent flux of the development process for these advanced
technologies.
    Stellantis commented that the agency is proposing to remove menu
credit for technologies that impact OEMs as soon as MY2023. Recovering
this lost credit outside of the menu is infeasible since the
alternative methodology off-cycle application submission process can
take a year or longer with uncertain outcome. There are a large number
of off-cycle industry applications awaiting action by agency staff.
While some of this is certainly due to COVID-19 challenges, the overall
lack of movement is concerning. OEMs have yet to be asked technical
questions on many applications, and, when responses have been requested
and supplied, it is unclear of what happens next.
    Stellantis commented that one improvement that would certainly help
would be to set up a system to make the alternative methodology
application process more transparent. It would be useful if the
agencies could report the non-confidential status of all off-cycle
alternative methodology applications on a quarterly basis to industry.

    Stellantis also proposed that a notice of availability be published
in the Federal Register for all off-cycle alternative methodology
applications after 90 days if the agency has not yet completed the
review of the application for completeness, and if applicable, notify
the applicant of additional information being required. This review and
communication back to the applicant is required to happen within 30
days of submission. Automatically publishing the application after 90
days (three times the length of the required review period) will allow
the public comment period to begin and will help this process function
as intended.
    Stellantis suggested that NHTSA work to align all off-cycle
reporting processes with EPA and not introduce additional burdens on
timing with different reporting timelines or new safety considerations
upon the system that is already constrained.
    Stellantis is willing to solicit industry to partner with the
agencies to help identify and implement process improvements to
evaluate and decision applications more quickly.
    For industry awareness, NHTSA meets with EPA on a biweekly basis to
consult on non-menu off-cycle requests from manufacturers. Based upon
our interactions and knowledge of potential barriers learned to date,
NHTSA has decided for its final rule to retain its deadlines and
enforcement actions proposed in the NPRM and to add additional internal
administrative processes to better facilitate the off-cycle program.
More specifically, NHTSA plans to implement the same monitoring
processes it uses for its safety enforcement programs. This involves
creating a public case file, which is the official record of all
communication and records between an entity and the government. NHTSA
will use these case files for evaluating any extension requests from
manufacturers and as the basis for any process changes to its off-cycle
program in future rulemakings. We believe this administrative process
will also help to identify any delays in complying with 40 CFR 86.1869-
12(e)(3)(i) and (iii), which Auto Innovators and Stellantis commented
collectively should take a maximum of 90 days but to date have taken
far longer. Although not officially documented, we are aware that
notifying manufacturers for additional information within 30 days is a
longer process because usually several requests are needed before all
the required information is obtained by EPA to determine that an
application is complete.
    At present, the agencies share an unofficial simplified spreadsheet
for tracking off-cycle requests which is discussed during each joint
biweekly meeting. Consequently, we do believe manufacturers concerns
have some legitimacy concerning the timing in issuing Federal Register
notices. However, it was for these reasons EPA adopted changes in their
2020 SAFE rule allowing them to forgo issuing Federal Register notices
for technologies that have been previously approved. In addition, we
note that these delays exist, as noted by commenters, because the
agencies allowed manufacturers to claim retroactive off-cycle credits
until May 2020, which has created a backlog of requests drastically
delaying processing other requests. As indicated by Auto Innovators,
the agencies are allowing these retroactive requests to play out before
imposing additional actions such as possible cut-off dates.
    In the future, NHTSA is considering adding additional requirements
to help resolve delays in the requirement for EPA to notify
manufacturers of its decision within 60 days of receiving a complete
application as required in 40 CFR 86.1869-12(e)(4)(i). NHTSA has
identified that some manufacturers have significant delays in
responding back to EPA after requests for additional information have
been made. Rarely does EPA receive all the information it needs to
complete the manufacturers application and make its decision within 60
days. In some instances, manufacturers have even failed to respond to
EPA for over a month, cutting considerably into the 60-day response
timeline. NHTSA is considered adding a deadline requirement in the
future for responding back to the agencies which would serve as
criteria for denying a manufacturer's request, although as requested by
Stellantis, we believe more transparency and better official tracking
between the government and manufacturers is a more feasible approach at
this time.
    We will also attempt to develop a public report to track approved
or disapproved off-cycle requests on the NHTSA PIC site and will host
at least one compliance meeting annually with interested parties to
share our case files and discuss other potential improvements to the
off-cycle processes. NHTSA and EPA will also take steps to explore
formal processes for adding technologies to the menus and adjusting
menu credits when necessary. Finally, since some requests need a full
year (12 months) of fleet-level data to support the technology credit
request (such as extensive on-road vehicle information under different
weather conditions), which may extend beyond NHTSA's September
deadline, NHTSA requests automakers to consider submitting these off-
cycle applications ahead of time. NHTSA will track manufacturer
submissions, and should the manufacturers fail to meet NHTSA's deadline
requirements, manufacturers will need to provide sufficient
documentation explaining their missed deadline in order to request an
extension.
(ii) Safety Assessment
    In the 2016 heavy-duty fuel economy rule (81 FR 73478, Oct. 25,
2016), NHTSA adopted provisions preventing manufacturers from receiving
off-cycle credits for technologies that impair safety--whether due to a
defect, negatively affecting a FMVSS, or other safety reasons.\1244\
Additionally, NHTSA clarified that technologies that do not provide
fuel savings as intended will also be stripped of credits. To harmonize
the light-duty and heavy-duty off-cycle programs, NHTSA proposed to
adopt these provisions for the light-duty CAFE program as a part of its
2021 NPRM.\1245\ While the agency encourages fuel economy innovations,
safety remains NHTSA's primary mission and any technology applied for
CAFE-purposes should not impair safety. Furthermore, adopting these
requirements for the light-duty fleet will harmonize it with
regulations for heavy-duty vehicles.
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    \1244\ See 49 CFR 535.7(f)(2)(iii).
    \1245\ 86 FR 49602 (Sept. 3, 2021).
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    In response to the proposal, Auto Innovators commented opposing
NHTSA's new processes for reviewing applications for off-cycle fuel
economy improvement credits in order to assess the safety of the
proposed technology and to remove credits if a safety defect is
identified. Auto Innovators understands that NHTSA's primary mission is
safety and applauds the agency's commitment to ensuring that technology
intended to enhance fuel efficiency does not impair safety. However, it
explained that NHTSA's proposal goes too far--a technology can be
``defective'' for reasons unrelated to safety or fuel economy. NHTSA's
criterion ``identified as a part of NHTSA's safety defects program'' is
unclear, as is the context of ``performing as intended.'' The proposal
to require manufacturers applying for off-cycle credits to state that
each vehicle equipped with the off-cycle technology will comply with
all applicable Federal Motor Vehicle Safety Standards (FMVSS) is
unnecessary, and it is

unclear how the requirement to describe fail-safe provisions will work
as a practical manner.
    The National Automobile Dealers Association (NADA) commented
sharing its support for Auto Innovators' opposition to NHTSA's proposed
safety provisions.
    Hyundai commented that NHTSA's provisions are not necessary because
every vehicle sold in the United States is already designed with safety
in mind and complies with all applicable FMVSS safety rules. Further,
there are processes in place to address any component failures that may
impact safety.
    Lucid commented stating that it supports NHTSA's proposal to
rescind credits for off-cycle technologies that are found to be
defective or otherwise impair vehicle safety, as is NHTSA's practice in
the heavy-duty context. This proposal recognizes and puts into practice
NHTSA's mission of preserving vehicle safety and ensures that
manufacturers are not unduly rewarded for innovations that ultimately
make their vehicles less safe.
    In response to Auto Innovators' and NADA's concerns, we note that
the new requirement does not change the certification process or
awarding of OC credits. As noted in the proposal, this new provision
would only take effect after a safety defect was discovered. We also
note that OC technologies are intended to improve fuel economy, and
that awarding defective technology that does not improve off-cycle fuel
efficiency undermines the program. NHTSA experience with its heavy-duty
program has proven that manufacturers can comply with these provisions.
Addressing safety is just as critical to manufacturers as it is to
NHTSA and all manufacturers had fail-safe designs which they identified
with their heavy-duty application requests. We plan to use our existing
enforcement processes administered by the Office of Defects
Investigations and the Office of Vehicle Safety Compliance to identify
potentially or existing safety concerns with fuel efficiency
technologies. For example, NHTSA will search through vehicle owner
complaints, manufacturer's warranty claims, internet information and
part 573 recalls submitted by manufacturers for safety related problems
involving incentivized fuel efficiency technologies. Should a recall
result or exist, it will be necessary for the manufacturer to remedying
all the defective or non-compliant equipment in order to maintain its
fuel efficiency credits for an off-cycle technology regardless of
whether the safety problem has a direct bearing on fuel savings.
Otherwise, the credits will be removed or adjusted to the number of
remedied vehicles. NHTSA believes that that these provisions will
ensure that emphasis remains on protecting the safety of vehicle
occupants for both the Government and for motor vehicle manufacturers.
(iii) Menu Credit Cap
    In the NPRM, NHTSA proposed a temporary increase in the off-cycle
menu credit cap from 10 to 15 g/mile from MY 2023 through 2026 to align
with the EPA GHG program. Coinciding with the increased menu cap, NHTSA
proposed adopting revised definitions for certain off-cycle menu
technologies in order to better capture real-world GHG emission
improvements of specific menu technologies.
    Due to the uncertainties associated with combining menu
technologies and the fact that some uncertainty is introduced because
off-cycle credits are provided based on a general assessment of off-
cycle performance, as opposed to testing on the individual vehicle
models, NHTSA and EPA established caps that limit the amount of credits
a manufacturer may generate using the off-cycle menu list. Historically
EPA and NHTSA have capped off-cycle menu technologies at 10 grams/mile
per year on a combined car and truck fleet-wide average basis. In its
most recent rulemaking for MYs 2023-2026 GHG standards, EPA finalized
the increase in the off-cycle menu cap from 10 grams CO2/
mile to 15 grams CO2/mile beginning with MY 2023. EPA also
revised the definitions for passive cabin ventilation and active engine
and transmission warm-up beginning in MY 2023, as discussed in the next
following sections. EPA did not retroactively adopt these provisions
for MY 2020-2022 as originally proposed in their GHG NPRM. NHTSA is
aligning with the EPA GHG program and adopting the same provision to
increase the off-cycle menu technology cap to 15 g/mile and adopting
the new definitions of active transmission warm-up and passive cabin
ventilation for MYs 2023-2026. Credits established under the 5-cycle