Jeep Patriot (2.4L CVT),
                                                                                Nissan Altima (3.5L),
                                                                                Porsche Boxster (Manual),
                                                                                Subaru Forester, Toyota
                                                                                4Runner (2.7L), Toyota
                                                                                Camry (3.5L), Toyota
                                                                                Highlander (2WD), Toyota
                                                                                RAV4 (3.5L), Toyota
                                                                                Tacoma (2.7L 2WD).
C+.........................  459-535....................  18-19.....................  BMW 750Li (4.4L 2WD),
                                                                                Cadillac CTS (3.0/3.6L,
                                                                                Manual), Chevrolet
                                                                                Corvette (6.2L Automatic,
                                                                                7.0L), Chevrolet Express
                                                                                1500 (4.3L), Chevrolet
                                                                                Silverado 15 (4.3L 2WD,
                                                                                5.3L), Chevrolet Tahoe
                                                                                1500, Dodge Charger (3.5/
                                                                                5.7L with 5-speed
                                                                                Automatic), Dodge Grand
                                                                                Caravan (3.3L, 3.8L),
                                                                                Ford Explorer (4.6L 2WD),
                                                                                Ford F150 (2WD 6-speed
                                                                                Automatic), Ford Mustang
                                                                                (4.0L Automatic, 4.6L,
                                                                                5.4L), Ford Ranger (4.0L
                                                                                Automatic), GMC Canyon
                                                                                (3.7L, 5.3L 2WD), GMC
                                                                                Sierra 15 (4.3L 2WD,
                                                                                5.3L), Honda Pilot,
                                                                                Jaguar XJ, Jeep Grand
                                                                                Cherokee (3.7L), Kia
                                                                                Sedona, Toyota 4Runner
                                                                                (4.0L), Toyota Highlander
                                                                                (4WD), Toyota Sienna,
                                                                                Toyota Tacoma (2.7L 4WD,
                                                                                4.0L Automatic), Toyota
                                                                                Tundra (4.6L 2WD).

C..........................  536-611....................  16-17.....................  BMW 750Li (4.4L 4WD, 6.0L
                                                                                2WD), Cadillac CTS (6.2L,
                                                                                Manual), Chevrolet
                                                                                Corvette (6.2L Manual),
                                                                                Chevrolet Express 1500
                                                                                (5.3L), Chevrolet
                                                                                Silverado 15 (4.3L 4WD,
                                                                                4.8L, 6.3L 2WD), Dodge
                                                                                Charger (6.1L), Ford
                                                                                Explorer (4.0L and 4.6L
                                                                                4WD), Ford F150 (4-speed
                                                                                Automatic, 4WD 6-speed
                                                                                automatic), GMC Canyon
                                                                                (5.3L 4WD), GMC Sierra 15
                                                                                (4.3L 4WD, 4.8L, 6.2L),
                                                                                Jeep Grand Cherokee
                                                                                (5.7L), Nissan Titan
                                                                                (2WD), Toyota Tacoma
                                                                                (4.0L Manual), Toyota
                                                                                Tundra (4.0L, 4.6L 4WD,
                                                                                5.7L 2WD).
C-.........................  612-688....................  14-15.....................  Aston Martin DBS, BMW M5,
                                                                                Cadillac CTS (6.2L,
                                                                                Automatic), Chevrolet
                                                                                Silverado 15 (6.3L 4WD),
                                                                                GMC Sierra 15 (6.2L 4WD),
                                                                                Land Rover Range Rover,
                                                                                Lexus LX 570, Maserati
                                                                                Quattroporte, Nissan
                                                                                Titan (4WD), Toyota
                                                                                Tundra (5.7L 4WD).
D+.........................  689-764....................  13........................  Ferrari 599 GTB Fiorano,
                                                                                Mercedes-Benz Maybach 57.
D..........................  765 and up.................  12 and down...............  Ferrari 612 Scaglietti.
----------------------------------------------------------------------------------------------------------------

    One potential issue with this approach is that a rating system
based on CO2 emissions may not be an adequate proxy for a
fuel economy rating system if the agencies decide in the final rule to
allow manufacturers to use A/C credits in determining their
CO2 emissions values. Since fuel economy by definition does
not account for HFC leakage, a CO2 rating boosted by A/C
leakage credits would not accurately represent the vehicle's fuel
economy rating. EISA requires that labels include a rating system that
allows consumers to compare fuel economy across vehicles, so a fuel
economy rating system that includes HFC leakage arguably would not meet
these requirements. The proposed Label 1 would address this issue,
whether A/C were included in the letter-grade rating or not, by virtue
of also having the absolute rating scale for fuel economy at the bottom
of the label. Still, the agencies seek comment on whether a rating
system that combined fuel economy and CO2 emissions could
accurately describe both if A/C credits were permitted to be included
in the rating system for CO2.
    Another issue with using a CO2-based method is the fact
that some diesel vehicles would see their rating reduced by \1/2\
letter grade--i.e., diesel vehicles would appear ``worse'' to the
consumer in the rating system--relative to an approach that relied on
MPG or fuel consumption, given the higher carbon content of a gallon of
diesel fuel compared to a gallon of gasoline. This could potentially
discourage some sales of diesel vehicles if consumers are influenced by
the rating system, which the agencies may not necessarily want to
accomplish. However, because a consistent basis is needed across all
fuels, MPGe would need to be used rather than MPG: This would provide
equivalency on an energy basis rather than a volume basis, and would
allow the use of an MPG-type metric across fuels that are not dispensed
by the gallon, such as CNG and electricity. Since gasoline, diesel,
biodiesel, and ethanol have nearly equivalent ratios of energy to
carbon, the choice of MPGe versus CO2/mile has minimal
impact on the rating system results, particularly for liquid fuels. The
agencies nevertheless seek comment on how significantly a
CO2-based rating system might impact diesel sales, and
whether an MPGe-based rating system might ameliorate any such impact,
and if so, how that rating system would need to be structured for
technology neutrality.
    In practical terms, this means that the rating system would include
all vehicles for which fuel economy information and labeling is
required, which currently includes all passenger automobiles and light
trucks as defined by NHTSA at 49 CFR part 523. More specifically, the
rating system would span all automobiles up to 8,500 pounds gross
vehicle weight, plus some vehicles (large SUVs and some passenger vans)
between 8,500 and 10,000 pounds gross vehicle weight. We believe that
this is consistent with the intent of Congress, based on the text of
EISA which refers clearly to labels for ``automobiles'' rather than
``passenger'' or ``non-passenger automobiles,'' and which states that
the rating system must include a designation of the vehicle with the
highest fuel economy and lowest GHG emissions.\74\ The approach of
including all vehicles in a single rating system is supported by the
market research and literature reviews done for this proposal, which
show that, while prospective vehicle purchasers narrow their choices by
vehicle type early in the buying decision, they do not focus narrowly
on a single class, at least as defined by EPA. Focus group participants
indicated that they shopped, on average, across two to three vehicle
classes.\75\ For these consumers, a single rating system will enable
them to make accurate vehicle comparisons across whichever vehicles
they choose to shop. Market research also indicates that consumers have
varying definitions of what constitutes a specific vehicle class, thus
making it challenging to categorize vehicles in a way that is useful
for all consumers.
---------------------------------------------------------------------------

    \74\ 49 U.S.C. 32908(g)(1)(A)(ii).
    \75\ Environmental Protection Agency Fuel Economy Label: Pre-
Focus Groups Online Survey Report, EPA420-R-10-907, August 2010, p.
18.
---------------------------------------------------------------------------

    Nevertheless, EPA is seeking comment on rating passenger cars
separately from light duty trucks under its authority to require other
information related to fuel economy as authorized by the Administrator
at 49 U.S.C. 32908(b)(1)(F).\76\ In this case, EPA would propose to use
the same definitions for cars and trucks used for light-duty fuel
economy and GHG standards, which are NHTSA's definitions provided in 49
CFR part 523. Doing so would be consistent with automaker obligations
under those requirements, in which cars and trucks have separate sets
of standards. Additionally, market research shows that, while many
people shop across several narrowly-defined classes, about two-thirds
shop exclusively among either trucks or cars. These consumers might
find it useful to compare among only those vehicles of interest. If a
commenter believes that separate rating systems for cars and trucks
would be preferable, EPA especially seeks comment on whether those
consumers that shop among both cars and trucks could adequately compare
across their vehicles of interest if ratings systems were separated,
and whether or not the emerging ``crossover'' market will make this
``car/truck'' distinction increasingly less relevant and potentially
confusing to the public.\77\
---------------------------------------------------------------------------

    \76\ NHTSA does not interpret 49 U.S.C. 32908(g)(1)(A)(ii) as
permitting rating systems based on less than the entire fleet, so a
rating system for fuel economy and/or GHG emissions based on only
the car or truck fleet would not be sufficient to satisfy EISA's
requirement, although EPA could require such a rating system under
its authority.
    \77\ For example, under NHTSA's and EPA's definitions, the same
version of a crossover could potentially be a ``car'' if it were two
wheel drive and a ``truck'' if it were four wheel drive. A consumer
looking at the labels of these two vehicles side by side might find
it challenging to understand why their ratings were different.

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

5. Other Emissions Performance and Rating System
    In addition to fuel economy and greenhouse gas information and
ratings, EISA requires new vehicles to also be labeled with information
reflecting a vehicle's performance in terms of ``other emissions,'' and
a rating system that would make it easy for consumers to compare the
other emissions of automobiles at the point of purchase.\78\ Unlike
fuel economy and GHG emissions, EISA does not expressly require the
designation of the ``best'' vehicle in terms of other emissions. This
section lays out the criteria that EPA proposes NHTSA use to form the
basis for other emissions performance and ratings. Concurrently, NHTSA
proposes that these criteria be used as the foundation for information
that is provided on the label.
---------------------------------------------------------------------------

    \78\ 49 U.S.C. 32908(g)(1)(A).
---------------------------------------------------------------------------

    Congress did not precisely define in EISA which of the pollutants
in the universe of possible candidates for ``other emissions'' should
be included for labeling purposes. The agencies assume that Congress
did not intend to create any new substantive requirements as part of
this labeling provision for pollutants that are not currently regulated
and, thus, propose that ``other emissions'' include those tailpipe
emissions, other than CO2, for which vehicles are required
to meet current emission standards. These air pollutants comprise both
criteria emissions regulated under EPA's National Ambient Air Quality
Standards and air toxics, and include:
     NMOG--non-methane organic gases;
     NOX--oxides of nitrogen;
     PM--particulate matter;
     CO--carbon monoxide; and
     HCHO--formaldehyde.
    Auto manufacturers must provide the agency with emission rates of
these pollutants for all new light duty vehicles each model year under
EPA's Tier 2 light duty vehicle emissions standards requirements,\79\
or the parallel requirements for those vehicles certified instead to
the California emissions standards.\80\ Emission standards for these
pollutants are aggregated into bins; each bin contains emissions limits
on a gram per mile basis for each of the aforementioned pollutants for
the useful life of the vehicle, as shown in Table II.A.5-1. To be
eligible for sale in the United States, each vehicle model and
configuration must be certified to a specific bin, meaning that the
automaker is confirming that the vehicle is designed not to exceed the
specified emission rates for any of the pollutants over the useful life
of the vehicles. Automakers must submit data to EPA that demonstrates
compliance with these levels, with a requirement that their fleet
achieve a sales-weighted NOX average equivalent to the Bin 5
standard or cleaner annually. California and states that have adopted
California emissions standards in lieu of the federal standards have
similar sets of emissions standards, known as the Low Emitting Vehicle
II (LEV II) standards.\81\
---------------------------------------------------------------------------

    \79\ 40 CFR part 86, subpart S.
    \80\ 42 U.S.C. 7543(b), Clean Air Act Section 209, gives
California special authority to enact stricter air pollution
standards for motor vehicles than the federal government's, as long
as under certain requirements are met. 42 U.S.C. 7507, Clean Air Act
Section 177, allows states, under certain conditions, to adopt
California's vehicle emission standards. See 40 CFR 86.1844-01.
    \81\ The California Low-Emission Vehicle Regulations for
Passenger Cars, Light-Duty Trucks and Medium-Duty Vehicles, Title
13, California Code of Regulations (last amended March 29, 2010).

                          Table II.A.5-1--U.S. EPA Light Duty Tier 2 Emission Standards
----------------------------------------------------------------------------------------------------------------
                                   Emission limits at full useful life (120,000 miles) for model year 2004 and
                                     later light duty vehicles, light duty trucks, and medium duty passenger
                                                                     vehicles
                                --------------------------------------------------------------------------------
                                   NOX  (g/mi)    NMOG  (g/mi)      CO  (g/mi)      PM  (g/mi)     HCHO  (g/mi)
----------------------------------------------------------------------------------------------------------------
Bin 1..........................            0              0                  0              0              0
Bin 2..........................            0.02           0.01               2.1            0.01           0.004
Bin 3..........................            0.03           0.055              2.1            0.01           0.011
Bin 4..........................            0.04           0.07               2.1            0.01           0.011
Bin 5..........................            0.07           0.09               4.2            0.01           0.018
Bin 6..........................            0.1            0.09               4.2            0.01           0.018
Bin 7..........................            0.15           0.09               4.2            0.02           0.018
Bin 8..........................            0.2            0.125              4.2            0.02           0.018
----------------------------------------------------------------------------------------------------------------

    The agencies considered whether to provide specific information and
ratings for each of these individual pollutants listed above. EPA Tier
2 emission regulations do require manufacturers to submit specific
information regarding the performance of each vehicle for each of these
pollutants, but the agencies believe that attempting to require all of
it to be represented on the fuel economy label, along with rating
systems for each, would be unduly burdensome and not reasonable given
space constraints and the need to present all the other information
required by EPCA and EISA.
    In addition, in the focus groups conducted for this proposal,
consumers' interest in actual emissions levels across multiple
pollutants was minimal, and this level of detail is likely to be well
beyond that which most members of the public would seek or find
useful.\82\ Repeatedly, focus group participants reflected that it was
the job of the government to determine the relative importance of the
pollutants, and that the label should not leave this determination up
to the individual. Given that EISA did not specify exactly which
pollutants would make up ``other emissions'' and given focus group
feedback that differentiation between other emissions did not add value
for many participants, the agencies are not proposing to provide
pollutant-specific information on the label for ``other emissions.''
Nevertheless, the agencies seek comment on whether pollutant-specific
information and ratings might have value to consumers beyond what the
agencies have seen in their focus group research, and if so, how the
agencies might design a label to require pollutant-specific information
and ratings that would make it easy for consumers to compare other
pollutant emissions across vehicles at the point of purchase.
---------------------------------------------------------------------------

    \82\ Environmental Protection Agency Fuel Economy Label: Phase 1
Focus Groups, EPA420-R-10-903, August 2010, p. 29.
---------------------------------------------------------------------------

    Instead, the agencies believe that a rating based on the groups of
emissions standards--either the Federal Tier 2 bin system or the
California LEV II system, as appropriate--can and should be used

to meet this requirement. This approach mirrors the current Air
Pollution Score on EPA's Green Vehicle Guide (http://www.epa.gov/
greenvehicle). Vehicle certification under either the Federal Tier 2
bin system or the California LEV II system allows auto manufacturers to
certify that their vehicles will fall into an emissions range across
each of the regulated pollutants. In effect, the Federal and California
systems rate vehicles according to their air pollution emissions by
compiling the requirements across multiple pollutants into one category
(a Tier 2 bin or a LEV II standard). Though these systems are useful
for regulatory compliance, they have limited recognition among
consumers. However, relative rating systems are well-recognized by the
public, and the Federal emissions bins and California standards
categories are well-suited to conversion to a relative rating system
that would be readily understandable.
    EPA and NHTSA therefore propose to establish a rating system for
``other emissions'' in which each rating is associated with a bin from
the Federal Tier 2 emissions standards (or comparable California
emissions standard). Table II.A.5-2 provides an example of how such a
system would work for a ten-point rating scale.\83\ Various graphical
representations of this rating are being contemplated, as discussed in
Section III.
---------------------------------------------------------------------------

    \83\ Under EPA regulations, Independent Commercial Importers
(ICIs) are allowed to import a limited number of older vehicles that
can be certified to the emission standards which were in effect at
the time the vehicle was produced. In some cases, these standards
may be pre-Tier 2 standards. Because the rating system being
proposed for other pollutants on the FE label is based on the Tier 2
bin structure, we are proposing that vehicles imported by ICIs that
are not subject to the Tier 2 standards will automatically be rated
as a ``1'' (i.e., the rating assigned to vehicles with the worst
emissions under the Tier 2 bin structure).

                           Table II.A.5-2--Proposed Rating System for Other Emissions
----------------------------------------------------------------------------------------------------------------
                                         EPA Tier 2 emissions    California Air Resources Board LEV II emissions
                Rating                         standard                             standard
----------------------------------------------------------------------------------------------------------------
10...................................  Bin 1..................  ZEV.
9....................................  N/A....................  PZEV.
8....................................  Bin 2..................  SULEV II.
7....................................  Bin 3..................  N/A.
6....................................  Bin 4..................  ULEV II.
5....................................  Bin 5..................  LEV II.
4....................................  Bin 6..................  LEV II opt 1.
3....................................  Bin 7..................  N/A.
2....................................  Bin 8..................  SULEV II large trucks.
1....................................  N/A....................  ULEV & LEV II large trucks.
----------------------------------------------------------------------------------------------------------------

    Because such a rating would be directly reflective of the emissions
standards requirements for air pollutants to which the vehicle is
certified, the agencies believe that it could serve the dual purposes
of performance information and ratings for ``other emissions'' as
required by 49 U.S.C. 32908(g)(1)(A)(i) and (A)(ii). Such an approach
would have the advantage of avoiding requiring detailed information on
the label that would detract from the key elements and could be of
minimal use to the majority of the public. NHTSA and EPA seek comment
on whether also utilizing the rating system to meet the requirement for
performance information on other emissions would be permissible under
EISA.
6. Overall Energy and Environmental Rating
    One of the issues that came up frequently in the focus groups
conducted for this proposal was how to design a label that balanced the
competing interests of completeness and simplicity. It became clear
that different consumers wanted different amounts of information and
levels of detail about fuel economy, GHG emissions, and other
emissions, and how vehicles compare to one another. Many focus group
participants expressed an interest in most or all of the information
that might be offered, until they saw that the label they had
``designed'' would be cluttered and difficult to read; at this point,
many culled their desired information down to a few key elements. Other
participants simply were not interested in much detail. Yet other
participants insisted that they wanted more detail anyway and would not
find labels with more information distracting or confusing.\84\
---------------------------------------------------------------------------

    \84\ Environmental Protection Agency Fuel Economy Label: Phase 1
Focus Groups, EPA420-R-10-903, August 2010, p. 29.
---------------------------------------------------------------------------

    One approach that emerged to condense the level of detail was to
combine rating systems: For example, a rating system that combined fuel
economy and CO2 emissions, or that combined CO2
and other pollutant emissions, or that combined all three. Because they
have different sets of units and different scales, rating systems that
combine different data elements must employ relative or unit-free
scales, such as the letter grade system, rather than absolute
approaches like the separate rating scales discussed above. Using the
bar as an example, if CO2 and other pollutants were combined
into a single bar, a vehicle that falls at one point between the
absolute end points for CO2 emissions may not fall at the
same point between the (different) end points for other emissions,
which would make combining the ratings challenging at best, and
unhelpful at worst. Similarly, while a vehicle may fall at roughly the
same point between ``best'' and ``worst'' absolute values for both fuel
economy and CO2 emissions, differences in scale make
presenting that visually difficult and possibly factually incorrect.
    Thus, if the agencies wanted to try to combine rating systems for
visual simplicity and to appeal to consumers who want labels with less
information, a relative scale--1 to 10, 1 to 5, A+ to D-is needed. The
agencies tested combined relative scales for GHG and other pollutant
emissions fairly extensively in the focus groups, with mixed results.
When environmental ratings were shown in the context of the label, the
preference was for a consolidated environmental rating, with
participants expressing minimal interest in having separate information
on greenhouse gases and other air pollutant emissions; these
participants often stated that the EPA was in a better position to
assess the relative concerns regarding the various environmental
factors than were the participants

themselves.\85\ In contrast, however, when the environmental rating
approaches were shown in isolation, apart from the context of the
entire label, many participants indicated a preference for two separate
ratings, arguing that more complete information holds more value.\86\
---------------------------------------------------------------------------

    \85\ Environmental Protection Agency Fuel Economy Label: Phase 1
Focus Groups, EPA420-R-10-903, August 2010, p. 25.
    \86\ Environmental Protection Agency Fuel Economy Label: Phase 3
Focus Groups, EPA420-R-10-905, August 2010, p. 39.
---------------------------------------------------------------------------

    Congress required in EISA that each new vehicle must be labeled
with a ``rating system that would make it easy for consumers to compare
the fuel economy and greenhouse gases and other emissions of
automobiles at the point of purchase, including a designation of
automobiles with the lowest GHG emissions over the useful life of the
vehicles; and the highest fuel economy* * *'' Thus, for purposes of
meeting the statute, the question is whether a rating that combined two
or all three elements could accurately reflect which vehicle achieves
the lowest GHG and the highest fuel economy. For purposes of meeting
consumers' needs in a label, the question is how to design a label that
is helpful both to the people who want more information and detail and
to the people who want less information and detail. Given the EPCA
requirements for fuel economy and annual cost information, and the EISA
requirements for performance information on fuel economy, greenhouse
gases, and other emissions, the agencies believe that the needs for
more detail-oriented consumers will likely be adequately met.
    In the previous section we discussed an approach to combining fuel
economy and CO2 into one overall rating; in this section the
agencies discuss the additional option of also combining ``other
emissions'' with either CO2 or with a combined fuel economy/
CO2 rating. EPA and NHTSA recognize that there is not a
strong correlation between CO2 and other emissions, due to
sophisticated emission control systems, such as catalytic converters
and exhaust gas recirculation, which target reductions of specific
pollutants but do not also reduce CO2 emissions. In
addition, the agencies are cognizant of the very real challenges
automakers must overcome to achieve the required emissions levels and
do not wish to deprive them of public recognition of advancements in
reducing air pollutants that could come with a separate rating system
for pollutants. Moreover, a separate rating would provide information
for purchasers who value low emission levels and an opportunity to
raise awareness among other consumers of which vehicles produce lower
emissions. And finally, as discussed above, the agencies have
determined that a rating for ``other emissions'' also meets the EISA
requirement of providing vehicle performance information for those
emissions. Combining this rating for ``other emissions'' with ratings
for fuel economy and greenhouse gases would potentially be at odds with
this requirement. For these reasons, the agencies propose that the
rating for ``other emissions'' be separate from the rating(s) for fuel
economy and greenhouse gases.
    Nevertheless, while some focus group participants wanted more
information, most clearly wanted less and suggested that they would
glean little additional value from a label with separate ratings. The
agencies seek comment on whether it would be more useful to provide a
single rating that captures all three elements: fuel economy,
greenhouse gases, and other emissions. As a matter of technical
appropriateness, although there is not a strong correlation between
emissions of CO2 and emission of other pollutants, there is
some correlation. The vehicles with the lowest fuel economy levels and
highest CO2 emissions do not typically meet the cleaner
emission bins; conversely, those with high fuel economy and low
CO2 emissions are rarely, if ever, certified to the higher
emission bins.
    Including other emissions in the rating system to form one rating
would simplify for the consumer the overall energy and environmental
impact of using the vehicle, thus reducing their need to weigh the
relative importance of the various elements. It also allows the label
to be less cluttered and more streamlined.
    Therefore, it is possible and perhaps reasonable to combine ``other
emissions'' with the fuel economy/CO2 letter grade approach.
Under this approach, the rating for fuel economy and greenhouse gases
applicable to a vehicle would be adjusted upward or downward, based on
the Federal emissions bin (or California standard) to which the vehicle
is certified. That is, vehicles that are certified to the cleanest bins
would have their rating increased--for example, under a letter grade
system, a Bin 2 vehicle otherwise eligible for a B+ would have their
rating increased to an A-. Table II.A.6-1 illustrates how such a system
could work.

             Table II.A.6-1--Potential Comprehensive Rating
------------------------------------------------------------------------
                                   Overall energy and environment rating
   Fuel economy/greenhouse gas   ---------------------------------------
             rating                                           Bin  6, 7,
                                  Bin  1, 2, 3   Bin  4, 5        8
------------------------------------------------------------------------
A+..............................  A+            A+           A
A...............................  A+            A            A-
A-..............................  A             A-           B+
B+..............................  A-            B+           B
B...............................  B+            B            B-
B-..............................  B             B-           C+
C+..............................  B-            C+           C
C...............................  C+            C            C-
C-..............................  C             C-           D+
D+..............................  C-            D+           D
D...............................  D+            D            D-
------------------------------------------------------------------------

7. Indicating Highest Fuel Economy/Lowest Greenhouse Vehicles
    In addition to ratings indicating relative emissions performance,
EISA also requires the rating system to include ``a designation of
automobiles with the lowest greenhouse gas emissions over the useful
life of the vehicles; and the highest fuel economy.''
    Depending on the rating system(s) selected, differing approaches
may be needed to achieve this requirement. For example, if the fuel
economy and greenhouse gas ratings are provided separately, such as
with the absolute bars shown on labels 1 and 2, consumers would be able
to easily identify the highest fuel economy and lowest greenhouse gas
emitting vehicles by looking for those that have the highest absolute
values. If fuel economy and greenhouse gases are combined into one
rating, such as with the letter grade system, but are provided
separately from other emissions, again consumers should be able to
easily identify the highest fuel economy/lowest GHG vehicles by looking
for those that achieve the best rating category. However, this will
likely encompass more models than would be designated ``best'' under an
absolute rating system, which may or may not have been the intent of
EISA. In that instance, the rating system itself meets the requirement
for designation of lowest GHG automobiles, defined in that case as the
group of vehicles that achieve the best rating category.
    If, on the other hand, fuel economy and greenhouse gases are
combined with other emissions into a comprehensive rating, and no other
information on the label indicates the highest fuel economy/lowest GHG
vehicles, then the rating system would need to be adjusted in order to
ensure that EISA requirements were met. The agencies seek comment on
whether

separate ratings should be provided for other emissions or whether a
single combined rating for fuel economy, GHG and other emissions should
be provided.
8. SmartWay Logo
    EPA and NHTSA additionally seek comment on utilizing the SmartWay
logo as an indicator of a high level of overall environmental
performance. The SmartWay logo appears as follows:
[GRAPHIC] [TIFF OMITTED] TP23SE10.005

    The SmartWay logo could be added to the label as a way of
highlighting the top environmental performers each model year. This
approach is contemplated for labels 2 and 3.
    The trademarked SmartWay designation was launched in 2005 on the
EPA's Green Vehicle Guide Web site (http://www.epa.gov/greenvehicle) to
provide consumers with a quick and easy way to determine which vehicles
were the cleanest and most fuel efficient for each model year. It has
been awarded to those vehicle models that achieve certain thresholds on
the Greenhouse Gas score (which is tied to the vehicle's fuel economy
and fuel type) and the Air Pollution score (which is tied to the Tier 2
bins or California standards, as applicable). Historically, the
SmartWay thresholds determined by EPA have been targeted to
approximately the top 20% of vehicle models each model year, and have
been tightened over time as the fleet has become cleaner and more fuel
efficient.
    The SmartWay logo for light duty vehicles is currently being used
on a voluntary basis by auto manufacturers, vehicle-search web sites,
rental car companies, banks/credits unions (green vehicle loan
programs), and private companies (light duty commercial fleets and
employee incentive programs). The SmartWay logo was included on labels
shown to focus group participants for this rulemaking. Although
participants did not recognize the logo, most readily understood that
they could use it when shopping for vehicles to quickly identify those
that were environmentally friendly, without having to review the rest
of the environmental information on the label.\87\
---------------------------------------------------------------------------

    \87\ Environmental Protection Agency Fuel Economy Label: Phase 3
Focus Groups, EPA420-R-10-905, August 2010, p. 41.
---------------------------------------------------------------------------

    Because focus groups have indicated that some consumers prefer more
detailed information while others prefer a simpler presentation, the
agencies are seeking comment on whether to require or optionally allow
the SmartWay logo on the label for applicable vehicles. This logo would
indicate in a binary fashion, similar to other eco-labels, whether \ a
vehicle meets certain environmental and energy use thresholds.
Specifically, the agencies seek comment on whether including the
SmartWay logo would be helpful to consumers on a label that already
addresses fuel economy, GHGs, and other emissions in other formats.
9. Annual Fuel Cost
    EPCA requires the estimated annual fuel cost be displayed on the
fuel economy label.\88\ Prior to 2008, the label simply displayed the
estimated annual cost with no explanatory information. EPA's consumer
research in 2006 found that consumers paid little attention to this
metric, and the reason most frequently stated was that the assumptions
behind the estimate (annual miles and fuel price) were unknown to
them.\89\ As a result, the 2008 label modifications included a
requirement that these assumptions be placed on the label.\90\ EPA
publishes annual guidance directing manufacturers what fuel price to
use for determining annual cost--based on projections made by the
Department of Energy \91\--so that all vehicles in a given model year
use the same assumptions. The estimated annual fuel cost can therefore
be used to compare across vehicles of the same model year. As an
example, the estimated annual fuel cost to be used for labels on model
year 2008 gasoline-fueled vehicles is $2.80.
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    \88\ 49 U.S.C. 32908(b)(1)(B).
    \89\ PRR, Inc., EPA Fuel Economy Label Focus Groups: Report of
Findings, prepared for U.S. Environmental Protection Agency, March
2005.
    \90\ 40 CFR 600.307-08.
    \91\ The Department of Energy's Energy Information
Administration publishes gasoline and diesel fuel price forecasts at
least annually in its Annual Energy Outlook, available at http://
www.eia.doe.gov/oiaf/aeo/index.html.
---------------------------------------------------------------------------

    Despite the addition to the label of the assumptions behind the
annual fuel cost starting in 2008, the early focus groups conducted in
2010 showed that many participants still did not pay much attention to
the estimated annual fuel cost metric. Participants often stated that
this was because fuel prices fluctuate and, therefore, they did not
think that the fuel price assumption stated on the label reflected what
they were actually paying. Less frequently, participants additionally
said that the fact that they did not drive 15,000 miles a year made the
estimated annual cost not meaningful to them. Participants remained
skeptical of the use of estimated annual fuel cost even when asked to
consider whether it could be a useful comparative metric across other
vehicles of the same model year. In retrospect, it is possible that
providing this information on the label about the assumptions behind
the annual fuel cost number resolved one issue and caused others, in
that now there are two more numbers for the consumer to process and
question. There is also the possibility that consumers are not aware
that the two assumptions are used universally across all vehicles,
which would call into question the usefulness of the metric as a
comparative tool at the point of purchase (for example, if they believe
that the manufacturers individually determine the inputs to the
estimated annual fuel cost). However, participants in the Phase 3 focus
groups leading up to this NPRM consistently employed the annual fuel
cost information (along with MPG) when asked to compare the fuel
efficiency of advanced technology vehicles like PHEVs and EVs with
conventional vehicles, with their more complicated set of energy
metrics.\92\
---------------------------------------------------------------------------

    \92\ Environmental Protection Agency Fuel Economy Label: Phase 3
Focus Groups, EPA420-R-10-905, August 2010, p.37.
---------------------------------------------------------------------------

    Recognizing the EPCA statutory requirement to continue to display
the estimated annual fuel cost, EPA requests comment on how to improve
consumers' understanding of the estimated annual fuel cost, whether it
is a useful comparative tool across technologies, and if so, how to
best communicate on the label that it is a valid comparative tool. EPA
also requests comment on whether there might be an additional way to
display fuel cost information--or a better way of displaying the
required information--that might be more useful or might have a greater
impact on consumers. In the 2010 focus groups, some groups were
presented with a number of different ways of displaying fuel costs on
the label, ranging in magnitude from dollars per mile to dollars per
five years.\93\ A fairly clear preference emerged for dollars per year,
with dollars per month a frequent second choice.\94\ EPA is thus
proposing labels that continue to prominently display the estimated
annual fuel cost and the associated assumptions. EPA is requesting
comment on whether the label should include the estimated monthly fuel
cost, or other alternative cost information. Commenters should bear in
mind the statutory requirement that estimated annual fuel cost be on
the label; thus

any other cost would have to be an additional piece of information.
---------------------------------------------------------------------------

    \93\ Environmental Protection Agency Fuel Economy Label: Phase 1
Focus Groups, EPA420-R-10-903, August 2010, p. 19.
    \94\ Environmental Protection Agency Fuel Economy Label: Phase 1
Focus Groups, EPA420-R-10-903, August 2010, p. 19.
---------------------------------------------------------------------------

10. Relative Fuel Savings or Cost
    The expert panel recommended another approach to presenting fuel
cost information--to focus on the savings attainable by purchasing a
more fuel efficient vehicle. These panelists felt strongly that savings
is a much more powerful message than cost, which tends to be
discounted, as just discussed. Although savings calculations would
necessarily also rely on assumptions, they suggested that the value of
savings to the consumer is significant enough to overcome these
drawbacks, at least for a substantial portion of the population. NHTSA
and EPA therefore propose including a five-year savings value on Label
1. No such value is proposed for Labels 2 or 3, although the agencies
could also require savings information on these labels, if one of them
were finalized.
    The agencies explored a number of methods for calculating savings.
The most promising approach seems to be savings compared to the
projected median vehicle for that model year, and the agencies propose
this method. Thus, some vehicles would show a savings, while others
would show consumers paying more for fuel over five years compared to a
reference vehicle; these values would increase in magnitude the further
the vehicle is in terms of fuel consumption from the reference value.
This approach appropriately reflects that fuel cost savings become
larger the more a vehicle improves their fuel economy, and conversely
that vehicles cost more to fuel when fuel efficiency is decreased when
compared to the reference, median, vehicle.
    As with the fuel economy and greenhouse gas rating system and
comparable class information, the EPA would provide annual guidance
indicating the value to be used as the reference against which the fuel
cost savings would be measured. The reference five-year fuel cost would
be calculated by applying the gasoline fuel price to the average miles
driven over the first five years of the reference vehicle's life,
assuming a particular fuel economy for the reference vehicle; these
values would be provided in the annual guidance. We propose that the
fuel economy value for the reference vehicle be based on the projected
fuel economy value of the median vehicle model type for sale the
previous model year, not sales-weighted, and adjusted based on
projections regarding the upcoming model year. This value is expected
to change slightly from one year to the next as the fleet becomes more
fuel efficient in response to regulations and market forces. The
guidance would also include the fuel prices to be used to calculate
fuel cost savings for the particular vehicle, based on its applicable
fuel type. Finally, we propose to round the fuel cost savings values
used on the label to the nearest one hundred dollars to avoid implying
more precision than is warranted, as well as for ease of recall.
    As previously stated, vehicles with a higher fuel economy than the
median vehicle would be designated as saving the consumer a certain
number of dollars over a five year period. For those vehicles with fuel
economy lower than the median vehicle, the label would state that the
consumer would spend a certain number of dollars more over a five year
period. Vehicles that are within fifty dollars of the reference vehicle
fuel cost could be designated as saving zero dollars. Alternatively,
text could indicate that this vehicle is comparable to the average
vehicle. Although the agencies recognize that ``median'' is a more
accurate term than ``average,'' we propose the use of the term
`average'' as being more readily understandable.
    Other methods considered include savings compared to the average
vehicle one grade lower, and fuel cost savings compared to vehicles 10
MPG lower. These approaches had certain positive aspects, particularly
in that they demonstrated the value of incremental improvements in
vehicle choice. In the main, however, they provided values that seemed
to be difficult to interpret and could perhaps cause perverse effects.
For example, a vehicle at the high end of their grade or rating would
have a higher savings value than a vehicle at the low end of their
grade or rating. This might be valuable for those who are considering
vehicles within the same grade. However, for those shoppers who glanced
at the number quickly, they might erroneously conclude that, for
instance, a vehicle at the low end of the B- grade would save less on
fuel costs than a vehicle at the high end of the D+ grade. The agencies
seek comment on this and alternative approaches, as opposed to the
proposed approach of displaying a vehicle's fuel cost savings relative
to the median vehicle in the fleet. The agencies are also seeking
comment on whether there is a potential for consumer confusion caused
by two different cost values displayed on Label 1 with regard to the
estimated annual fuel cost of operating the vehicle and the 5 year fuel
cost savings number compared to the average vehicle. We are interested
in receiving comments on how consumers may perceive these values as
interacting with each other and we intend to explore this issue further
prior to finalizing this proposal, including exploring research
conducted in executive branch agencies.
11. Range of Fuel Economy of Comparable Vehicles
    EPCA requires that the label contain ``the range of fuel economy of
comparable automobiles of all manufacturers,'' a requirement that the
label addressed somewhat awkwardly for many years.\95\ As a result of
EPA's 2006 labeling rule, the labels now use a graphical element to
show the performance of the labeled vehicle relative to the best and
worst within that vehicle class.\96\ In the 2010 focus groups, it
became clear that this information, though more prominently displayed
on today's fuel economy label than in previous iterations of the label,
continued to be under-utilized by consumers as a tool to assist them in
making vehicle purchase decisions.
---------------------------------------------------------------------------

    \95\ 49 U.S.C. 32908(b)(1)(C).
    \96\ 40 CFR 600.307-08. A discussion of the comparable class
categories and a proposed change to those categories can be found in
section VI.B.
---------------------------------------------------------------------------

    EPA is now proposing two possible ways of meeting this statutory
requirement. Given the likelihood of more information on the label, a
graphic as used on the current label that repeats the combined fuel
economy number may overly complicate the new label. Thus one option
being proposed is simply a text statement that would read ``Combined
fuel economy for [insert vehicle class] ranges from XX to XX.'' This
approach is used on Labels 1 and 3. The other option EPA is proposing
is essentially an updated version of the current graphical
representation, which combines the fuel economy rating across all
vehicles with the within-class information into one graphical element,
as shown in Section III as part of Label 2.
    The agencies believe that one of these approaches could be used to
satisfy the statutory requirements in 49 U.S.C. 32908(b)(1)(C) (``the
range of fuel economy of comparable automobiles''). As an alternative,
EPA seeks comment on whether the requirement to indicate fuel economy
of comparable vehicles is met by the overall fuel economy rating
required by 49 U.S.C. 32908(g)(1)(A)(ii) (``a rating system that would
make it easy to compare the fuel economy * * * of automobiles''), given
that consumers tend to consider vehicles from several classes during
their purchase process.
12. Other Label Text
    EPA is proposing some minor changes and an addition to the text on
the label

not previously discussed, and seeks comment on each of these text
changes.
    First, each of the proposed labels has information that indicates
the fuel on which the vehicle operates. The agencies believe it will
become increasingly important, as different technologies emerge, to
display clearly the kind of vehicle a consumer is viewing. For dual
fuel vehicles (e.g., current gasoline/ethanol vehicles), EPA is
required by statute to identify the vehicle as a dual fuel vehicle and
to identify the fuels that the vehicle operates on.\97\ In the case of
current flexible-fuel vehicles, for example, this text would read
``Dual Fuel: Gasoline-Ethanol (E85),'' and for plug-in hybrid vehicles
arriving soon on the market this text would read ``Dual Fuel: Gasoline-
Electricity.'' In addition, we are proposing the use of various icons
on the label to distinguish between different technologies and between
different operating modes. These icons include stylized electric plugs,
fuel pumps, and fuel dispensing nozzles.
---------------------------------------------------------------------------

    \97\ 49 U.S.C. 32908(b)(3).
---------------------------------------------------------------------------

    Second, because of the expanded information on the label and DOT
requirements under EISA, EPA is proposing to change the label heading
from the current text (``EPA Fuel Economy Estimates'') to ``EPA/DOT
Fuel Economy & Environmental Comparisons.'' We also propose adding the
DOT logo to the label, to provide appropriate recognition of DOT's role
mandated by EISA.
    Third, EPA is proposing to change the Fuel Economy Guide statement
found on the label to reflect the expanding features that comprise
http://www.fueleconomy.gov, with the hope that this Web site will
become the first Internet stop for a vehicle's fuel economy and
environmental information. The proposed text would read: ``Visit http:/
/www.fueleconomy.gov to calculate estimates personalized for your
driving, and to download the Fuel economy Guide (also available at
dealers).''
    EPCA requires EPA and the Department of Energy (DOE) to prepare and
distribute to dealers a fuel economy booklet, commonly known as the
annual ``Fuel Economy Guide,'' containing information that is ``simple
and readily understandable.'' \98\ EPCA requires that the guide include
fuel economy and estimated annual fuel costs of operating automobiles
manufactured in each model year, as well as some additional information
for dual fueled automobiles (such as the fuel economy and driving range
on both fuels). Further, EPCA requires that a statement appear on the
fuel economy label that this booklet is available from dealers.\99\
Starting in the 2008 model year, the statement on the label was
broadened to include a reference to http://www.fueleconomy.gov as
another source for the Fuel Economy Guide; this Web site is based on
the EPA fuel economy information and jointly run by EPA and DOE. Thus
the current text now reads: ``See the FREE Fuel Economy Guide at
dealers or http://www.fueleconomy.gov.''
---------------------------------------------------------------------------

    \98\ 49 U.S.C. 32908(c)(1)(A).
    \99\ 49 U.S.C. 32908(b)(1)(D).
---------------------------------------------------------------------------

    Both the U.S. Department of Energy's Office of Energy Efficiency
and Renewable Energy and the EPA currently maintain http://
www.fueleconomy.gov. The site helps fulfill DOE and EPA's
responsibility under EPCA of 1992 to provide accurate MPG information
to consumers. The site provides fuel economy estimates, energy and
environmental impact ratings, fuel-saving tips, as well as a
downloadable version of the fuel economy guide and other useful
information. Since its inception in 1999 this Web site has been used by
millions of consumers, and the latest data from 2008 indicates that
more that 30 million user sessions occurred in that year.
    Because of the extensive amount of information and user features
available on the Web site beyond simply providing electronic access to
the Fuel Economy Guide, the agencies wish to direct consumers to this
Web site when they are researching their vehicle purchases. For
example, the Web site allows a user to personalize their fuel economy
information by inputting their specific driving habits and fuel prices.
This ability will be even more important for understanding the impacts
of driving distance and battery charging habits on the fuel consumption
of vehicles like plug-in hybrid electric vehicles, and EPA expects to
work with DOE to develop a Web-based system to allow users to customize
the fuel economy estimates for these advanced technology vehicles.
Further, information that some consumers may want but that is not
available on the label is likely to be available on the Web site. For
example, in the 2010 focus groups some participants expressed an
interest in knowing the cost to fill the tank, or the volume of the
fuel tank, or how many miles could be driven on a tank. The Web site
provides all this information, and information such as the miles per
tank can be personalized to reflect a person's relative amount of city
and highway driving. Finally, the Web site also has developed a version
tailored to mobile devices.
    During the expert panel, EPA provided the panelists with a copy of
the current Fuel Economy Guide. The panelists all expressed concerns
that the public probably didn't know it was available, didn't access it
at the dealer showrooms if they did know it was available, and would
not respond well to it in its current format. They recommended a simple
one-sheet ``guide'' that dealers would distribute in the form of a
checklist, that would allow EPA to deliver the top ten points on fuel
economy that could not (and should not) be included on the label. It
also would ensure that even if individuals did not utilize the Web
site, they would receive this information. It was also suggested that
if possible, distribution of this document be mandatory.
    EPA requests comments on the usefulness of the Fuel Economy Guide
in its current form and also requests comments on whether EPA and DOE
should develop a different approach in the future to the Fuel Economy
Guide--including the idea of transforming the guide into a consumer
friendly ``checklist'' guide. While EPA recognizes that it does not
have the authority to mandate distribution of this guide by dealers we
also request comments on how we could better encourage and work with
dealers to more prominently display and distribute the fuel economy
guide in the future.
    The expert panel also strongly recommended that the new fuel
economy label prominently display an easy to remember URL. Panelists
suggested that not only should such a URL be easy to remember, it
should also provide a consistent platform for educational messages that
would be highly visible for consumers and serve as a portal for web
users to engage each other on fuel economy issues, including exchanging
helpful tips and tools. Panelists indicated that this type of URL and
message platform is of critical importance in today's marketplace and
that EPA should make better use of the label to engage the public in
this manner. Finally, the panelists recommended this new URL not be a
`.gov' Web site, which they suggested is generally perceived as static
and uninviting by consumers that are increasingly reliant on highly
interactive social media networks and tools. Label 1 series found in
Section III currently displays how this URL concept might be
incorporated in Label 1. We note that President Obama has an initiative
on transparency and open

government,\100\ and as part of this initiative, the Executive Branch
has already made some significant improvements to its Web sites.
---------------------------------------------------------------------------

    \100\ See Presidential Memorandum on Transparency and Open
Government, available at http://www.whitehouse.gov/the_press_
office/Transparency_and_Open_Government/ (last accessed July 20,
2010); see also Open Government Directive from OMB, available at
http://www.whitehouse.gov/omb/assets/memoranda_2010/m10-06.pdf
(last accessed July 20, 2010).
---------------------------------------------------------------------------

    The agencies request comment on the new URL concept displayed on
Label 1, along with the underlying approach recommended by the expert
panel: That the agencies create and display a prominent URL on the
label that will provide both a visible consumer message and an easy to
remember web portal or gateway to a more interactive consumer Web site.
As envisioned, this Web site would introduce the new label approach,
laying out what is new and unique to this label. It would explain what
the agencies are trying to accomplish with the new design, and detail
the concept of the grading system and underlying scoring method. It
would include applications that consumers can use to personalize their
vehicle buying decisions, based on their own driving habits and needs.
It would also provide information that is not available on the label,
such as the upstream emissions associated with each vehicle choice. It
would also link to the detailed vehicle information and consumer
discussion pages on fueleconomy.gov, capitalizing on the existing
government Web site and further maximizing its consumer friendliness
and usability.
    Finally, for conventional vehicles, EPA is not proposing any
changes to the statement that currently reads ``Your actual mileage
will vary depending on how you drive and maintain your vehicle.''
However, because some advanced technology vehicles are especially
susceptible to certain conditions, such as cold weather, EPA is
considering the addition of some specific qualifications to this
statement for some vehicle technologies, and seeks comment on what
qualifications might be most helpful.
13. Gas Guzzler Tax Information
    EPCA requires that ``Gas Guzzler'' tax information be included on
the fuel economy label.\101\ These taxes are required under the
Internal Revenue Code 26 U.S.C. 4064(c)(1). This part of the Internal
Revenue Code contains the provisions governing the administration of
the Gas Guzzler Tax, and specifically contains the table of applicable
taxes and defines which vehicles are subject to the taxes. The IRS code
specifies that the fuel economy to be used to assess the amount of tax
will be the combined city and highway fuel economy as determined by
using the procedures in place in 1975, or procedures that give
comparable results (similar to EPCA's requirements for determining CAFE
for passenger automobiles). These provisions have been codified in 40
CFR 600.513-08. This proposed rule would not impact these provisions.
---------------------------------------------------------------------------

    \101\ 49 U.S.C. 32908(b)(1)(E).
---------------------------------------------------------------------------

    The current labeling requirements for the Gas Guzzler Tax require
that an affected vehicle have the following statement on the label (the
regulations provide different ways of displaying this depending on the
label; for example, an alternative fuel vehicle label has some
additional information that limits space, thus the template for
labeling such a vehicle accounts for this). In the limited situations
in which this labeling requirement applies, EPA expects to provide
label templates including this information that are consistent with the
label design that is ultimately selected. For example, for Label 1
presented in Section III, one potential option is to place the gas
guzzler information in the position for fuel cost savings. EPA seeks
comment on this approach.

B. Advanced Technology Vehicle Labels

1. Introduction
    In the past, EPA has not devoted much effort to fuel economy label
issues for advanced technology vehicles. There is a simple reason for
this--if EPA defines a conventional vehicle to be that which derives
all of its propulsive energy from a petroleum fuel (or a liquid fuel
blend dominated by petroleum) stored on-board the vehicle, then
conventional vehicles have represented well over 99% of all vehicles
sold since the advent of fuel economy labels in the 1970s. EPA made the
judgment that the very small number of consumers who might have
considered the purchase of an electric or natural gas or other type of
advanced technology vehicle over the last 35 years did not justify a
major investment of government resources to address the more complex
issues associated with advanced technology labels. Rather, EPA
addressed the occasional need for an advanced technology vehicle label
on a case-by-case basis.
    But, this situation is changing and as the market evolves, this
approach is no longer sufficient. For the first time since labels have
been in use (in fact for the first time since the early days of the
automotive industry), it appears increasingly likely that the future
automotive marketplace will offer a much more diverse set of
technological choices to consumers. EPA and NHTSA believe that now is
the time to begin to design labels that are more appropriate for
advanced technology vehicles that we expect to be commercialized in the
next few years. For purposes of this rulemaking, the agencies intend to
focus on two advanced technologies:
     Electric vehicles (EVs) are vehicles that are powered
exclusively by batteries (charged with electricity from the grid) and
electric motors, and which do not have a conventional internal
combustion engine or any other powertrain. Several automakers sold EVs
in the early and mid-1990s,\102\ but the only EV on the U.S. market
today is the luxury Tesla Roadster with annual sales of a few hundred
vehicles. The first more mainstream-priced EV offered for sale in the
U.S. is the Nissan Leaf, for which orders are now being taken and first
deliveries are projected for late this year in selected markets.\103\
In addition, Ford has announced plans for a model year 2012 Ford Focus
EV.\104\
---------------------------------------------------------------------------

    \102\ Ehsani,M., Gao,Y., and Einadi, A. (2010). Modern Electric,
Hybrid Electric and Fuel Cell Vehicles: F Fundamentals, Theory, and
Design. Second Edition. Pp 12-14.
    \103\ ``Nissan's Electric Leaf Set for Production,'' Detroit
News. May 26, 2010, http://detnews.com/article/20100526/AUTO01/
5260357, (last accessed May 26, 2010).
    \104\ Abuelsamid, Sam, ``Detroit 2010: 2012 Focus Electric could
be both sedan and hatch'', green.autoblog.com, Jan. 11, 2010,
available at: http://green.autoblog.com/2010/01/11/detroit-2010-
2012-ford-focus-electric-could-be-both-sedan-and-h. (last accessed
July 12, 2010).
---------------------------------------------------------------------------

     Plug-in hybrid electric vehicles (PHEVs) can be powered in
as many as three different ways: (1) Like an EV, exclusively by
batteries and electric motors, (2) like a conventional hybrid vehicle,
when the vehicle gets all of its propulsive energy from a conventional
internal combustion engine/transmission (usually fueled with gasoline),
though the battery still assists with regenerative braking and engine
buffering, and (3) a combination of both conventional hybrid and
electric operation. PHEVs entail a family of different engineering
approaches, and will continue to evolve as the technology matures. One
distinct type of PHEV is called an extended range electric vehicle
(EREV). An EREV PHEV has a very distinct operational profile: As long
as the battery is above its minimal charge level, the vehicle is
operated exclusively on the electric powertrain, and then when the
battery is at its minimal charge, it operates like a conventional
hybrid getting all of its power from gasoline or other liquid fuel. In
a way, an EREV PHEV can be

considered to be a combination of an EV and a conventional hybrid, with
an emphasis on operating like an EV as much as possible. There have
been no commercial EREV PHEVs sold in the U.S. to date but the first
commercial offering is likely to be the Chevrolet Volt, which is
scheduled to be introduced in late 2010.\105\ A second type of PHEV is
called a ``blended'' PHEV. As long as the battery is charged, it will
operate on a combination of grid electricity and gasoline (while a
blended PHEV might not have any ``guaranteed'' all-electric range, it
is possible that some blended PHEV designs may have some all-electric
range under certain driving conditions), then when the battery is at
its minimal charge, the vehicle gets all of its propulsive energy from
the gasoline fuel and engine (though the battery still assists with
regenerative braking and engine buffering, as with a conventional
hybrid). In this respect, a blended PHEV can be viewed as a combination
of a ``grid-enhanced'' hybrid and a conventional hybrid, but without
the emphasis on using only electricity for shorter trips as with the
EREV PHEV. To the degree that a blended PHEV does have some practical
all-electric range, the boundary between a blended PHEV and an EREV
PHEV begins to blur. There have been no original equipment blended PHEV
offerings in the U.S. to date, but many automakers are developing
prototypes and some aftermarket conversions are available. The first
commercial U.S. blended PHEV may be a Toyota Prius, likely offered as a
2012 model.\106\
---------------------------------------------------------------------------

    \105\ ``Chevy Volt's Rollout to Include New York City,''New York
Times, July 1, 2010, http://wheels.blogs.nytimes.com/2010/07/01/
chevy-volts-initial-rollout-to-include-new-york-city/. (last
accessed July 12, 2010).
    \106\ ``Detroit 2010: Toyota's 2011 plug-in Prius release date
is ``aggressive'' target,'' Green Autoblog, January 14, 2010, http:/
/green.autoblog.com/2010/01/14/detroit-2010-toyotas-2011-plug-in-
prius-release-date-is-aggre. (last accessed July 12, 2010).
---------------------------------------------------------------------------

    Other advanced technology vehicles will also likely be on the
market in the near future--for example, Honda continues to sell a
dedicated compressed natural gas Civic in selected states and several
manufacturers plan to sell fuel cell vehicles (FCVs) in the
future.\107\ In any case, the issues associated with and the decisions
that we make about labels for EVs and PHEVs will go a long way toward
preparing us to address labels from other advanced technologies in the
future. EPA and NHTSA seek comments on whether there are other advanced
technologies that have the potential to achieve mainstream interest in
the near future and for which the agencies should develop labels in a
future rulemaking.
---------------------------------------------------------------------------

    \107\ ``GM Plans Fuel-Cell Vehicle Pilot Program in Hawaii,''
Environmental Leader, Energy & Environmental News for Business, May
12, 2010, http://www.environmentalleader.com/2010/05/12/gm-plans-
fuel-cell-vehicle-pilot-program-in-hawaii/. (last accessed July 12,
2010).
---------------------------------------------------------------------------

    PHEVs and EVs represent a fundamental departure from the powertrain
and fueling infrastructure that has exclusively dominated the U.S.
market for the last century--a single powertrain (an internal
combustion engine with a mechanical transmission) and a single fuel
(gasoline) available at public service stations. While PHEVs retain
this option, they also offer the consumer the option to charge the on-
board battery from the electric grid at home and to propel the vehicle
exclusively or partially by the battery and electric motor. An EV must
be operated this way. These fundamentally different powertrains and
refueling approaches raise many challenging issues from a consumer
information standpoint that may affect how the agencies decide to
require these vehicles to be labeled.
     These technologies are still evolving. EPA has been able
to test only a small number of these advanced technology vehicles, and
it is unclear whether the vehicles that we have tested are a good
reflection of the technologies that will ultimately be offered in the
market.
     Gasoline and electricity are very different automotive
fuels. Gasoline is a liquid fuel with a high energy density that is
stored on-board the vehicle in a relatively simple and lightweight tank
that can be filled in a few minutes, while electricity is generated by
chemical reactions inside a much lower energy density (and therefore
heavier) battery pack and which can take many hours to recharge.
Gasoline is produced very efficiently from crude oil, but is a less
efficient vehicle fuel, while electricity is less efficient to produce
from a wide variety of resources (such as coal, nuclear, natural gas,
hydropower, and wind), but is a more efficient vehicle fuel.
Approximately 80% of the ``life-cycle'' greenhouse gas emissions from a
gasoline vehicle are emitted directly from the vehicle tailpipe, while
all of the life-cycle greenhouse gas emissions associated with an
electric vehicle are ``upstream'' of the vehicle. As just one simple
example, miles per gallon, the core metric that has been used on
gasoline labels for the last 35 years, is a much more complicated
metric for a fuel like electricity which is not measured in gallons.
     Some advanced technologies can operate on more than one
fuel, either simultaneously (e.g., the use of gasoline and electricity
in the charge depleting mode of a blended PHEV) or at different times
(e.g., an EREV PHEV uses electricity in charge depleting mode, then
gasoline in hybrid mode). By itself, this suggests that a consumer
label for a vehicle that operates on two fuels might have to have
approximately twice as much information as a label for a vehicle that
operates on a single fuel.
     Consumer behavior can have a much larger impact on the
operation of an advanced technology vehicle, relative to that of a
conventional vehicle. Whether the owner of a PHEV charges the battery
every night and how many miles per day they drive--neither of which
affects average energy consumption for a conventional vehicle--can have
a dramatic impact on energy and environmental performance. Again using
the standard miles per gallon of gasoline metric as an example, one
EREV PHEV design may vary from 35 or 40 MPG on the low end (when the
battery is empty and the vehicle is in hybrid mode) to essentially
``infinite'' MPG-gasoline if the vehicle is operated only off the
battery pack. This fuel economy variability is much greater than with
conventional vehicles, where MPG values for most individual vehicles
are typically within 15-20% of the average value.
     Consumers have no practical experience with these new
technologies, or in some cases might not even understand the basics of
how the technologies work. While EPA has sponsored focus groups to
gauge what consumers want on advanced technology labels, there can be
little question that consumers are in a stronger position to provide
meaningful input on conventional labels, with which they have decades
of experience, than on advanced technology labels, where they may not
now know what they will want and need to know in the future to make
informed purchase decisions.
    All of these factors suggest that there is the likelihood of
significant consumer confusion when multiple advanced technology
vehicles begin to compete in the marketplace. We have no illusions that
our advanced technology labels will completely resolve this consumer
confusion, but we do hope they will help to reduce the confusion. We
are certain that advanced technology labels will be more complicated
than conventional vehicle labels. Just as EPA has repeatedly refined
the much simpler conventional vehicle labels over time, the agencies
expect to do so with

advanced technology vehicle labels as well. Accordingly, while EPA and
NHTSA are co-proposing two specific labels for EVs and PHEVs, the
agencies also seek public comment on as many of the key issues as
possible.
    While this section will discuss EVs and EREV PHEVs as well, in many
cases blended PHEVs will be the illustrative technology because they
often raise the most challenging issues due to the fact that two
different fuels can be used simultaneously.
2. EPA Statutory Requirements
a. Electric Vehicles (EVs)
    Electricity is an alternative fuel under the statute and vehicles
fueled only by alternative fuel are ``dedicated automobiles.'' \108\
---------------------------------------------------------------------------

    \108\ 49 U.S.C. 32901(a)(1) and (a)(8).
---------------------------------------------------------------------------

b. Plug-In Hybrid Electric Vehicles (PHEVs)
    Some PHEVs are dual fueled automobiles under 49 U.S.C. 32901(a)(9).
They are capable of operating on a mixture of electricity and gasoline,
provide superior energy efficiency when operating on electricity
compared to operating on gasoline, and provide superior efficiency when
operating on a mixture of electricity and gasoline as when operating on
gasoline.\109\ These vehicles also meet the requirement that a dual
fueled automobile must meet the minimum driving range under 49 U.S.C.
32901(c).\110\ DOT has set the minimum driving range for electric
vehicles at 7.5 miles on its nominal storage capacity of electricity
when operated on the EPA urban test cycle and 10.2 miles on its nominal
storage capacity of electricity when operated on the EPA highway test
cycle.\111\
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    \109\ 49 U.S.C. 32901(a)(9)(A), (B), (C). EPA is extending the
application of the subclause (C).
    \110\ 49 U.S.C. 32901(a)(9)(D).
    \111\ 49 CFR 538.5(b).
---------------------------------------------------------------------------

    The statute contains particular requirements for dual fueled
automobile labels. Section 32908(b)(3) requires that each label (A)
indicate the fuel economy of the automobile when operated on gasoline
or diesel fuel, (B) clearly identify the automobile as a dual fueled
automobile, (C) clearly identify the fuels on which the automobile may
be operated; and (D) contain a statement that additional information
required by the statute is in the fuel economy booklet. The additional
information required in the booklet for dual fuel automobiles is
described in 32908(c)(2) and states that the label will include the
energy efficiency and cost operation of the automobile when operated on
gasoline as compared to when operated on alternative fuel and the
driving range when operated on gasoline as compared to when operated on
alternative fuel. It should also include information on the miles per
gallon achieved when operated on alternative fuel and a statement
explaining how these estimates may change when the automobile is
operated on mixtures of alternative fuel and gasoline.
    For simplicity and consistency, the agencies plan for all PHEV fuel
economy labels to contain the information required for dual fueled
vehicles under the statute, even though only some PHEVs are dual fuel
automobiles. We seek comment on this approach.
    The fuel economy required on the label means the average number of
miles traveled by an automobile for each gallon of gasoline (or
equivalent amount of other fuel) used.\112\ Therefore, in order to meet
the statutory requirement that fuel economy be displayed on the label,
the electricity use for EVs and PHEVs on the fuel economy label is
converted to gallons of gasoline equivalent.
---------------------------------------------------------------------------

    \112\ 49 U.S.C. 32901(a)(11).
---------------------------------------------------------------------------

    EPA recognizes that the statutory requirements in the Energy Policy
and Conservation Act of 1975 were adopted long before advanced
technologies like EREV PHEVs and blended PHEVs were even conceived.
While EPA must meet the statutory requirements, the agencies are
concerned that requiring electricity to be conveyed in MPG equivalent
values might actually make an advanced technology vehicle label less
useful to consumers. The agencies seek public comment on this question
as explained in more detail below.
3. Principles Underlying the Co-Proposed Advanced Technology Vehicle
Labels
    The agencies have found it helpful to identify a few basic
principles to guide our thinking about and development of advanced
technology vehicle labels.
     The advanced technology vehicle labels should provide
objective information that helps consumers make good decisions for both
themselves and the environment. The market research undertaken for this
rulemaking found that the current fuel economy label is a trusted
source of information regarding the fuel economy of today's
conventional gasoline vehicles and the agencies seek to build on this
foundation by ensuring that consumers receive objective, useful and
essential information that helps inform their advanced technology
vehicle purchasing decisions.\113\ The agencies recognize that many of
the most important drivers for the public and private interest in
advanced vehicle technologies are in fact related to energy and
environmental considerations.
---------------------------------------------------------------------------

    \113\ Environmental Protection Agency Fuel Economy Label: Pre-
Focus Groups Online Survey Report, EPA420-R-10-907, August 2010, p.
5.
---------------------------------------------------------------------------

     The advanced technology vehicle labels should aim for the
simplest way to provide fairly complex information. As discussed above
in the introduction to this section and with specific examples later in
this section, the agencies are aware that advanced technology vehicle
labels will inherently be more complex than conventional vehicle
labels. We strive to strike a balance between providing sufficient
information to be helpful and credible (too simple runs the risk of
misinformation with such complex technologies), without trying to ``do
everything'' on the label (which could be a source of confusion for
many consumers). We believe that automakers and respected third-party
organizations (and possibly the federal government via fueleconomy.gov
or other Web sites) will develop sophisticated on-line (and possibly
on-vehicle) calculators that will allow consumers to customize energy,
environmental, and cost information for their unique driving and
battery re-charging habits. We believe that labels should be aimed at
the consumer who wants a quick overview of energy, environmental, and
cost performance, and that those consumers who want detailed,
customized information will look to other sources.
     The advanced technology vehicle labels must be as
equitable as possible across different technologies, both advanced and
conventional. For example, the agencies want to avoid picking a label
design or label metric that inherently favors a certain advanced
technology beyond the energy and environmental merits of the individual
vehicles. There could be considerable consumer confusion when multiple
advanced technology vehicles reach the market, each with their own
marketing strategy, and labels are one way to minimize consumer
confusion. We specifically solicit comments from automakers on whether
we have achieved this goal of equity with our proposed label designs.
     Finally, while labels should provide one or more metrics
to compare across vehicle technologies, both advanced and conventional,
the advanced technology vehicle labels do not have to have the same
precise design as conventional vehicle labels. Given that many of the

label content issues associated with advanced vehicle technologies are
much more complex than for conventional vehicles, it would probably be
impossible for the labels to look the same. On the other hand, we do
want the ``look and feel'' of the advanced technology and conventional
vehicle labels to be as consistent as possible.
    EPA and NHTSA seek public comment on the appropriateness of each of
these principles, and whether there are additional principles that we
should consider.
4. Key Advanced Technology Vehicle Label Issues
    Most of the content on advanced technology vehicle labels will be
similar to that on conventional vehicle labels. This section addresses
those issues that are unique to advanced technology vehicle labels.
a. Upstream Emissions
    This section discusses how the agencies plan to address the issue
of greenhouse gas emissions associated with the use of motor vehicles,
in the context of a program specifically designed to provide consumers
with information that will be useful when purchasing a vehicle. The
agencies' approach takes into account (1) the statutory language, (2)
the fact that the law requires a great deal of information to be
presented on the label, (3) the limited amount of information that can
be provided on a label, (4) the importance of simplicity, clarity,
accuracy, and intelligibility on the label, and (5) the ability to
provide the public with additional and comprehensive information in a
consumer-friendly format on a Web site.\114\ This discussion focuses
on, but is not limited to, the advanced technology vehicles that use
electricity from the grid to power vehicles, such as the electric
vehicles and plug-in hybrids that are expected to enter the market in
larger numbers in the coming years; the discussion also refers to the
use of renewable fuels in gasoline-powered vehicles.
---------------------------------------------------------------------------

    \114\ On the relationship between summary disclosure, as on the
label, and full disclosure, as on the Web site, see http://
www.whitehouse.gov/sites/default/files/omb/assets/inforeg/
disclosure_principles.pdf.
---------------------------------------------------------------------------

    For reasons outlined below, our proposed approach would limit the
label to tailpipe-only emissions while providing much fuller
information on a Web site. But we also identify, and seek comments on,
alternative approaches, designed to accommodate the relevant variables.
    The agencies believe that the proposed approach follows from a
reasonable interpretation of the Energy Policy and Conservation Act
(EPCA), as amended by the Energy Independence and Security Act (EISA)
of 2007. The statute states that NHTSA must require vehicles to be
labeled with information ``reflecting an automobile's performance * * *
[with respect to] greenhouse gas * * * emissions * * * of the
automobile.'' \115\ This information is to be based on criteria
developed by EPA. NHTSA believes that a reasonable interpretation of
this provision is that only GHG emissions directly from the vehicle
itself are required for the label. On that interpretation, the
information on performance and the rating of the vehicles would both be
based on the emissions of the vehicle itself. This interpretation is
also consistent with the history of the EPA labeling program and its
focus on the vehicle itself. NHTSA believes that it would also be
reasonable to interpret the statutory language such that the required
label information on GHG emissions would include additional information
on the upstream GHG emissions associated with electricity or other
fuels used by the vehicle. This additional information could provide a
broader context for reflecting the automobile's performance with
respect to GHG emissions.
---------------------------------------------------------------------------

    \115\ 49 U.S.C. 32908(g)(1)(A)(i). 49 U.S.C. 32908(g)(1)(A)(ii)
also refers to GHG ``emissions of automobiles,'' and further
requires a designation of automobiles ``with the lowest greenhouse
gas emissions over the useful life of the vehicles.''
---------------------------------------------------------------------------

    The agencies recognize that ``lifecycle'' GHG emissions are
associated with the production and distribution of all automotive fuels
used by motor vehicles. Lifecycle GHG emissions are associated with
gasoline, diesel, and other fuels such as natural gas, electricity, and
renewable biofuels. The agencies also recognize that while tailpipe-
only emissions provide important information, a significant number of
consumers may want, or benefit from, access to information on the total
upstream GHG emissions associated with the operation of their vehicles.
For example, electric vehicles do not have any tailpipe emissions since
their motors do not burn fuel, but producing the electricity used to
power such vehicles most likely emits greenhouse gases. Consumers might
seek, or benefit from, a label that allows for simple and accurate
comparisons across vehicles on the total upstream GHG emissions, in
addition to tailpipe emissions. However, the agencies emphasize that
developing the relevant information, and providing it to consumers in a
manner that is accurate and meaningful, raises a number of challenging
issues, particularly in the context of the label.
    A full lifecycle evaluation would include an evaluation of a
comprehensive set of GHG and energy impacts associated with both the
vehicle (extraction and processing of materials, energy used in
assembly, distribution, use, and disposal, etc.), and the fuel
(feedstock extraction, feedstock transport, fuel processing, fuel
transport, etc.). In practice, however, offering even the more limited
accounting for GHG emissions from production and distribution of the
fuel, including electricity, presents complex challenges. EPA currently
does not measure fuel combustion/electricity generation GHG emissions
in its vehicle testing. The agencies recognize that modeling can be
performed to assist in estimating these emissions. But in developing
upstream GHG emissions values, modeling would need to be done carefully
to avoid inaccuracy and consumer confusion, especially in light of
variations across time and across regions. For example, GHG emissions
from electricity generation will vary significantly in the future,
based on the different fuels used at generating stations--perhaps by as
much as an order of magnitude between coal and non-fossil feedstocks.
    It is true that the EPA has undertaken extensive lifecycle modeling
of biofuels for the Renewable Fuel Standard rulemaking in response to
the requirements of the Energy Independence and Security Act. But that
assessment was done in the context of the particular mix of biofuels
required nationally in 2022 by the Act, with a series of assumptions
and estimates that may not be accurate today.
    One overriding issue is whether the agencies could reasonably
provide a single, national value for GHG emissions from electricity
generation or could provide instead different values customized for
various regions of the country.\116\ There are data sources upon which
a single national number could be derived. For individual owners,
however, a single national value would generally not be accurate, and
the individual would need access to additional information, such as
regional values, to evaluate the impact of a specific vehicle.\117\ In
addition, the

agencies would have to decide (1) whether to use average or marginal
(i.e., reflecting the fact that increased vehicle demand might change
the overall mix of electricity sources) GHG emissions factors, and (2)
if the marginal approach is used, whether to assume all nighttime
charging or a mix of daytime and nighttime charging. Another major
consideration is whether to base electricity generation GHG emissions
values on today's electricity markets or on projected changes in
electricity markets that might occur by 2020 or some other year (note
that vehicles produced in the next few years will remain in the fleet
for 15 or 20 years or more).
---------------------------------------------------------------------------

    \116\ See http://www.eia.doe.gov/energyexplained/
index.cfm?page=electricity_in_the_united_states for an overview
of the national U.S. electric power industry net generation by fuel
type.
    \117\ Regional values could be provided on a Web site. EPA has a
Web site (http://www.epa.gov/cleanenergy/energy-and-you/how-
clean.html) on which consumers can enter their zip code and find out
what fuel mix is used to produce the electricity they use.
---------------------------------------------------------------------------

    Some states have already passed legislation that could require
major changes in how electricity is produced in those states in the
future, and Congress has considered landmark legislation as well. It is
clear that the question of how electricity will be produced in the
future is very fluid. As a result of the Energy Independence and
Security Act biofuel mandates, for example, the agencies expect the
amount of biofuel in the transportation fuel market to increase
significantly over time, and the contribution of feedstocks to change
over that time as well. Information that addresses lifecycle emissions
of biofuels would need to take these considerations into account.
    The agencies believe that all of these complex factors can be best
addressed by providing a great deal of relevant information on a Web
site, which can go into considerable detail and be changed and updated
as appropriate. We currently do not have a full lifecycle analysis from
which to draw for labeling purposes across the full range of vehicles
and fuels. The information reported to EPA on emissions from fuel
production varies across fuel types and is much more detailed for
gasoline production. At the present time, it would be difficult to
represent emissions from energy generation on a national label in a way
that is both useful and accurate for consumers, given regional
variations, how generation within regions is dispatched, and access to
green power purchases.
    Therefore, EPA and NHTSA are proposing that the label should limit
itself to tailpipe only emissions (clearly identified as such) and
include a more complete discussion on energy generation and lifecycle
analysis on the webpage. We believe that this approach will prove
sufficiently informative to consumers. It also allows us the
opportunity to provide a fuller discussion of GHG emissions associated
with energy generation for alternative vehicles, as well as emissions
from fuel production (gasoline and biofuels). For example, a Web site
could provide calculator tools that could reflect regional variations
in the GHG emissions associated with electricity generation as well as
use national averages. A Web site could also provide information on the
projected fuel lifecycle impacts associated with biofuels. The Web site
could be updated over time as the mix of electricity fuel sources and
biofuels changes. This approach could help the consumer understand over
the lifetime of their vehicles how their electricity generation
emissions impacts might be changing.
    At this point in time, any effort to provide complete lifecycle
information for fuels on the label could well produce undue confusion.
A label that clearly presents tailpipe emissions appears to be the best
available way to combine accuracy and disclosure, so long as fuller
information is available on the Web site. The agencies believe that
even though many consumers will not visit the Web site, it will be used
by many groups and organizations, and as a result, the information that
it provides will be made available and used in the marketplace. We seek
comment on our current view that the web is the better place, compared
to the label, to address the complex issues associated with emissions
associated with electricity generation and lifecycle emissions more
generally.
    We invite both general and particular comments on the proposed
approach. For example, we encourage commenters to be as specific as
possible with any recommendations on how to address fuel combustion/
electricity generation GHG emissions on the Web site. If information on
these emissions is to be provided on a Web site, exactly what
information? The agencies specifically invite comment on how to address
fuel combustion emissions associated with the electricity used to power
the advanced technology vehicles starting to enter commerce, such as
electric vehicles (EVs) and plug-in hybrid vehicles (PHEVs). The
agencies also invite comment on how to address full GHG emissions from
biofuels on a Web site. Should emissions be identified specifically for
the emissions associated with the combustion of fuel to produce
electricity? Should such emissions be determined on a regional or a
national basis? Should these emissions be provided as a relative
comparison to a gasoline or diesel fuel, the current predominant fuels?
    For the convenience of commenters, we have prepared the table below
as an illustrative example of one simplified way that some lifecycle
emissions information related to electricity production could be
accounted for on a Web site, based on certain assumptions.\118\ It is
important to note that for comparison purposes, the agencies would need
to develop methodologies to compare upstream emissions impacts from all
other fuels as well, including diesel, renewable fuels, and natural
gas. Consistent with the discussion above, it is important to emphasize
that the tailpipe + lifecycle values in the table below are based on
2005 national average electricity GHG emissions, and could be very
different for certain regions of the country today and for the nation
in the future if there are major changes in the mix of methods used to
generate electricity or in the GHG emissions associated with its
generation.
---------------------------------------------------------------------------

    \118\ The key assumptions underlying the illustrative numbers in
the right-hand column are that: EV and PHEVs all assumed to use 200
Watt-hours per mile when operating on electricity over the EPA test
and assuming a 30% range (43% electricity consumption) shortfall
from test to road.
    PHEV 1 assumed to operate on electricity 50% of the time.
    PHEV 2 assumed to operate on electricity 25% of the time.
    Uses 2005 nationwide average value of 0.642 grams of GHG per
Watt-hour at powerplant (adjusted to include GHG emissions from
feedstock extraction, transportation, and processing as well) from
MY2012-2016 light-duty vehicle GHG final rule (75 Federal Register
25437).
    Assumes typical 7% electricity grid transmission losses.
    Uses 2250 grams GHG per gallon of gasoline.

------------------------------------------------------------------------
                                            Proposal--      Tailpipe +
                 Vehicle                   tailpipe-only   upstream CO2/
                                             CO2/mile          mile
------------------------------------------------------------------------
Example EV..............................               0             197
Example PHEV 1..........................              89             210

Example PHEV2...........................             133             217
Toyota Prius HEV........................             178             224
Honda Civic HEV.........................             212             266
Honda Insight HEV.......................             217             273
Ford Fusion HEV.........................             228             287
------------------------------------------------------------------------

    In general, for purposes of providing information on the web, the
agencies invite comment on the appropriate metrics to use and the
specific suggestions for content and format, if appropriate. The
agencies also request comment on which web resources it should
prioritize for development that would provide the most useful
information to consumers.
    The agencies acknowledge that more consumers will look at the label
than at the Web site, and that a ``0'' figure for GHG emissions might
prove confusing to some consumers. While accurate and more complete
information will be provided on the Web site, putting 0 grams CO2/mile
on the label may lead some consumers to perceive that driving their EV
does not contribute to GHG emissions. With respect to the label itself,
the agencies are also requesting comment on alternative options for the
label that, in addition to presenting tailpipe emissions, refer to or
identify in some manner the emissions associated with the lifecycle of
the fuel. Under one version of this alternative that is under serious
consideration, similar to a co-proposal, the EV label would continue to
reflect the ``0'' CO2g/mile number currently displayed on the co-
proposed labels (Figures III-2, III-10), but the label would be
modified by adding either a symbol or an asterisk and explanatory text
which states, ``The only C02 emissions are from electricity
generation.'' Likewise, the agencies would modify the co-proposed PHEV
labels (Figures III-3, III-6, III-1, III-12) inserting either a symbol
or asterisk next to the current CO2g/mile number displayed with the
following explanatory text, ``Does not include CO2 from electricity
generation.''
    This alternative approach might provide more accuracy and clarity
for purchasers by more explicitly indicating that the CO2 emissions
from generation of electricity are not reflected in the CO2 numbers on
the label. Under this alternative, FFV labels (for FFV vehicles only)
would continue to reflect the gasoline only CO2g/mile number currently
displayed on the co-proposed labels (Figures III-8 and III-14), but the
label (for FFVs only) would be modified by adding either a symbol or an
asterisk and explanatory text that might state, ``The CO2 emissions
listed here are from gasoline combustion only. They do not reflect the
use of renewable biofuels.'' The agencies request comment on this
alternative option.
    The agencies are also giving consideration to an approach that in
addition to the tailpipe emissions, includes information on upstream
emissions on the label for the various fuels. For electric vehicles,
for example, GHG emissions are (on an average basis) a function of KwH
per mile, and thus could in principle be calculated, and if a full or
nearly full accounting could be provided in a clear and intelligible
form, there would be advantages to providing it on the label to
consumers, in addition to the tailpipe emissions data. Therefore, the
agencies invite comment on the feasibility and usefulness of an
alternative approach that in addition to identifying tailpipe
emissions, would include a separate value for upstream emissions on the
label as well as on the Web site.
    In particular, the agencies invite comment on what type of
information should be considered as ``upstream,'' and whether a label
including the upstream emissions could be based on national averages.
The agencies might consider making assumptions to develop national
averages.
    Note, however, that agencies would need to make a substantial
number of assumptions to develop such averages. These include
assumptions about the overall impact on electric car recharging on the
grid mix, which would include making assumptions about (1) the time-of-
day distribution of recharging and (2) the subsequent impacts on the
base and peak load electricity generation as well as (3) the nature of
regional variability and (4) potential changes in the electricity
generation fleet. A relevant source for this type of information may be
the Energy Information Administration (EIA), which provides estimates
of the future electricity generation mix, so there may be some basis
for estimating future GHG emissions based on current state and federal
policies; but these estimates will also rest on some uncertain
assumptions. The same type of analysis (national averages for
feedstocks and fuel production) would need to be developed and
equivalent assumptions made related to upstream emissions from gasoline
and diesel production as well as renewable fuels, natural gas, and
hydrogen.
    The agencies invite comments on whether and how the possible
inclusion of upstream emissions information on the label might affect
other elements of the label such as design, format, presentation of the
various ratings and other information as well as the ranking of
vehicles on the label.
    The agencies also recognize that notwithstanding the many
challenges, a potential advantage of including upstream emissions on
the label is that consumers may be able to compare different EVs with
respect to their upstream emissions, as some will require more energy
per mile which would likely result in different upstream emissions
impacts. Consumers may be able to make similar comparisons among EVs,
PHEVs, gasoline and diesel powered vehicles as well as other fueled
vehicles on the basis of upstream emissions. Regardless of what would
be presented on the label, the agencies will continue to provide
detailed information about the lifecycle GHG impacts of different
vehicles on the Web site in a way that may provide a better way for
individuals to take their region, driving habits, and other specific
factors into account in their purchase decisions.
    In view of the many assumptions the agencies would need to make to
include upstream emissions on the label, we emphasize that this
alternative would have to overcome several serious challenges. We ask
for comment on whether and how each of those challenges, outlined
above, could be addressed.
b. Energy Consumption Metrics
    Energy consumption metrics are another issue which becomes more
complicated with advanced technology vehicles. For conventional
gasoline vehicles, the MPG metric has been the foundation of the
consumer label for 35 years. It is not a perfect metric, and some have
expressed concerns about its

``non-linearity,'' e.g., the absolute fuel consumption savings
associated with improving one mile per gallon from 10-11 MPG is over
ten times greater than the fuel consumption savings associated with
improving from 35-36 MPG as discussed above. But, in some respects, MPG
has been a good metric for a consumer information program: Lay people
had used the MPG metric prior to its use on the label, the concept was
simple and understood by almost all consumers, the practical range of
10-50 MPG was accessible to lay people and facilitated simple
calculations that most consumers could perform, etc. The results from
recent EPA focus groups conducted by the agencies were unequivocal--the
MPG values were, by far, the most trusted and useful values on the
label.\119\
---------------------------------------------------------------------------

    \119\ Environmental Protection Agency Fuel Economy Label: Phase
1 Focus Groups, EPA420-R-10-903, August 2010, p. 10.
---------------------------------------------------------------------------

    Unfortunately, while the miles per gallon metric has been very
useful when 99+% of all vehicles operated on petroleum fuels, its
usefulness as a metric is less clear for a future vehicle fuel such as
electricity, which is not measured in gallons, but rather in kilowatt-
hours. Therefore, for an electric vehicle, or for an EREV PHEV when
operated exclusively on grid electricity, there are three broad choices
for a consumption metric, independent of statutory considerations, to
characterize the amount of electricity and all have advantages and
disadvantages:
     Kilowatt-hours. The rationale for kilowatt-hours is that
this is the metric by which electricity is ``counted'' and sold. In
their monthly utility bills, consumers are charged a certain rate (or
price) per kilowatt-hour, and this rate is multiplied by the number of
kilowatt-hours that the consumer uses, to generate the overall monthly
electricity bill. This is analogous to what happens at a gasoline
service station, where a consumer pays a certain rate (or price) per
gallon of gasoline, and this rate is multiplied by the number of
gallons of gasoline that the consumer buys, to generate the overall
gasoline bill. The primary argument against using kilowatt-hours is
that the focus groups conducted by the agencies clearly indicates that
few consumers understand what a kilowatt-hour is, and most of the
consumers who do not know what a kilowatt-hour is say that they do not
want to learn.\120\
---------------------------------------------------------------------------

    \120\ Environmental Protection Agency Fuel Economy Label: Phase
2 Focus Groups, EPA420-R-10-904, August 2010 and Environmental
Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-
R-10-905, August 2010.
---------------------------------------------------------------------------

     Gallons of gasoline-equivalent. From an engineering
perspective, energy can be measured, and different forms of energy can
be compared through the use of energy unit conversion factors. For
example, a gallon of gasoline has the energy equivalent of 33.7
kilowatt-hours, and any value for kilowatt-hours can be converted to an
energy-equivalent value of gallons of gasoline.\121\ For example, a
vehicle that used 33.7 kilowatt-hours would have used an amount of
energy equivalent to 1 gallon of gasoline, while a vehicle that used
twice as much electricity would have used an amount of energy
equivalent to 2 gallons of gasoline. The rationale for using gallons of
gasoline-equivalent is that consumers understand the concept of
``gallons'' much more than they understand any other energy metric. In
the focus groups conducted for this rulemaking, the agencies found that
participants believed they understood the equivalency approach and felt
comfortable with this metric since it closely aligns with the miles per
gallon metric that they have always relied upon.\122\ The primary
argument against using gallons of gasoline-equivalent is that the
concept requires the conversion of one form of energy to another, and
while this reflects a technical measurement of energy equivalency, it
may or may not be useful to the consumer. For example, gasoline and
electricity are very different fuels in many ways: How they are
produced, how consumers buy them and refuel, whether consumer fuel
expenditures stay in the local or regional economy or are exported,
etc.
---------------------------------------------------------------------------

    \121\ 65 FR 36990.
    \122\ Environmental Protection Agency Fuel Economy Label: Phase
2 Focus Groups, EPA420-R-10-904, August 2010, p. 22.
---------------------------------------------------------------------------

     A generic energy unit not directly connected to either
gasoline or electricity, such as British Thermal Units (BTUs) or
joules. The argument here would be to pick an energy metric that is
``fuel neutral.'' The primary arguments against this are both that few
consumers understand such a metric, and that no motor fuels are counted
or sold in such units. While the agencies recognize this as another
conceptual alternative, we have rejected this approach.
    As discussed previously, EPCA requires that electricity use for EVs
and PHEVs on the fuel economy label is converted to gallons of
gasoline-equivalent. But the statute also provides discretion to EPA on
the relative prominence of a gallons of gasoline-equivalent metric and
a kilowatt-hours metric.
    For EV labels, the agencies propose to show electricity consumption
in both metrics: As miles per gallon of gasoline-equivalent (MPGe) and
as kilowatt-hours per 100 miles. The agencies recognize that higher
MPGe values are better, while lower kw-hr/100 miles values are better.
The agencies seek comment on whether this is helpful or confusing to
consumers.
    The most complicated advanced technology vehicle in this regard is
a blended PHEV that is operating simultaneously on gasoline and grid
electricity. There are two options for energy metrics for blended
PHEVs, which are based on the general concepts introduced above.
     Retain separate energy metrics for gasoline and
electricity. The gasoline metric would continue to be miles per gallon
of gasoline (supplemented by a gallons/100 miles consumption value as
well), while the electricity metric would be kilowatt-hours of
electricity (either miles per kilowatt-hour or kilowatt-hours per 100
miles). The advantages of this approach are (1) it includes the values
that EPA measures, (2) the metrics reflect how these forms of energy
are counted and how consumers pay for them, (3) the separate values do
not require judgments about whether consumers ``value'' gasoline and
electricity equally or not, and (4) it would avoid possible confusion
over what a combined miles per gallon of gasoline-equivalent value
means (i.e., some, maybe many, consumers would probably assume that a
miles per gallon of gasoline-equivalent value was equal to a miles per
gallon of gasoline value, which would be inaccurate). The disadvantages
of such an approach are (1) few consumers understand the metric of
kilowatt-hours, (2) dual energy metrics make it extremely difficult to
compare energy efficiency across vehicles, and (3) those consumers who
focus only on miles per gallon of gasoline and ignore kilowatt-hours of
electricity, will believe that a blended PHEV is more energy efficient
than it actually is.
     Combine to a single energy metric of miles per gallon of
gasoline-equivalent. This would require the use of the conversion
factor of 33.7 kilowatt-hours per gallon of gasoline-equivalent value
cited above. The advantages of this approach are (1) it yields a single
value that simplifies the label and facilitates vehicle comparisons,
(2) it avoids the kilowatt-hour metric that consumers do not like or
understand, and (3) some consumers (though not all) said they liked the
concept of miles per gallon of gasoline-equivalent. The disadvantages
of such an approach are

(1) it requires the simplifying assumption that all forms of energy (in
this case, gasoline and electricity) are equally valued, (2) it does
not allow the consumer to see the individual energy consumption values
for gasoline and electricity, and (3) it will yield labels with both
miles per gallon of gasoline and miles per gallon of gasoline-
equivalent, which could be confusing to some consumers.
    The agencies are proposing to use the miles per gallon of gasoline-
equivalent metric only for PHEVs, but seek public comment on the
relative merits of doing so versus using the separate energy metrics.
The agencies believe that both approaches have advantages and
disadvantages. In formulating comments on this topic, commenters could
also consider three additional questions. One, do consumers care
equally about gasoline and electricity, i.e., are they just two
different ways of fueling their vehicles, with a Btu of gasoline
equivalent to a Btu of electricity, or do some or most consumers care
more about one or the other form of energy? Two, how should the
agencies interpret the focus group input in which most participants
indicated that they did not understand kilowatt-hours on their electric
bills and did not want to have this metric included on advanced vehicle
labels? Three, should we view this as an opportunity to educate
consumers about the importance of kilowatt-hours as a fundamental
measurement of electricity consumption?
c. Driving Range Information (Including 5-Cycle Adjustment)
    EPA does not include range information on conventional fuel economy
labels. Petroleum fuels have high energy densities and are stored on-
board the vehicle in relatively cheap and lightweight fuel tanks. The
combination of high driving range values (gasoline vehicles typically
have ranges of 300-500 miles) and the fact that range can be increased
by simply increasing the size of the fuel tank, means that range for
petroleum-fueled vehicles has not been a top consumer priority. In
recognition of the fact that non-petroleum fuels generally have lower
energy densities resulting in reduced driving ranges than petroleum
fuels, the Federal Trade Commission (FTC) requires a label that lists
the ``manufacturer's estimated cruising range'' for alternative-fueled
vehicles.\123\
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    \123\ 16 CFR part 309.
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    The primary issue addressed in this section is whether range should
be included on advanced technology vehicle labels. For an EV, the
primary range parameter of interest would be the miles that can be
traveled between battery charges. For an EREV PHEV, the most important
range parameter would be the miles that can be traveled in all-electric
mode. For a blended PHEV, the primary range parameter would be the
number of miles over which the battery is providing assistance in the
form of grid electricity, but it is also possible that there could be
some guaranteed or likely all-electric range as well.
    The primary arguments for including range include (1) focus groups
strongly supported including the range for EVs and PHEVs,\124\ (2)
range is a critical factor for what the consumer gets for his or her
investment in a more expensive EV or PHEV, and is obviously a core
utility attribute for an EV and a primary determinant of the overall
environmental and energy performance of a PHEV, and (3) EPA can easily
measure range.
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    \124\ Environmental Protection Agency Fuel Economy Label: Phase
2 Focus Groups, EPA420-R-10-904, August 2010, pp. 17, 28, and 38.
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    The arguments against including range include (1) it is not a
direct measurement of energy or environmental performance (in fact, for
an EV, other things being equal, a higher range means a larger battery
pack, a heavier vehicle, and therefore higher energy consumption,
relative to the same vehicle with a lower range and smaller battery
pack), (2) there will likely be much greater variability in EV range
than we have faced with gasoline fuel economy in the past, so there are
greater challenges involved in defining a specific range estimate, and
(3) adding range would add to an already busy label.
    The agencies are proposing to include range information on
alternative technology vehicle labels and seek public comment on this
issue.
    A related issue is how EPA will determine the appropriate
adjustment factor to use in converting 2-cycle test values for range to
5-cycle test values for vehicle labels. Under current EPA regulations
established by the 2006 fuel economy label rulemaking, automakers would
have two choices: (1) Submitting 5-cycle test data, and (2) using the
MPG-based (derived 5-cycle) equations.\125\ Using the MPG-based
equations for EVs would yield an approximate 40 percent downward
adjustment for EV range.\126\ EPA notes that there were no EV or PHEV
data in the database used to generate the MPG-based equations, and that
the downward adjustment appropriate for EVs (which have low direct
vehicle energy consumption levels) is the result of extrapolating the
results of the conventional vehicle data that was used to generate the
equations.
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    \125\ 71 FR77887-77888, Dec 27, 2006.
    \126\ See 40 CFR 600.210-08. Using the equations in these
regulations to adjust 2-cycle test values for extremely high MPG
vehicles (or MPGe for EVs) will result in adjustments approaching 40
percent. Because the data used to determine these equations did not
include any such vehicles, EPA is uncertain as to the applicability
of the formulae to EVs and other extremely high MPG vehicles.
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    EPA proposes a new set of options for automakers to choose for
purposes of identifying the appropriate 5-cycle range adjustment for
EVs and the electric portion of PHEV operation. One, automakers could
provide full 5-cycle test data, which is one option under current EPA
regulations. Two, automakers could provide vehicle-specific real world
range data collected from in-use vehicles. Three, automakers could use
the MPG-based equations discussed above, but with the downward
adjustment capped at the percent reduction represented by the worst-
case gasoline vehicle in the EPA database. The worst-case gasoline
vehicle is the highest-MPG gasoline vehicle, which is currently the
Toyota Prius. Based on the application of the MPG-based equations to
the Prius' MPG values, the Prius would get about a 30% downward
adjustment from its 2-cycle data to its derived 5-cycle value, and this
would therefore be the level that automakers could use for EVs and the
electric operation of PHEVs.
    EPA seeks comment on this proposal for the downward 5-cycle
adjustment for EVs and PHEVs.
d. Battery Charging Time Information
    EPA does not include information on the mechanisms for or time
associated with refueling vehicles on conventional vehicle fuel economy
labels. Refueling with petroleum fuels is a fairly quick and ubiquitous
process, and has not been a topic of consumer concern. Refueling, or
charging, a battery pack will be different in many ways. While gasoline
vehicle refueling typically takes 5-10 minutes, charging a battery pack
can take up to 12 hours or more, depending on the charging hardware.
EPA focus group participants expressed strong interest in including
some type of information on charging time on labels for EVs and
PHEVs.\127\
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    \127\ Environmental Protection Agency Fuel Economy Label: Phase
2 Focus Groups, EPA420-R-10-904, August 2010, pp. 16, 26, and 38.
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    The arguments for including battery charging time information on EV
and PHEV labels include (1) focus groups supported doing so, (2) it is
a core consumer utility parameter (i.e., if the charging time is so
long as to be

onerous, consumers will recharge less frequently and this will have an
effect on the vehicle's energy and environmental performance), and (3)
EPA could develop a test procedure for generating standardized
information.
    An example of a simple approach for measuring EV recharge time
would be to use the method for recharging the battery recommended by
the manufacturer and available to the consumer. Full battery recharge
time could be defined as the time required to charge the vehicle
battery to full capacity from the end of the electric vehicle range
test or ``empty.'' A fully charged battery would be defined as the same
battery state of charge used to determine electric vehicle range. EPA
is also seeking comment on partial recharge time. Partial recharge time
could be measured and expressed as the time of recharge required to
travel a given distance.
    Arguments for excluding battery charging time on EV and PHEV labels
include (1) there is only an indirect relationship between charging
time and energy and environmental performance, (2) EPA does not now
have a test procedure for generating standardized data, (3) it will be
fairly easy for consumers and third parties to verify automaker claims
on this basic question, and (4) adding battery charging time will make
the advanced technology vehicle labels more cluttered.
    The agencies seek comments on whether we should include battery
charging time information on labels for EVs and PHEVs.
e. Merged Vehicle Operating Mode Information for PHEVs
    Conventional vehicles have a single ``operating mode,'' i.e., all
the powertrain components contribute to propel the vehicle at all
times. Some advanced technology vehicles have more than one operating
mode. For example, a blended PHEV could have up to three operating
modes: An all-electric mode where the vehicle is propelled exclusively
by grid electricity via the battery and electric motor, a second mode
where the vehicle is propelled by a combination of both grid
electricity and an internal combustion engine, and a third mode that
uses only the internal combustion engine. For such vehicles, the
agencies propose to provide consumers with basic performance
information about each of the PHEV's individual operating modes. One
advantage of this approach is that it will allow consumers to tailor
the information from the individual operating modes to their own
driving habits, and therefore develop ``customized'' information
relevant to their own situations. One issue is whether the vehicle
label should also provide information that combines the various