remarks.\146\ Further, the agency notes that the article referenced by
UCS also indicates that ``most manufacturers make changes to their
vehicle lines every four years or more, depending on the segment of the
market, with mid-cycle freshenings every two years or so.'' \147\
Although some manufacturers have, in their product plans, indicated
that they plan to redesign some vehicle models more frequently than has
been the industry norm, all manufacturers have also indicated that they
expect to redesign some other vehicle models considerably less
frequently. The CAR report submitted by the Alliance, prepared by the
Center for Automotive Research and EDF, states that ``For a given
vehicle line, the time from conception to first production may span two
and one-half to five years,'' but that ``The time from first production
(``Job 1'') to the last vehicle off the line (``Balance Out'')
may span from four to five years to eight to ten years or more,
depending on the dynamics of the market segment.'' The CAR report then
states that ``At the point of final production of the current vehicle
line, a new model with the same badge and similar characteristics may
be ready to take its place, continuing the cycle, or the old model may
be dropped in favor of a different product.'' \148\
---------------------------------------------------------------------------

    \146\ Zoia, D.E. 2008. Ford to cut cycle times to three years.
Online at http://www.wardsauto.com. January 24.
    \147\ Id.
    \148\ See NHTSA-2008-0089-0170.1, Attachment 16, at 8 (393 of
pdf).
---------------------------------------------------------------------------

    NHTSA believes that this description, which states that a vehicle
model will be redesigned or dropped after 4-10 years, is consistent
with other characterizations of the redesign and freshening process,
and supports its 5-year redesign assumption and its 2-3 year refresh
cycle assumptions.\149\ Thus, for purposes of the final rule, NHTSA is
retaining the 5-year redesign/2-3 year refresh assumptions employed in
the NPRM. However, NHTSA will continue to monitor manufacturing trends
and will reconsider these assumptions in subsequent rulemakings if
warranted.
---------------------------------------------------------------------------

    \149\ See id., at 9 (394 of pdf).
---------------------------------------------------------------------------

    For purposes of the final rule, NHTSA has also considered
confidential product plans where applicable and industry trends on
refresh and redesign timing as discussed above, to apply specific
technologies at redesign, refresh, or any model years as shown in Table
IV-7 below.
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[GRAPHIC] [TIFF OMITTED] TR30MR09.030

BILLING CODE 4910-59-C
    As the table shows, most technologies are applied by the Volpe
model when a specific vehicle is due for a redesign or refresh.
However, for low friction lubricants, the model is not restricted to
applying it during a refresh/redesign year and thus it was made
available for application at any time. Low friction lubricants are very
cost-effective, can apply to multiple vehicle models/platforms and can
be applied across multiple vehicle models/platforms in one year.
Although they can also be applied during a refresh/redesign year, they
are not restricted to that timeframe because their application is not
viewed as necessitating a major engineering redesign and associated
testing/calibration.
    For several technologies estimated in the NPRM to be available for
application during any model year, NHTSA now estimates that these
technologies will be available only at refresh or redesign. Those
technologies include aggressive shift logic, improved accessories, low
rolling resistance tires and low drag

brakes. Aggressive shift logic is now one of the technologies included
under improved automatic transmission controls. This technology
requires a recalibration specific to each vehicle, such that it can
therefore be applied only at refresh or redesign model years. The
``improved accessories'' technology has been redefined to include
intelligent engine cooling systems, which require a considerable change
to the vehicle and engine cooling system; therefore, improved
accessories also can be applied only at refresh or redesign model
years. Also, NHTSA concurs with manufacturers' confidential statements
that indicating that low drag brakes and low rolling resistance tires
can be applied only at refresh or redesign model years due to the need
for vehicle testing and calibration (e.g., to ensure safe handling and
braking) when these technologies are applied.
10. Phase-In Caps
    In 2002, NHTSA proposed the first increases in CAFE standards in
six years due to a previous statutorily-imposed prohibition on setting
new standards. That proposal, for MY 2005-2007 light truck standards,
relied, in part, on a precursor to the current Volpe model. This
earlier model used a ``technology application algorithm'' to estimate
the technologies that manufacturers could apply in order to comply with
new CAFE standards.
    NHTSA received more than 65,000 comments on that proposal. Among
those were many manufacturer comments concerning lead time and the
potential for rapid widespread use of new technologies. The agency
noted that DaimlerChrysler and Ford ``argued that the agency had
underestimated the lead time necessary to incorporate fuel economy
improvements in vehicles, as well as the difficulties of introducing
new technologies across a high volume fleet.'' Specific to Volpe's
technology application algorithm, the agency noted that General Motors
took issue with the algorithm's ``application of technologies to all
truck lines in a single model year.'' \150\
---------------------------------------------------------------------------

    \150\ 68 FR 16874 (Apr. 7, 2003).
---------------------------------------------------------------------------

    In response to those concerns, Volpe's algorithm was modified ``to
recognize that capital costs require employment of technologies for
several years, rather than in a single year.'' \151\ Those changes
moderated the rates at which technologies were estimated to penetrate
manufacturers' fleets in response to the new (MY 2005-MY 2007) CAFE
standards. These changes produced more realistic estimates of the
technologies manufacturers could apply in response to the new
standards, and thereby produced more realistic estimates of the costs
of those standards.
---------------------------------------------------------------------------

    \151\ Id., at 16885.
---------------------------------------------------------------------------

    Prior to the next rulemaking, the Volpe model underwent significant
integration and improvement, including the accommodation of explicit
``phase-in caps'' to constrain the rates at which each technology would
be estimated to penetrate each manufacturer's fleet in response to new
CAFE standards.\152\ As documented in 2006, the agency's final
standards for light trucks sold in MY 2008-MY 2011 were based on phase-
in caps ranging from 17 percent to 25 percent (corresponding to full
penetration of the fleet within 4 to 6 years) for most technologies,
and from 3 percent to 10 percent (full penetration within 10 to 33
years) for more advanced technologies such as hybrid electric
vehicles.\153\ The agency based these rates on consideration of
comments and on the 2002 NAS Committee's findings that ``widespread
penetration of even existing technologies will probably require 4 to 8
years'' and that for emerging technologies ``that require additional
research and development, this time lag can be considerably
longer''.\154\
---------------------------------------------------------------------------

    \152\ These caps constrain the extent to which additional
technology is applied by the model, beyond the levels projected in
each manufacturer's baseline fleet. Also, because manufacturers'
fleets are comprised of vehicles, engines, and transmissions sold in
discrete volumes, phase-in caps cannot be applied as precise limits.
In some cases (when a phase-in cap is small or a manufacturer has a
limited product line), doing so would prevent the technology from
being applied at all. Therefore, the Volpe model enforces each
phase-in cap constraint as soon as it has been exceeded by
application of technologies to manufacturers.
    \153\ 71 FR 17572, 17679 (Apr. 6, 2006).
    \154\ Id. at 17572. See also 2002 NAS Report, at 5.
---------------------------------------------------------------------------

    In its 2008 NPRM proposing new CAFE standards for passenger cars
and light trucks sold during MY 2011-MY 2015, NHTSA considered
manufacturers' planned product offerings and estimates of technology
availability, cost, and effectiveness, as well as broader market
conditions and technology developments. The agency concluded that many
technologies could be deployed more rapidly than it had estimated
during the prior rulemaking.\155\ For most engine technologies, the
agency increased these caps from 17 percent to 20 percent, equivalent
to reducing the estimated time for potential fleet penetration from 6
years to 5 years. For stoichiometric gasoline direct injection (GDI)
engines, the agency increased the phase-in cap from 3 percent to 20
percent, equivalent to estimating that such engines could potentially
penetrate a given manufacturer's fleet in 5 years rather than the
previously-estimated 33 years. However, as in its earlier CAFE
rulemakings, the agency continued to recognize that myriad constraints
prohibit most technologies from being applied across an entire fleet of
vehicles within a year, even if those technologies are available in the
market.
---------------------------------------------------------------------------

    \155\ 73 FR 24387-88 (May 2, 2008).
---------------------------------------------------------------------------

    In addition to requesting further explanation of NHTSA's use of
phase-in caps, commenters addressing phase-in caps generally asserted
one of three themes: (1) That hybrid phase-in caps were much lower than
market trends or manufacturer announcements would otherwise suggest;
(2) that the phase-in caps proposed in the NPRM were too high in the
early years of the rulemaking and did not reflect the very small (from
a manufacturing perspective) amount of lead-time between the final rule
and the MY 2011 standards, and/or were too low in the later years of
the rulemaking given the relatively-increased amount of lead-time for
those model years; (3) that there are insufficient resources (either in
terms of capital or engineering) to implement the number of
technologies implied by the phase-in caps simultaneously.
    Agency response: NHTSA continues to recognize that many factors
constrain the rates at which manufacturers will be able to feasibly add
fuel-saving technologies to the fleets they will sell in the United
States. For a given technology, examples of these factors may include,
but would not be limited to the following:
     Is the technology ready for commercial use? For example,
can it operate safely and reliably under real-world driving conditions
for several years and many miles?
     If the technology requires special infrastructure (e.g.,
new electrical generation and charging facilities), how quickly will
that be put in place?
     How quickly can suppliers ramp up to produce the
technology in mass quantities? For example, how quickly can they obtain
the materials, tooling, and engineering resources they will need?
     Are original equipment manufacturers (OEMs) ready to
integrate the technology into vehicles? For example, how quickly can
they obtain the necessary tooling (e.g., retool factories),
engineering, and financial resources?
     How long will it take to establish failure and warranty
data, and to make sure dealers and maintenance and repair businesses
have any new training and tooling required in order to work with the
new technology?

     Will OEMs be able to reasonably recoup prior investments
for tooling and other capital?
     To what extent are suppliers and OEMs constrained by
preexisting contracts?
    NHTSA cannot explicitly and quantitatively evaluate every one of
these and other factors with respect to each manufacturer's potential
deployment of each technology available during the production intent or
emerging technology framework. Attempting to do so would require an
extraordinary effort by the agency, and would likely be subject to
tremendous uncertainties. For example, in the current economic and
market environment, the agency expects that it would be impossible to
reliably predict specific characteristics of future supply chains.
Therefore, the agency has concluded that it is appropriate to continue
using phase-in caps to apply the agency's best judgment of the extent
to which such factors combine to constrain the rates at which
technologies may feasibly be deployed. We note, however, that many of
the assumptions about phase-in caps made in this final rule apply to
years beyond MY 2011, because as the NAS Committee and commenters
indicated, technologies are phased in over several years, so the agency
evaluated the phasing-in of technologies over the five-year period
proposed in the NPRM. NHTSA provides these assumptions both in response
to comments and to provide context for the agency's decisions regarding
MY 2011 phase-in caps. We emphasize that all assumptions for years
other than MY 2011 will be reconsidered for future rulemakings and may
be subject to change at that time.
    Considering the above-mentioned comments, NHTSA has concluded that
the phase-in caps it applied during its analysis documented in the 2008
NPRM resulted in technology penetration rates that were unrealistically
high in the earlier model years covered by its proposal, particularly
for MY 2011. This was a significant basis for the proposed standards'
``front loading'' about which manufacturers expressed serious concerns.
In response, and based on this conclusion, the Volpe model was modified
for purposes of the final rule analysis to use phase-in caps for each
technology that vary from one year to the next, and that in many cases
would have increased more rapidly in the later years of the agency's
analysis than in earlier years. In making these changes, particularly
to the MY 2011 phase-in caps, the agency has been mindful of the need
to provide manufacturers sufficient lead time to add technologies to
their fleets. In the agency's judgment, its revised approach more
realistically represents manufacturers' capabilities and therefore
produces more realistic estimates of the costs of new CAFE standards.
    For some technologies, NHTSA also concluded that slower overall
rates of fleet penetration are more likely than the rates shown in the
NPRM. The agency estimates that cylinder deactivation, stoichiometric
GDI, and turbocharging with downsizing would be able to potentially be
added to 12-14 percent of the fleet per year on average, rather than
the 20 percent phase-in caps used in the NPRM for these technologies.
Considering manufacturers' comments and some aspects of its
reevaluation of the incremental benefits of available engine
technologies, the agency has concluded that these technologies will,
for some engines, require more significant hardware changes and
certification burden than previously recognized, such that feasible
deployment is likely to be somewhat slower than estimated in the NPRM.
    NHTSA has also concluded, considering the complexities involved in
deploying strongly hybridized vehicles (i.e., power split, two mode,
and plug-in hybrids), it is unrealistic to expect that, in response to
new CAFE standards, manufacturers can produce more of such vehicles in
MY 2011 than they are already planning. Therefore, NHTSA has set the MY
2011 phase-in cap for strong hybrids to zero in that model year. Based
on new information regarding engineering resources entailed in
developing new power split and two-mode hybrid vehicles, the agency
estimated in its analysis that these technologies could be added to up
to 11 percent and 8 percent, respectively, of a given manufacturer's
long run fleet, rather than the 15 percent the agency estimated for the
NPRM. The agency also considered a less aggressive 1 percent longer run
phase-in cap for plug-in hybrids, in part because although the agency
expects that plug-in hybrids will rely on lithium-ion batteries, it is
not clear whether and, if so, how the supply chain for large and robust
lithium-ion batteries will develop.
    On the other hand, NHTSA has also concluded that some technologies
can potentially be deployed more widely than estimated in the NPRM. For
example, the agency estimates that 6/7/8-speed transmissions, dual
clutch or automated manual transmissions, secondary axle disconnect,
and aerodynamic improvements can potentially (notwithstanding
engineering constraints that, for example, preclude the application of
aerodynamic improvements to some performance vehicles) be added at an
average rate of 20 percent per year of a given manufacturer's fleet
rather than the 14-17 percent average annual phase-in caps used in the
NPRM for these technologies. In the agency's judgment, increased phase-
in caps are appropriate for these transmission technologies, in part
because the agency's review of confidential product plans which
indicated a higher than anticipated application rate of these
technologies than existed at the time of the NPRM. Additionally,
several manufacturers indicated a high likelihood of significant usage
of dual clutch transmissions across their fleet of vehicles. The
secondary axle disconnect technology was redefined for the final rule
to consist of a somewhat basic, existing technology applicable only to
4 wheel-drive vehicles (a smaller population) rather than the NPRM-
defined technology (which was applicable to both 4 and all wheel drive
vehicles). The agency has also concluded that, because it has
identified performance vehicles as such, and has estimated that
aerodynamic improvements are not applicable to these vehicles,
aerodynamic dynamic improvements can be applied more widely as long as
they are applied consistent with vehicle redesign schedules.
Furthermore, considering changes in manufacturers' stated expectations
regarding prospects for diesel engines, the agency estimates that
diesel engines could be added to as much as 4 percent of a
manufacturer's light truck fleet each year on average, rather than the
3 percent estimated in the NPRM. These changes in NHTSA's estimates
stem from the agency's reevaluation of the status of these
technologies, as revealed by manufacturers' plans and confidential
statements, as well as other related comments submitted in response to
the NPRM.
    Regarding comments that manufacturers' public statements reflect
the ability to deploy technology more rapidly than reflected in the
phase-in caps NHTSA applied in the NPRM, NHTSA notes that it did
consider such statements. Combined with other information, these led
the agency to conclude that, as mentioned above, some technologies
could, particularly in later years, be applied more widely than the
agency had previously estimated. However, in their confidential
statements to NHTSA, manufacturers

are typically more candid about factors--both positive and negative--
that affects their ability to deploy new technologies than they are in
public statements available to their competitors. Therefore, NHTSA
places greater weight on manufacturers' confidential statements,
especially when they are consistent with statements made by other
manufacturers and/or suppliers. NHTSA also observes that some
organizations have exhibited a tendency to take manufacturers'
statements out of context, or overlook important caveats included in
such statements, which are largely used for marketing purposes.
    Table IV-8 below outlines the phase-in caps for each discrete
technology for MY 2011. These phase-in caps, along with the expanded
number and types of vehicle subclasses, address the concerns raised by
commenters and represent a substantial improvement in terms of
consideration of the factors affecting technology penetration rates
over those used in the NPRM. Additional considerations regarding
specific phase-in caps, including nonlinear increases in these caps,
are presented in the more detailed technology-by-technology analysis
summarized below.
    For some of the technologies applied in the final rule, primarily
the valvetrain and diesel engine technologies, NHTSA has utilized
combined phase-ins caps since the technologies are effectively the same
from the standpoints of engineering and implementation. The final rule
represented diesel engines as two technologies that both result in the
conversion of gasoline engine vehicles. The annual phase-in caps for
these two technologies, which are both set to a maximum of 3 percent
for passenger cars (4 percent for light trucks) have been combined so
that the maximum total application of either or both technologies to
any manufacturers' passenger car fleet is limited to 3 percent (not 6
percent). For example, if 3 percent of a manufacturers' passenger car
fleet has received diesel following combustion restart in a given year,
diesel following turbocharging and downsizing will not be applied
because the phase-in cap for diesels would have been reached. These
combined phase-in caps are discussed below where applicable to each
technology.
BILLING CODE 4910-59-P
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[GRAPHIC] [TIFF OMITTED] TR30MR09.032

BILLING CODE 4910-59-C

D. Specific Technologies Considered for Application and NHTSA's
Estimates of Their Incremental Costs and Effectiveness

1. What data sources did NHTSA evaluate?
    In developing the technology assumptions in the final rule, NHTSA,
working with Ricardo, examined a wide range of data sources and
comments. We reexamined the sources we relied on for the NPRM such as
the 2002 NAS Report, the 2004 NESCCAF report developed for CARB by AVL
and Martec, the 2006 EEA report and the EPA certification data. We also
considered more recent and updated sources of information and reports
submitted to the NPRM docket, including the (1) Sierra Research report
submitted by the Alliance as an attachment to its comments as another
set of estimates for fuel economy cost and effectiveness,\156\ (2)
CARB's response to aspects of that report, which was filed as
supplemental comment on October 14, 2008, (3) the 2008 Martec
Report,\157\ which updated the Martec report on which the 2004 NESCCAF
study was based, and the EPA Staff Technical Report,\158\ which largely
mirrored NHTSA's NPRM estimates.
---------------------------------------------------------------------------

    \156\ Sierra Research, ``Attachment to Comment Regarding the
NHTSA Proposal for Average Fuel Economy Standards Passenger Cars and
light Trucks Model Years 2011-2015,'' June 27, 2008. Available at
Docket No. NHTSA-2008-0089-0179.1.
    \157\ Martec, ``Variable Costs of Fuel Economy Technologies,''
June 1, 2008. Available at Docket No. NHTSA-2008-0089-0169.1.
    \158\ EPA Staff Technical Report: Cost and Effectiveness
Estimates of Technologies Used to Reduce Light-Duty Vehicle Carbon
Dioxide Emissions. EPA420-R-08-008, March 2008.
---------------------------------------------------------------------------

    The agency also evaluated confidential data from a number of
vehicle manufacturers and technology component suppliers.\159\ We note
that vehicle manufacturers updated their product plans in response to
NHTSA's May 2008 Request for Comment.\160\
---------------------------------------------------------------------------

    \159\ The major suppliers that provided NHTSA with fuel economy
cost and effectiveness estimates in response to our request for
comments included Borg-Warner, Cummins, and Delphi, while Borg-
Warner, Bosch, Coring, Cummins, Delphi, and Siemens also provided
NHTSA with fuel economy cost and effectiveness estimates during
confidential meetings.
    \160\ Manufacturers that provided NHTSA with fuel economy cost
and effectiveness estimates in response to our request for comments
include BMW, Chrysler, Daimler, Ford, GM, Honda, Nissan, and Toyota.
---------------------------------------------------------------------------

2. Individual technology descriptions and cost/effectiveness estimates
(a) Gasoline Engine Technologies
(i) Overview
    Most passenger cars and light trucks in the U.S. have gasoline-
fueled spark ignition internal combustion engines. These engines move
the vehicle by converting the chemical energy in gasoline fuel to
useful mechanical work output as shaft torque and power delivered to
the transmission and to the vehicle's driving wheels. Vehicle fuel
economy is directly proportional to the efficiency of the engine. Two
common terms are used to define the efficiency of an engine are (1)
Brake Specific Fuel Consumption (BSFC), which is the ratio of the mass
of fuel used to the output mechanical energy; and (2) Brake Thermal
Efficiency (BTE), which is the ratio of the fuel chemical energy, known

as calorific value, to the output mechanical energy.
    The efficiency of an automotive spark ignition engine varies
considerably with the rotational speed and torque output demanded from
the engine. The most efficient operating condition for most current
engine designs occurs around medium speed (30-50 percent of the maximum
allowable engine rpm) and typically between 70-85 percent of maximum
torque output at that speed. At this operating condition, BTE is
typically 33-36 percent. However, at lower engine speeds and torque
outputs, at which the engine operates in most consumer vehicle use and
on standardized drive cycles, BTE typically drops to 20-25 percent.
    Spark ignition engine efficiency can be improved by reducing the
energy losses that occur between the point of combustion of the fuel in
the cylinders to the point where that energy reaches the output
crankshaft. Reduction in this energy loss results in a greater
proportion of the chemical energy of the fuel being converted into
useful work. For improving engine efficiency at lighter engine load
demand points, which are most relevant for CAFE fuel economy, the
technologies that can be added to a given engine may be characterized
by which type of energy loss is reduced, as shown in Table IV-9 below.
[GRAPHIC] [TIFF OMITTED] TR30MR09.033

    As Table IV-9 shows, the main types of energy losses that can be
reduced in gasoline engines to improve fuel economy are exhaust energy
losses, engine friction losses, and gas exchange losses. Converting the
gasoline engine to a diesel engine can also reduce heat losses.
Exhaust Energy Loss Reduction
    Exhaust energy includes the kinematic and thermal energy of the
exhaust gases, as well as the wasted chemical energy of unburned fuel.
These losses represent approximately 32 percent of the initial fuel
chemical energy and can be reduced in three ways: first, by recovering
mechanical or electrical energy from the exhaust gases; second, by
improving the hydrocarbon fuel conversion; and third, by improving the
cycle thermodynamic efficiency. The thermodynamic efficiency can be
improved by either increasing the engine's compression ratio or by
operating with a lean air/fuel ratio. The latter is not considered to
be at the emerging technology point yet due to the non-availability of
lean NOX aftertreatment, as discussed below. However, the
compression ratio may potentially be raised by 1 to 1.5 ratios using
stoichiometric direct fuel injection.
Engine Friction Loss Reduction
    Friction losses can represent a significant proportion of the
global losses at low load. These losses are dissipated through the
cooling system in the form of heat. Besides via direct reduction
measures, friction can also be reduced through downsizing the engine by
means of increasing the engine-specific power output.
Gas Exchange Loss Reduction
    The energy expended while delivering the combustion air to the
cylinders and expelling the combustion products is known as gas
exchange loss, commonly referred to as pumping loss. The main source of
pumping loss in a gasoline engine is the use of an inlet air throttle,
which regulates engine output by controlling the pre-combustion
cylinder air pressure, but is an inefficient way to achieve this
pressure control. A more efficient way of controlling the cylinder air
pressure is to modify the valve timing or lift. Another way to reduce
the average pumping losses is to ``downsize'' the

engine, making it run at higher loads or higher pressures.
    As illustrated in Table IV-9, several different technologies target
pumping loss reduction, but it is important to note that the fuel
consumption reduction from these technologies is not necessarily
cumulative. Once most of the pumping work has been eliminated, adding
further technologies that also target reduced pumping loss will have
little additional effectiveness. Thus, in the revised decision trees,
the effectiveness value shown for additional technologies targeting
pumping loss depends on the existing technology combination already
present on the engine.
(ii) Low Friction Lubricants (LUB)
    One of the most basic methods of reducing fuel consumption in
gasoline engines is the use of lower viscosity engine lubricants. More
advanced multi-viscosity engine oils are available today with improved
performance in a wider temperature band and with better lubricating
properties. CAFE standards notwithstanding, the trend towards lower
friction lubricants is widespread. Within the next several year, most
vehicles are likely to use 5W-30 motor oil, and some will use even less
viscous oils, such as 5W-20 or possibly even 0W-20, to reduce cold
start friction.
    The NPRM reflected NHTSA's belief that manufacturer estimates are
the most accurate, and it estimated that low friction lubricants could
reduce fuel consumption by 0.5 percent for all vehicle types at an
incremental cost of $3, which represented the mid-point of manufacturer
estimates range, rounded up to the next dollar. For the final rule
NHTSA used the $3 cost from the NPRM, updated it to 2007 dollars, and
marked it up to a retail price equivalent (RPE) of $5. Several
manufacturers commented confidentially that low friction lubricants
could reduce fuel consumption by 0 to 1 percent, and the Alliance
suggested 0.5 percent relative to the baseline fleet. These comments
confirm NHTSA's NPRM effectiveness estimate, so NHTSA has retained it
for the final rule.
    Low friction lubricants may be applied to any class of vehicles.
The phase-in for low friction lubricants is capped at 50 percent for MY
2011. Honda commented that low friction lubricants cannot be applied to
engines that have not been developed specifically for them.\161\ NHTSA
understands that in some cases there could be a need for design changes
and durability verification to implement low friction lubricants in
existing engines. However, aftermarket low friction lubricant products
already exist, and have been approved for use in existing engines.
---------------------------------------------------------------------------

    \161\ Docket NHTSA-2008-0089-0191.1.
---------------------------------------------------------------------------

(iii) Engine Friction Reduction (EFR)
    Besides low friction lubricants, manufacturers can also reduce
friction and improve fuel economy by improving the design of engine
components and subsystems. Examples include improvements in low-tension
piston rings, roller cam followers, improved crankshaft design and
bearings, material coatings, material substitution, more optimal
thermal management, and piston and cylinder surface treatments.
    In the NPRM, based on confidential manufacturer data and the NAS,
NESCCAF, and EEA reports, NHTSA estimated that friction reduction could
incrementally reduce fuel consumption for all vehicles by 1 to 3
percent at a cost of $0 to $21 per cylinder resulting in cost estimates
of $0-$84 for a 4-cylinder, $0-$126 for a V-6, and $0-$168 for a V-8.
For the final rule, NHTSA assumed there would be some cost associated
with reducing engine friction, since at a minimum engineering and
validation testing is required, in addition to any new components
required such as roller followers or improved bearings. Additionally
some revised components, such as improved surface materials/treatments,
piston rings, etc., have costs that vary by component size which need
to account for the full range of engines under consideration in the
rulemaking, from small displacement gasoline to large displacement
diesel engines.
    Considering the above, NHTSA relied on confidential manufacturer
comments in response to the NPRM to determine a lower technology cost
bound of $35 for a 4-cylinder engine and an upper cost of $195 for a 6
cylinder engine. These costs were marked up by a 1.5 RPE factor to
arrive at per-cylinder costs of $13 to $49 which were used to establish
costs based on cylinder count. Costs of $52 to $196 for a 4-cylinder
engine, $78 to $294 for a 6-cylinder engine, and $104 to $392 for an 8-
cylinder engine were used in the final rule.
    Confidential manufacturer comments submitted in response to the
NPRM showed an effectiveness range of 0.3 to 2 percent for engine
friction reduction. Besides the comments received another effectiveness
estimate, a November 2007 press release from Renault, claimed a gain of
2 percent over the NEDC cycle \162\ from engine friction
reduction.\163\ Based on the available sources, NHTSA established the
fuel consumption effectiveness estimate for the final rule as 1 to 2
percent.
---------------------------------------------------------------------------

    \162\ Due to the advanced nature of many of the technologies
discussed in the NPRM, and in an effort to find broad based
rationale for the specific benefits of each technology type,
reference data has been gathered that specifies fuel consumption
benefits as measured on the NEDC test cycle. To make this
conversion, data from the International Council on Clean
Transportation (ICCT) showed excellent correlation between CAFE test
cycle results and NEDC test cycle results. While there was an offset
in the linear best fit, the slope was nearly equal to 1; therefore,
for this report, any percentage improvement found on the NEDC cycle
will be assumed to be equivalent to gains found on the CAFE test
cycle.
    \163\ Renault press release, ``Renault Introduces The
Ecological, Economical Logan `Renault Eco[sup2]' Concept At The
Michelin Organized Challenge Bibendum, November 14, 2007. Available
at http://www. renault.com/renault_ com/en/images/15181%2015181_
DP_logan_eco2_Shanghai_14_nov_DEF_DB_2_tcm1120-686305.pdf
(last accessed October 27, 2008).
---------------------------------------------------------------------------

    Engine friction-reducing technologies are available from model year
2011 and may be applied to all vehicle subclasses. No learning factors
were applied to costs as the technology has a loosely defined BOM which
may in part consist of materials (surface treatments, raw materials)
that are commodity based. As was the case in the NPRM, an average of 20
percent year-over-year phase-in rate starting in 2011 was adopted. As
confirmed by manufacturers' comments, NHTSA has maintained the NPRM
position that engine friction reduction may only be applied in
conjunction with a refresh cycle.
(iv) Variable Valve Timing (VVT)
    Variable valve timing (VVT) is a classification of valve-train
designs that alter the timing of the intake valve, exhaust valve, or
both, primarily to reduce pumping losses, increase specific power, and
control the level of residual gases in the cylinder. VVT reduces
pumping losses when the engine is lightly loaded by positioning the
valve at the optimum position needed to sustain horsepower and torque.
VVT can also improve thermal efficiency at higher engine speeds and
loads. Additionally, VVT can be used to alter (and optimize) the
effective compression ratio where it is advantageous for certain engine
operating modes.
    VVT has now become a widely adopted technology: For the 2007 model
year, over half of all new cars and light trucks have engines with some
method of variable valve timing. Therefore, the degree of further
improvement across the fleet is limited by the level of valvetrain
technology already

implemented on the vehicles. Comments from Ford received in response to
the NPRM indicate that many of its new and upgraded engines during the
specified time period will launch with or upgrade to advanced forms of
VVT, which are discussed below.\164\ Information found in the submitted
product plans is used to determine the degree to which VVT technologies
have already been applied to particular vehicles to ensure the proper
level of VVT technology, if any, is applied. There are three different
implementation classifications of variable valve timing: ICP (Intake
Cam Phasing), where a cam phaser is used to adjust the timing of the
inlet valves only; CCP (Coupled Cam Phasing), where a cam phaser is
used to adjust the timing of both the inlet and exhaust valves equally;
and DCP (Dual Cam Phasing), where two cam phasers are used to control
the inlet and exhaust valve timing independently. Each of these three
implementations of VVT uses a cam phaser to adjust the camshaft angular
position relative to the crankshaft position, referred to as ``camshaft
phasing.'' This phase adjustment results in changes to the pumping work
required by the engine to accomplish the gas exchange process. The
majority of current cam phaser applications use hydraulically actuated
units, powered by engine oil pressure and managed by a solenoid that
controls the oil pressure supplied to the phaser. Electrically actuated
cam phasers are relatively new, but are now in volume production with
Toyota, which suggests that technical issues have been resolved.
---------------------------------------------------------------------------

    \164\ Docket No. NHTSA-2008-0089-0202.1, at 4.
---------------------------------------------------------------------------

    Honda commented that VVT is not applicable on existing engine
designs that do not already contain these technologies due to
durability, noise-vibration-harshness (NVH), thermal, packaging, and
other constraints that require engine redesign.
1. Intake Cam Phasing (ICP)
    Valvetrains with ICP can modify the timing of the inlet valves by
phasing the intake camshaft while the exhaust valve timing remains
fixed. This requires the addition of a cam phaser on each bank of
intake valves on the engine. An in-line 4-cylinder engine has one bank
of intake valves, while V-configured engines have two banks of intake
valves.
    In the NPRM, NHTSA and EPA estimated that ICP would cost $59 per
cam phaser or $59 for an in-line 4 cylinder engine and $119 for a V-
type, for an overall cost estimate of $59 to $119, based on the NAS,
NESCCAF, and EEA reports and confidential manufacturer data. NHTSA
received several updated cost estimates confidentially from
manufacturers for ICP costs in response to the NPRM that varied over a
wide range from $35 to $300, and additionally looked to the 2008 Martec
report for costing guidance. According to the 2008 Martec report,
content assumptions for ICP costing include the addition of a cam
phaser and oil control valves at $25 and $10 respectively, per bank,
which agreed with confidential manufacturer data received in response
to the NPRM. These figures were then adjusted to include an incremental
camshaft sensor per bank at $4, and an additional $2 increase to
account for an ECU upgrade as shown by confidential data. Using a
markup of 1.5 to yield a RPE value, the incremental cost for ICP in the
final rule is estimated to be $61 per bank, resulting in a $61 charge
for in-line engine configurations and $122 for V-engine configurations.
    For fuel economy effectiveness values, NHTSA tentatively concluded
in the NPRM that the incremental gain in fuel consumption for ICP would
be 1 to 2 percent depending on engine configuration, in agreement with
the NESCCAF study. Confidential manufacturer data submitted in response
to the NPRM showed a larger effectiveness range of 1.0 to 3.4 percent,
although the majority of those estimates fell at the lower end of that
range. Based on the comments received, NHTSA retained the NPRM
estimates of 1 to 2 percent incremental improvement in fuel consumption
due to ICP.
    ICP is applicable to all vehicle classes and can be applied at the
refresh cycle. For the final rule, NHTSA has combined the phase-in caps
for ICP, CCPS, CCPO and DCP and capped the joint penetration allowed at
15 percent in MY 2011 with time-based learning applied.
2. Coupled Cam Phasing (CCPS and CCPO)
    Valvetrains with coupled (or coordinated) cam phasing can modify
the timing of both the inlet valves and the exhaust valves an equal
amount by phasing the camshaft of a single overhead cam (SOHC) engine
or an overhead valve (OHV) engine.\165\ For overhead cam engines, this
requires the addition of a cam phaser on each bank of the engine. Thus,
an in-line 4-cylinder engine has one cam phaser, while V-engines have
two cam phasers. For overhead valve (OHV) engines, which have only one
camshaft to actuate both inlet and exhaust valves, CCP is the only VVT
implementation option available.\166\
---------------------------------------------------------------------------

    \165\ Although CCP appears only in the SOHC and OHV branches of
the decision tree, it is noted that a single phaser with a secondary
chain drive would allow CCP to be applied to DOHC engines. Since
this would potentially be adopted on a limited number of DOHC
engines NHTSA did not include it in that branch of the decision
tree.
    \166\ It is also noted that coaxial camshaft developments would
allow other VVT options to be applied to OHV engines. However, since
they would potentially be adopted on a limited number of OHV engines
NHTSA did not include them in the decision tree.
---------------------------------------------------------------------------

    In the NPRM, NHTSA explained that for an OHV engine, the same
phaser added for ICP would be used for CCP control, so the cost for CCP
should be identical to that for ICP. For an OHV, since only one phaser
would be required since only camshaft exists, NHTSA estimated the cost
for CCP at $59 regardless of engine configuration, using the logic
provided for ICP. For purposes of the final rule, the logic for ICP
also carries over to the cost estimates for CCP. Cost assumptions for
CCP are the same as ICP resulting in RPE-adjusted costs of $61 for in-
line SOHC or OHV engines and $122 for SOHC V-engine configurations,
incremental to an engine without VVT.
    For fuel economy effectiveness, NHTSA estimated in the NPRM that
the incremental gain in fuel consumption for CCP is 1 to 3 percent
above that obtained by ICP, in agreement with the NESCCAF report and
confidential manufacturer data. Confidential manufacturer data
submitted in response to the NPRM also showed an effectiveness range of
1 to 3 percent for CCP, although Ford has publicly reported a 3.3
percent improvement for CCP when applied to its 5.4 liter 3-valve V8
engine (which has high EGR tolerance due to the valve-masking effect
with the 3-valve design).\167\ Most engines are not as EGR-tolerant and
so will not achieve as much effectiveness from CCP as the Ford engine.
For purposes of the final rule, NHTSA essentially carried over the NPRM
incremental effectiveness of applying the CCP technologies to be 1 to 3
percent. CCP can be applied to any class of vehicles at refresh. For
the final rule, NHTSA has combined the phase-in caps for ICP, CCPS,
CCPO and DCP and capped the joint penetration at 15 percent in MY 2011.
Since these technologies are mature and in high volume, time-based
learning factors are

applied. CCP can be applied to any class of vehicles.
---------------------------------------------------------------------------

    \167\ Robert Stein, Tachih Chou, and Jeffrey Lyjak, ``The
Combustion System Of The Ford 5.4 L 3 Valve Engine,'' Global
Powertrain Congress 2003--Advanced Engine Design & Performance, Sep
2003, Volume 24. Available at http://www.gpc-icpem.org/pages/
publications.html (last accessed Nov. 8, 2008).
---------------------------------------------------------------------------

3. Dual Cam Phasing (DCP)
    The most flexible VVT design is dual (independent) cam phasing,
where the intake and exhaust valve opening and closing events are
controlled independently. This option allows the option of controlling
valve overlap, which can be used as an internal EGR strategy. At low
engine loads, DCP creates a reduction in pumping losses, resulting in
improved fuel consumption. Additionally, increased internal EGR results
in lower engine-out NOX emissions and improved fuel
consumption. This fuel economy improvement depends on the residual
tolerance of the combustion system, as noted in the CCP section above.
Additional improvements are observed at idle, where low valve overlap
can result in improved combustion stability, potentially reducing idle
fuel consumption.
    In the NPRM, NHTSA estimated costs for DCP by building upon the
cost estimates for ICP, where an additional cam phaser is added to
control each bank of exhaust valves less the cost of the EGR valve
which can be deleted. This resulted in an NPRM cost range of $89 to
$209. For purposes of the final rule, cost assumptions for DCP, which
included inflation, were determined by essentially doubling the ICP
hardware, yielding an incremental cost of $61 per engine cylinder bank,
over ICP. This translates to a cost of $61 for in-line engines and $122
for V-engine configurations, incremental to ICP technology.
    For fuel economy effectiveness, NHTSA estimated in the NPRM that
the incremental gain in fuel consumption for DCP is 1 to 3 percent, in
agreement with the NESCCAF report and confidential manufacturer data.
Confidential manufacturer data received in response to the NPRM showed
an effectiveness range of 0.5 to 3.4 percent for DCP. Publicly
available data from BMW \168\ and Ford \169\ show an effectiveness of 5
percent for DCP over engines without VVT, agreeing with the upper
bounds for ICP and DCP combined. For purposes of the final rule, NHTSA
concluded that the effectiveness for DCP should be at the upper end of
the CCP range due to the additional flexibility gained through
independent control of intake and exhaust valve timing, and therefore
estimated an incremental fuel consumption reduction of 2 to 3 percent
for DCP incremental to the 1 to 2 percent for ICP.
---------------------------------------------------------------------------

    \168\ Meyer, BMW, ``Turbo-Charging BMW's Spray-Guided DI
Combustion System--Benefits and Challenges,'' Global Powertrain
Congress, September, 2005, vol. 33. Available at http://www.gpc-
icpem.org/pages/publications.html (last accessed Nov. 8, 2008).
    \169\ Ulrich Kramer and Patrick Phlips, ``Phasing Strategy For
An Engine With Twin Variable Cam Timing,'' SAE Technical Paper 2002-
01-1101, 2002. Available at http://www.sae.org/technical/papers/
2002-01-1101. (last accessed Nov. 9, 2008),
---------------------------------------------------------------------------

    There are no class-specific applications of this technology and DCP
can be applied at the refresh cycle. For the final rule, NHTSA has
combined the annual average phase-in caps for ICP, CCPS, CCPO and DCP
and capped the joint penetration at 15 percent in MY 2011. The DCP
technology is assumed to be produced at high volume, thus time-based
learning is applied.
(v) Discrete Variable Valve Lift (DVVLS, DVVLD, DVVLO)
    DVVL systems allow the selection between two or three separate cam
profiles by means of a hydraulically actuated mechanical system. By
optimizing the cam profile for specific engine operating regions, the
pumping losses can be reduced by reducing the amount of throttling
required to produce the desired engine power output. This increases the
efficiency of the engine. DVVL is normally applied together with VVT
control. DVVL is also known as Cam Profile Switching (CPS). DVVL is a
mature technology with low technical risk.
    In the NPRM, based on the NESCCAF report and confidential
manufacturer data, NHTSA estimated the incremental cost for DVVL at
$169 to $322 compared to VVT depending on engine size, which included
$25 for controls and associated oil supply needs. In response to the
NPRM, confidential manufacturer comments noted a cost range of $150 to
$600 for DVVL on OHC engines. Sierra Research has noted costs ranging
from $518 to $656 for DVVL including dual cam phasers on a mid-size car
and $634 to $802 on trucks.\170\ For purposes of the final rule, NHTSA
has changed the order of the technologies in the decision trees which
has changed how the DVVL costs are handled.
---------------------------------------------------------------------------

    \170\ Docket No. NHTSA-2008-0089-0179.1, p 59 and Docket No.
NHTSA-2008-0089-0046, p. 52.
---------------------------------------------------------------------------

    For the overhead cam engines, SOHC and DOHC, the costs were derived
by taking $30 per cylinder for lost motion devices, adding a $4
incremental cost for a camshaft position sensor upgrade and $10 for an
oil control valve on each engine cylinder bank, as indicated by the
2008 Martec report. This assumes that one lost motion device is used to
control either a single intake valve on an SOHC engine or a pair of
intake valves on a DOHC engine, as was done in the NPRM. NHTSA's
independent review concurred with data in the 2008 Martec report
because it contained the most complete published description of DVVL
costs and it agreed with confidential manufacturer data received in
response to the NPRM NHTSA adopted these cost estimates for the final
rule, such that incremental costs for DVVLS and DVVLD, including a 1.5
RPE markup, are $201 for an in-line 4-cylinder engine, $306 for V-6
engines, and $396 for V-8 engines. For overhead valve engines, OHV, the
costs for V6 and V8 engines do not include the lost motion devices and
control hardware since DVVLO follows cylinder deactivation on the OHV
decision tree path and employs similar lost motion devices. Rather, the
DVVLO cost is for active engine mounts on V6 and V8 OHV engines which
was based on $50 variable cost from Martec, adjusted to 2007 dollars
and marked up with a 1.5 RPE factor to $76. For in-line 4-cylinder
engines cylinder deactivation is not allowed so the cost for DVVLO is
the same as for DVVLS and DVVLD at $201.
    For fuel economy effectiveness, in the NPRM NHTSA estimated that
DVVL could incrementally reduce fuel consumption by 0.5 to 3 percent
compared to VVT. Confidential manufacturer comments received in
response to the NPRM indicated a 2 percent effectiveness for DVVL,
while the Alliance commented that a two-step system with dual cam
phasing could reduce fuel consumption by 6.3 percent, with 1.3 percent
attributable to DVVL. Publicly-available estimates suggest an
improvement over the NEDC test cycle of 8 percent for DCP with 2 stage
inlet DVVL applied to a 1.6 liter DOHC 4 cylinder engine in a 1500 kg
vehicle.\171\ With the DCP system expected to deliver 5 percent
effectiveness, this suggests the DVVL system is giving approximately 3
percent. The comments received from manufacturers and publicly
available data are in alignment with independent review suggesting a
range of 1 to 3 percent for overhead cam engines with VVT. NHTSA has
therefore estimated an incremental reduction in fuel consumption for
DVVLS and DVVLD of 1 to 3 percent for purposes of the final rule. On
OHV engines, DVVLO is applied following both VVT and cylinder
deactivation, therefore the fuel consumption effectiveness has been

reduced from 1 to 3 percent for OHC engines to 0.5 to 2.6 percent.
---------------------------------------------------------------------------

    \171\ Mark Sellnau and Eric Rask, ``Two-Step Variable Valve
Actuation For Fuel Economy, Emissions, and Performance, Delphi
Research Labs, SAE 2003-01-0029. Available at http://www.sae.org/
technical/papers/2003-01-0029. (last accessed Nov. 9, 2008).
---------------------------------------------------------------------------

    This technology may be applied to any class of vehicles with any
kind of engine at the redesign cycle. For the final rule, NHTSA has
combined the phase-in caps for DVVLS, DVVLD, DVVLO and CVVL and capped
the joint penetration allowed at 15 percent in MY 2011 with time-based
learning applied. Other technologies, such as continuously variable
valve lift (CVVL), described below, will be implemented in place of
DVVL in some applications where the fuel economy requirements dictate
further optimization of the engine's breathing characteristics to
improve efficiency.
(vi) Continuously Variable Valve Lift (CVVL)
    In CVVL systems, maximum valve lift is varied by means of a
mechanical linkage, driven by an actuator controlled by the engine
control unit. The valve opening and phasing vary as the maximum lift is
changed; the relation depends on the geometry of the mechanical system.
BMW has the most production experience with CVVL systems and has sold
port-injected ``Valvetronic'' engines since 2001. CVVL allows the
airflow into the engine to be regulated by means of inlet valve opening
reduction, which improves engine efficiency by reducing pumping losses
from throttling the intake system further upstream as with a normally
throttled engine.
    Variable valve lift gives a further reduction in pumping losses
compared to that which can be obtained with cam phase control only,
with CVVL providing greater effectiveness than DVVL, since it can be
fully optimized for all engine speeds and loads, and is not limited to
a two or three step compromise. There may also be a small reduction in
valvetrain friction when operating at low valve lift. This results in
improved low load fuel consumption for cam phase control with variable
valve lift as compared to cam phase control only. Most of the fuel
economy effectiveness is achieved with variable valve lift on the inlet
valves only.
    It is generally more difficult to achieve good cylinder-to-cylinder
airflow balance at low load with a CVVL valve-throttled engine due to
the sensitivity of airflow to small differences in lift caused by
manufacturing tolerances. BMW has reported mixture quality issues with
CVVL and port fuel injection, requiring a compromise on pumping work
reduction to ensure good mixture quality. In addition, a small amount
of throttling is necessary with CVVL to maintain the vacuum required
for power brake assist, unless a separate vacuum pump is used. BMW
calibrations maintain a small amount of inlet manifold depression on
their ``Valvetronic'' engines to allow the brake servo to function,
which reduces the efficiency gain from the system somewhat. Tumble air
motion generated by the inlet port is not available in the cylinder at
low valve lift, which has an effect on combustion characteristics. The
high gas velocities at the valve seat generate high turbulence levels,
but most of this has decayed by the time of ignition. This phenomenon
could potentially lead to sub-optimal combustion characteristics, which
would reduce the fuel consumption effectiveness of the technology.
    In the NPRM, NHTSA estimated the cost for CVVL of $254 to $508
compared to VVT, with cost estimates varying from $254 for a 4-cylinder
engine, $466 for a 6-cylinder engine, and $508 for an 8-cylinder
engine, based on confidential manufacturer data and the NESCCAF report,
with more weight given to the manufacturer data. As for DVVL, for
purposes of the final rule, NHTSA relied primarily on the 2008 Martec
report, because it contained the most complete published description of
CVVL costs and agreed with confidential manufacturer data received in
response to the NPRM. The system consists of 1 stepper motor per bank
to control an eccentric shaft and the costs as described by Martec
include dual cam phasing are $285 for an in-line 4-cylinder engine,
$450 for a V-6 engine, and $550 for a V-8 engine. Applying a 1.5 RPE
markup factor to these variable costs, and then deducting $122 for the
incremental cost of both ICP and DCP per bank, the incremental RPE cost
is $306 for a 4-cylinder engine, $432 for a 6-cylinder engine and $582
for an 8-cylinder engine.
    For fuel economy effectiveness, in the NPRM NHTSA estimated that
CVVL could incrementally reduce fuel consumption by 1.5 to 4 percent
compared to VVT, based on confidential manufacturer data and the
NESCCAF report. Confidential manufacturer comments received in response
to the NPRM suggested a range of 3 to 7.4 percent incremental fuel
consumption savings. NHTSA also found several sources reporting a 5
percent additional fuel consumption effectiveness over the NEDC cycle
when applying CVVL to an engine with dual cam phasers.\172\ For
purposes of the final rule, NHTSA has estimated the reduction in fuel
consumption for CVVL at 1.5 to 3.5 percent over an engine with DCP.
This estimate is lower than the effectiveness reported by BMW and
allows the application of CVVL without the need for the high level of
manufacturing complexity inherent in BMW's ``Valvetronic'' engines.
---------------------------------------------------------------------------

    \172\ See Johannes Liebl, Manfred Kluting, Jurgen Poggel, and
Stephen Missy, BMW, ``The New BMW 4-Cylinder Engine with Valvetronic
Part 2: Thermodynamics and Functional Features,'' MTZ Worldwide,
July/Aug. 2001, pp 26-29. See also Meyer, BMW, ``Turbo-Charging
BMW's Spray-Guided DI Combustion System--Benefits and Challenges,''
Global Powertrain Congress, Sept. 2005, vol. 33. Available at http:/
/www.gpc-icpem.org/pages/publications.html (last accessed Nov. 8,
2008). See also Rainer Wurms, Philipp Lobbert, Stefan Dengler, Ralf
Budack, and Axel Eiser, Audi, ``How Much VVT Makes Sense?'' Haus der
Technik Conference on Variable Valve Control, Essen, Feb. 2007.
---------------------------------------------------------------------------

    There are no class specific applications of this technology,
although it appears in only the DOHC portion of the decision tree. Due
to the changes required to implement DVVL on an engine the Volpe model
allows it to be applied at redesign model years only with time-based
learning applied. For the final rule, NHTSA has combined the phase-in
caps for DVVLS, DVVLD, DVVLO and CVVL and capped the joint penetration
allowed at 20 percent per year on average (15 percent in year one).
There is no technical reason this technology could not be applied to
all DOHC engines, but due to engineering resource limitations it is
unlikely that CVVL will be applied to all engines, and that other
technologies such as DVVL will be used in some instances.
(vii) Cylinder Deactivation (DEACS, DEACD, DEACO)
    In conventional spark-ignited engines, combustion occurs in all
cylinders of the engine (i.e., the engine is ``firing on all
cylinders''), and throttling the airflow controls the engine output, or
load. This is an inefficient method of operating the engine at low
loads as pumping losses result from throttling. Cylinder deactivation
(DEAC) can improve engine efficiency by disabling or deactivating half
of the cylinders when the load is less than half of the engine's total
torque capability, allowing the active cylinders to operate at roughly
twice the load level, and thereby incur roughly half the pumping
losses.
    Simplistically, cylinder deactivation control strategy relies on
setting maximum and minimum manifold absolute pressures (which are
directly proportional to load) within which it can deactivate the
cylinders. The engine operating range over which cylinder deactivation
may be enabled is restricted by other factors as well, with

noise, vibration, and harshness (NVH) being the primary concern; these
restrictions all reduce the fuel economy effectiveness achievable with
cylinder deactivation. In general, DEAC has very high sensitivity of
efficiency gain relative to vehicle application, according to comments
from Ford, Chrysler, the Alliance, and in confidential comments
submitted in response to the NPRM.
    Manufacturers have stated that use of DEAC on 4-cylinder engines
would cause unacceptable NVH; therefore NHTSA has not applied cylinder
deactivation to 4-cylinder engines. In addition, to address NVH issues
for V6 and V8 engines, active engine mounts are included in the content
list. Noise quality from both intake and exhaust systems has been
problematic on some vehicle applications, and in some cases, has
resulted in active exhaust systems solutions with an ECU-controlled
valve.
    The NPRM reported an incremental cost range for DEAC at $203 to
$229, citing manufacturer data as the most credible, with the bill of
materials including lost motion devices for each cylinder. The 2008
Martec report estimated the additional hardware necessary for cylinder
deactivation ranging between $50 for the addition of two active engine
mounts ($75 RPE using 1.5 RPE factor) where DVVL already exists. This
value has been adopted by NHTSA in the final rule so DEACS and DEACD
costs are $75. For OHV engines NHTSA estimates the costs for DEACO as
being $306 for V6 engines and $400 for V8 engines that are not already
equipped with DVVL using assumptions for lost motion devices plus
incremental costs for oil control valves and camshaft position sensors
as noted in the DVVL section.
    For fuel economy effectiveness, in the NPRM NHTSA estimated that
cylinder deactivation could reduce fuel consumption by 4.5 to 6
percent. As noted, DEAC has very high sensitivity of efficiency gain
relative to vehicle application. Chrysler, for example, stated that the
effectiveness could range from 3 to 10 percent on the same engine
depending on the specific vehicle application.\173\ Confidential
manufacturer comments received in response to the NPRM reported a range
of 3 to 7.5 percent. For the final rule, the incremental fuel
consumption effectiveness varies depending on which branch of the
decision tree it is on: For DOHC engines which are already equipped
with DCP and DVVLD there is little benefit that can be achieved since
the pumping work has already been minimized and internal EGR rates are
maximized, so the effectiveness ranges from 0 to 0.5 percent for DEACD;
for SOHC engines which have CCP and DVVLS applied, NHTSA estimates a
2.5 to 3 percent effectiveness for DEACS; and for OHV engines, which do
not have VVT or VVL technologies, the effectiveness for DEACO ranges
from 3.9 to 5.5 percent.
---------------------------------------------------------------------------

    \173\ Docket No. NHTSA-2008-0089-0215.1.
---------------------------------------------------------------------------

    This technology may be applied only to V-6 and V-8 engines, as
discussed above, and so does not apply to vehicle classes with I-4
engines. DEAC can be applied during a redesign or refresh model year
with time-based learning. NHTSA proposed to raise the phase-in cap for
this technology to 20 percent per year in the NPRM. For the final rule,
NHTSA has combined the phase-in caps for DEACS, DEACD and DEACO and
capped the joint penetration allowed at 9 percent in MY 2011.
(viii) Conversion to Double Overhead Camshaft Engine With Dual Cam
Phasing (CDOHC)
    This technology was named ``Multi-valve Overhead Camshaft Engine''
in the NPRM. Engines with overhead cams (OHC) and more than two valves
per cylinder achieve increased airflow at high engine speeds and
reductions of the valvetrain's moving mass and enable central
positioning of the spark plug. Such engines typically develop higher
power at high engine speeds. In the NPRM, the model was generally not
allowed to apply multivalve OHC technology to OHV engine, except where
continuous variable valve timing and lift (CVVL) is applied to OHV
engine. In that case, the model assumed conversion to a DOHC
valvetrain, because a DOHC valvetrain is a prerequisite for the
application of any advanced engine technology over and above CVVL.
Since applying CVVL to an OHV engine is the last improvement that could
be made, it was assumed that manufacturers would redesign that engine
as a DOHC and include CVVL as part of that redesign.
    However, it appears likely that vehicles will still use overhead
valve (OHV) engine with pushrods and one intake and one exhaust valve
per cylinder into the next decade. For the final rule, NHTSA assumed
that conversion of an OHV engine to a DOHC engine would more likely be
accompanied by dual cam phasing (DCP) than by CVVL, since DCP
application rates are higher than CVVL rates.
    For V8 engines, the incremental cost to redesign an OHV engine as a
DOHC with DCP was estimated as $746 which includes $415 for the engine
conversion to DOHC per the 2008 Martec report and a 1.5 RPE factor,
plus $122 for an incremental cam phasing system (reflecting the
doubling of cam shafts). For a V6 engine we estimated 75 percent of the
V8 engine cost to convert to DOHC plus the same incremental coupled cam
phasing cost to arrive at $590. For inline 4-cylinder engines, 50
percent of the V8 engine conversion costs were assumed and one
additional cam phasing system yielding an incremental cost including a
1.5 RPE factor of $373.
    For fuel economy effectiveness, NHTSA estimated in the NPRM that
the incremental gain in fuel consumption for conversion of an OHV
engine with cylinder deactivation and CCP to a DOHC engine with CVVL at
1 to 4 percent, in agreement with the NESCCAF report and confidential
manufacturer data. The fuel consumption benefit for converting an OHV
engine to a DOHC engine with DCP is due largely to friction reduction
according to a confidential manufacturer comment. For the final rule
the upper bound stated in the NPRM was reduced because DCP will give
less improvement than CVVL compared to an engine that already has
cylinder deactivation and CCP applied. NHTSA estimates the incremental
fuel consumption effectiveness at 1 to 2.6 percent independent of the
number of engine cylinders.
    There are no class-specific applications of this technology. In the
NPRM, NHTSA proposed raising the phase-in cap to 20 percent per year,
but has concluded for the final rule that a 9 percent phase-in cap for
MY 2011 is more consistent with manufacturers' comments. No comments
were received regarding phase-in rates of converting OHV engines to
DOHC. The conversion from OHV to DOHC engine architecture with DCP is a
major engine redesign that can be applied at redesign model years only
with time-based learning applied.
(ix) Stoichiometric Gasoline Direct Injection (SGDI)
    In gasoline direct injection (GDI) engines, fuel is injected into
the cylinder rather than into the inlet manifold or inlet port. GDI
allows for the compression ratio of the engine to be increased by up to
1.5 units higher than a port-injected engine at the same fuel octane
level. As a result of the higher compression ratio, the thermodynamic
efficiency is improved, which is the primary reason for the fuel
economy effectiveness with stoichiometric DI systems. The compression
ratio increase comes about as a result of the in-cylinder air charge
cooling that occurs

as the fuel, which is sprayed directly into the combustion chamber,
evaporates.
    Volumetric efficiency in naturally-aspirated GDI engines can also
be improved by up to 2 percent, due to charge cooling, which improves
the full load torque. The improved full load torque capability of GDI
engines can have a secondary effect on fuel economy by enabling engine
downsizing, thereby reducing fuel consumption.
    Two operating strategies can be used in gasoline DI engines,
characterized by the mixture preparation strategy. One strategy is to
use homogenous charge where fuel is injected during the intake stroke
with a single injection. The aim is to produce a homogeneous air-fuel-
residual mixture by the time of ignition. In this mode, a
stoichiometric air/fuel ratio can be used and the exhaust
aftertreatment system can be a relatively low cost, conventional three-
way catalyst. Another strategy is to use stratified charge where fuel
is injected late in the compression stroke with single or multiple
injections. The aim here is to produce an overall lean, stratified
mixture, with a rich area in the region of the spark plug to enable
stable ignition. Multiple injections can be used per cycle to control
the degree of stratification. Use of lean mixtures significantly
improves efficiency by reducing pumping work, but requires a relatively
high cost lean NOX trap in the exhaust aftertreatment
system.
    For purposes of this rulemaking, only homogeneous charge
stoichiometric DI systems were considered, due to the anticipated
unavailability of low sulfur gasoline during the time period
considered. This decision was supported by comments from Mercedes,
which sells lean burn DI engines in other world markets, stating that
lean burn DI engines cannot function in the absence of ultra-low sulfur
gasoline. Lean NOX trap technologies require ultra-low
sulfur gasoline to function at high conversion efficiency over the
entire life cycle of a vehicle.
    Gasoline DI systems effectiveness from the increased efficiency of
the thermodynamic cycle. The fuel consumption effectiveness from DI
technology is therefore cumulative to technologies that target pumping
losses, such as the VVT and VVLT technologies. The Sierra Research
report stated that Sierra Research could not determine from the NPRM
decision trees if VVLT technologies were retained when SGDI was
applied. To clarify, as the model progresses through the decision
trees, technologies preceding SGDI are retained in the cumulative
effectiveness and cost.
    In the NPRM, NHTSA estimated the incremental fuel consumption
effectiveness for naturally aspirated SGDI \174\ to be 1 to 2 percent.
The Alliance commented that it estimated 3 percent gains in fuel
efficiency, as well as a 7 percent improvement in torque, which can be
used to mildly downsize the engine and give up to a 5.8 percent
increase in efficiency. Other published literature reports a 3 percent
effectiveness for SGDI,\175\ and another source reports a 5 percent
improvement on the NEDC drive cycle.\176\ Confidential manufacturer
data submitted in response to the NPRM reported an efficiency
effectiveness range of 1 to 2 percent. For the final rule NHTSA has
estimated, following independent review of all the sources referenced
above, the incremental gain in fuel consumption for SGDI to be
approximately 2 to 3 percent.
---------------------------------------------------------------------------

    \174\ SGDI was referred to as GDI or SIDI in the NPRM.
    \175\ Paul Whitaker, Ricardo, Inc., ``Gasoline Engine
Performance and Emissions--Future Technologies and Optimization,''
ERC Symposium, Low Emission Combustion Technologies for Future IC
Engines, Madison, WI, June 8-9, 2005. Available at http://
www.erc.wisc.edu/symposiums/2005_Symposium/June%208%20PM/Whitaker_
Ricardo.pdf (last accessed Nov. 9, 2008).
    \176\ Stefan Trampert, FEV Motorentechnik GmbH, ``Engine and
Transmission Development Trends--Rising Fuel Cost Pushes
Technology,'' Symposium on International Automotive Technology,
Pune, India, January 2007.
---------------------------------------------------------------------------

    Content assumptions for cost estimating of SGDI include no major
changes to engine architecture compared to a port fuel injection
engine, although cylinder head casting changes are required to
incorporate the fuel injection system and the piston must change as
well to suit the revised combustion chamber geometry. The fuel
injection system utilizes an electrically-driven low pressure fuel pump
to feed a high pressure mechanical pump, supplying fuel at pressures up
to 200 Bar. A common fuel rail supplies the injectors, which produce a
highly atomized spray with a Sauter Mean Diameter (SMD) of 15-20
microns, which compares to approximately 50 microns for a port
injector.
    In the NPRM, NHTSA estimated the following incremental cost ranges
for applying SGDI: $122 to $420 for an inline 4-cylinder engine, $204
to $525 for a V6 engine, and $228 to $525 for a V8 engine. The Alliance
commented that NHTSA had not accounted for the costs required to
address NVH concerns associated with the implementation of SGDI. For
purposes of the final rule, all costs have been based upon side mount
DI technology as these costs were determined in the 2008 Martec Report
to be lower than center mount DI systems. An applied RPE factor of 1.5
was used in all cases, and a NVH package was added to all engines in
response to Alliance comments, providing incremental costs that ranged
from $293 to $440 for an I4 engine, to $384 to $558 for a V6 engine and
$512 to $744 for a V8 engine.
    Homogeneous, stoichiometric DI systems are regarded as mature
technology with minimal technical risk and are expected to be
increasingly incorporated into manufacturers' product lineups. Time-
based learning has been applied to this technology due to the fact that
over 1.5 million vehicles containing this technology are now produced
annually. Due to the changes to the cylinder head and combustion system
and the control system development required to adopt SGDI technology,
which are fairly extensive, SGDI can be applied only at redesign model
years. There are no limitations on applying SGDI to any vehicle class.
The phase-in cap for SGDI is applied at a 3 percent rate for MY 2011 in
order to account for the lead time required to incorporate SGDI
engines.
(x) Combustion Restart (CBRST)
    Combustion restart allows ``start-stop'' functionality of DI
engines through the implementation of an upgraded starter with bi-
directional rotation to allow precise crankshaft positioning prior to
subsequent fuel injection and spark ignition, allowing engine restart.
This method of implementing engine stop/start functionality allows not
only the fuel savings from not idling the engine, but also reduces fuel
consumption as the engine speeds up to its operational speed. A Direct
Injection (DI) fuel system is required for implementation of this
technology.
    NHTSA has determined, upon independent review, combustion restart
to be a high technical risk due to the following unresolved issues.
First, very high or very low ambient air temperatures may limit the
ability to start the engine in the described manner. Although the
starter motor can provide fail-safe starting capability in these
temperature limited areas, strategies must be developed to manage the
transitions. Additionally, a fail-safe start strategy that recognizes
failed attempts and responds quickly enough has yet to be demonstrated.
The risk of missed start events is currently relatively high, which is
unacceptable from a production implementation perspective. As a result,
availability of this technology was assessed as beyond the emerging
technology time frame for purposes of this MY 2011 rulemaking.

(xi) Turbocharging and Downsizing (TRBDS)
    Forced induction in the form of turbocharging and supercharging has
been used on internal combustion engines for many years. Their
traditional role has been to provide enhanced performance for high-end
or sports car applications. However, turbocharging and downsizing can
also be used to improve fuel economy. There is a natural friction
reduction with a boosted downsized engine, because engine friction
torque is primarily a function of engine displacement. When comparing
FMEP (Friction Mean Effective Pressure--friction torque normalized by
displacement) there is very little difference between the full size
naturally-aspirated engine and the boosted downsized engine despite the
higher cylinder pressure associated with higher BMEP. Turbocharging and
downsizing can also reduce pumping losses (PMEP), because a
turbocharged downsized engine runs at higher BMEP (Brake Mean Effective
Pressure) levels, and therefore higher manifold pressures, than a
naturally aspirated engine. The upper limit of BMEP level that can be
expected from a naturally aspirated engine is approximately 13.5 Bar,
whereas a turbocharged engine can produce BMEP levels in excess of 20
Bar. Engines that are not downsized and boosted use a throttle to
regulate load, but this causes pumping losses as discussed previously.
Thus, by using a small displacement engine with a turbocharger, the
smaller engine works harder (higher cylinder load), which results in
lower pumping loss since the throttle must be further open to produce
the same road power output.
    Due to the incremental nature of the decision tree, engines having
turbocharging and downsizing applied are assumed to have SGDI already
applied. In boosted engines, SGDI allows improved scavenging of the
cylinder, which reduces the internal exhaust gas residual level and the
charge temperature. This in turn allows a higher compression ratio to
be used for a given fuel octane rating and can therefore improve the
fuel consumption of boosted SGDI engines.
    In most cases, a boosted downsized engine can replace a
conventional naturally aspirated engine and achieve equivalent or
greater (albeit at the expense of fuel economy) power and torque.
However, there are some challenges associated with acceptance of a down
sized boosted engine, including:
     Achievement of ``seamless'' power delivery compared to the
naturally aspirated engine (no perceptible turbo lag);
     A complication in emissions regulatory compliance, because
the addition of a turbocharger causes additional difficulty with
catalyst light off due to the thermal inertia of the turbo itself;
     Potential issue with customer acceptance of smaller-
displacement engines, given a common perception that only larger-
displacement engines can be high-powered; and
     Additional base engine cost and vehicle integration costs.
    Manufacturers' structural changes to the base engine are generally
focused on increasing the structure's capacity to tolerate higher
cylinder pressures. NHTSA believes that it is reasonable to expect that
the maximum cylinder pressure would increase by 25 to 30 percent over
those typical of a naturally aspirated engine. Another consideration is
that higher pressures lead to higher thermal loads.
    One potential disadvantage of downsized and boosted engines is
cost. Turbocharging systems can be expensive and are best combined with
direct injection and other engine technologies. The Alliance expressed
a related concern that the fuel economy effectiveness was based on the
use of premium grade fuel in direct injection turbocharged engines, and
argued that as the baseline vehicles were not fueled with premium
gasoline, this gave the direct injection turbocharged engines an
unrealistic advantage.\177\ However, CARB stated in its comments that
premium fuel is not necessary for use with turbocharged downsized
engines and that substantial effectiveness are still available with
regular fuel.\178\ In fact, most turbocharged direct injection engines
will have a compression ratio and calibration designed to give best
performance on premium fuel, although they are safe to operate on
regular fuel. On regular fuel, the knock sensor output is used to allow
the ECU to keep the engine safe by controlling boost and ignition
timing. Maximum torque is reduced on the lower octane fuel due to the
ECU intervention strategy, but at part load, where knock is not an
issue, the fuel economy will not be affected adversely relative to the
estimated effectiveness. Additionally, the driver retains the choice of
obtaining more performance by paying more for premium fuel and will
still obtain stated fuel consumption effectiveness.
---------------------------------------------------------------------------

    \177\ Docket No. NHTSA-2008-0089-0179.1.
    \178\ Docket No. NHTSA-2008-0089-0173.
---------------------------------------------------------------------------

    Nevertheless, the case for using downsized boosted engines has
strengthened with the wider introduction of direct injection gasoline
engines. Downsized boosted engines with stoichiometric direct injection
present minimal technical risk, although there have been only limited
demonstrations of this technology achieving SULEV emission levels.
    In the NPRM, NHTSA estimated that downsized and turbocharged
engines could incrementally reduce fuel consumption from 5 to 7.5
percent. CARB commented that Sierra Research in its presentation to the
NAS committee on January 24, 2008, suggested there is no carbon dioxide
reduction potential for turbocharging and downsizing, but argued that
this is not supported by other vehicle simulation efforts nor by
manufacturer plans to release systems such as the Ford EcoBoost.\179\
The Alliance and Sierra Research, in contrast, commented that
turbocharged and downsized engines do not improve fuel economy unless
they are also equipped with DI fuel systems and using premium
fuel.\180\ NHTSA believes that turbocharging and downsizing, when
combined with SGDI, offers benefits without the use of premium fuel as
noted above. Confidential manufacturer data suggests an incremental
range of fuel consumption reduction of 4.8 to 7.5 percent for
turbocharging and downsizing. Other publicly-available sources suggest
a fuel consumption benefit of 8 to 13 percent compared to current-
production naturally-aspirated engines without friction reduction or
other fuel economy technologies: A joint technical paper by Bosch and
Ricardo suggesting an EPA fuel economy gain of 8 to 10 percent for
downsizing from a 5.7 liter port injection V8 to a 3.6 liter V6 with
direct injection; \181\ a Renault report suggesting a 11.9 percent NEDC
fuel consumption gain for downsizing from a 1.4 liter port injection
in-line 4-cylinder engine to a 1.0 liter in-line 4-cylinder engine with
direct injection; \182\ and a Robert Bosch paper suggesting a 13
percent NEDC gain for downsizing to a turbocharged DI engine.\183\
These

reported fuel economy benefits show a wide range in large part due to
the degree of vehicle attribute matching (such as acceleration
performance) that was achieved.
---------------------------------------------------------------------------

    \179\ Docket No. NHTSA-2008-0089-0173.4.
    \180\ Docket No. NHTSA-2008-0089-0046, Docket No. NHTSA-2008-
0089-0179.1.
    \181\ David Woldring and Tilo Landenfeld of Bosch, and Mark J.
Christie of Ricardo, ``DI Boost: Application of a High Performance
Gasoline Direct Injection Concept,'' SAE 2007-01-1410. Available at
http://www.sae.org/technical/papers/2007-01-1410 (last accessed Nov.
9, 2008).
    \182\ Yves Boccadoro, Lo[iuml]c Kermanac'h, Laurent Siauve, and
Jean-Michel Vincent, Renault Powertrain Division, ``The New Renault
TCE 1.2L Turbocharged Gasoline Engine,'' 28th Vienna Motor
Symposium, April 2007.
    \183\ Tobias Heiter, Matthias Philipp, Robert Bosch, ``Gasoline
Direct Injection: Is There a Simplified, Cost-Optimal System
Approach for an Attractive Future of Gasoline Engines?'' AVL Engine
& Environment Conference, September 2005.
---------------------------------------------------------------------------

    For purposes of the final rule, NHTSA estimated a net fuel
consumption reduction of approximately 14 percent for a turbocharged
downsized DOHC engine with direct injection and DCP over a baseline
fixed-valve engine that does not incorporate friction reducing
technologies. This equates to an incremental fuel consumption reduction
of 2.1 to 5.2 percent for TRBDS, which is incremental to an engine with
SGDI and previously applied technologies (e.g., VVT and VVL) as defined
by the decision tree. This wide range is dependent upon the decision
tree path that is followed or the configuration of the engine prior to
conversion to TRBDS. The incremental fuel consumption benefit for TRBDS
is estimated to range from 2.1 to 2.2 percent for V6 and V8 engines and
from 4.5 to 5.2 percent for inline 4-cylinder engines. As explained,
the incremental improvement from TRBDS must be added to the previous
technology point on the decision tree. In the case of SOHC and OHV
engines, for example, moving to the TRBDS technology also assumes
implementation of DOHC engine architecture in addition to DCP and SGDI.
    In the NPRM, NHTSA estimated that the cost for a boosted/downsized
engine system would be $690 for small cars, $810 for large trucks, and
$120 for all other vehicle classes, based on the NAS report, the EEA
report, and confidential manufacturer data, which assumed downsizing
allowed the removal to two cylinders in most cases, except for small
cars and large trucks. CARB questioned Martec's cost estimates for
turbocharging and downsizing, specifically the credit for downsizing a
V6 engine to an in-line 4 cylinder dropped from their estimate used in
the NESCCAF report of $700 to $310 and the use of more expensive
hardware than some manufacturers use. In response, NHTSA's independent
review of the cost to downsize a V6 DOHC engine to a I4 DOHC engine
closely aligned with the 2008 Martec credit of $310, while the report
for NESCCAF was not specific with regard to the assumptions used to
construct that estimate. Additionally, confidential manufacturer data
submitted in response to the NPRM provided a range for TRBDS with SGDI
of $600 to $1,400 variable cost or $900 to $2,100 RPE assuming a 1.5
markup factor. When comparing the confidential manufacturer cost range
and the incremental RPE cost estimates for the final rule, it is
important to realize the incremental cost for TRBDS does not include
SGDI since it is considered a separate technology.\184\
---------------------------------------------------------------------------

    \184\ NHTSA also examined the Jetta TDI as an example of a
current vehicle model that comes in both diesel and gasoline-engine
form, but in attempting to do an apples-to-apples comparison with
the non-turbocharged/downsized version, the SE, found indications
that VW appears to be keeping the cost of the TDI down by removing
other content (e.g., the SE has a sunroof, which normally costs
around $1,000, while the TDI does not). Thus, NHTSA did not find
VW's price differential for the two versions of the Jetta to be
convincing evidence of the actual cost of turbocharging and
downsizing an engine.
---------------------------------------------------------------------------

    Some of the costs included in turbocharging and downsizing come
from structural changes due to the higher cylinder pressures and
increased cylinder temperatures, which also drive additional cooling
requirements (e.g. water-cooled charge air cooler, circulation pump,
and thermostats) and require improved exhaust valve materials. High
austenitic stainless steel exhaust manifolds and upgraded main bearings
are some of the other hardware upgrades required. For purposes of the
final rule, NHTSA used cost data from the 2008 Martec report, but
constructed a bill of materials consistent with the incremental TRBDS
technology as shown in the decision trees and based on confidential
manufacturer data. For the vehicle subclasses which have a baseline
gasoline V8 engine, two turbochargers rated for 1050 [deg]C at $250
each were added, $270 was deducted for downsizing to a V6 from a V8
engine, $217 was added for engine upgrades to handle higher operating
pressures and temperatures at, and a water-cooled charge air cooler was
added at $280. The baseline SOHC engine was converted to a DOHC engine
with 4 valves per cylinder at a variable incremental cost of $92. The
total variable costs summed to $819 and a 1.5 RPE factor was applied to
arrive at $1,229 incremental cost to turbocharging and downsizing.
    For the vehicle subclasses which have a baseline gasoline V6
engine, a twin-scroll turbocharger rated for 1050 [deg]C was added at a
cost of $350, $310 was deducted for downsizing to an I4 from a V6
engine, $160 was added for engine upgrades to handle higher operating
pressures and temperatures, and a water-cooled charge air cooler was
added at $259. The baseline SOHC engine was converted to a DOHC engine
with 4 valves per cylinder at a variable incremental cost of $87. The
total variable costs summed to $548 and a 1.5 RPE factor was applied to
arrive at $822 incremental cost to turbocharging and downsizing.
    For the vehicle subclasses which have a baseline gasoline I4
engine, a twin-scroll turbocharger rated for 1050 [deg]C was added at a
cost of $350, $160 was added for engine upgrades to handle higher
operating pressures and temperatures, and a water-cooled charge air
cooler was added at $259. The baseline SOHC engine was converted to a
DOHC engine with 4 valves per cylinder at a variable incremental cost
of $46. The total variable costs summed to $815 and a 1.5 RPE factor
was applied to arrive at $1,223 incremental cost for turbocharging and
downsizing.
    In summary, for the final rule NHTSA estimated TRBDS to have an
incremental RPE cost of $1,223 for vehicle classes with a baseline in-
line 4-cylinder engine downsized to a smaller I-4 engine which are:
Subcompact, Performance Subcompact, Compact and Midsize Car, and Small
Truck. For vehicle classes with a baseline V6 engine that was downsized
to an I4 engine the RPE cost is estimated at $822; these classes are
the Performance Compact, Performance Midsize and Large Car, Minivan and
Midsize Truck. The two vehicle classes with baseline V8 engines,
Performance Large Car and Large Truck, were downsized to V6
turbocharged engines at an incremental RPE cost of $1,229.
    Time-based learning has been applied to TRBDS because submitted
product plan data indicated turbocharging and downsizing would already
be at high volume in 2011. Due to the fact that a turbocharged and
downsized engine is entirely different than the baseline engine it can
be applied only at redesign model years. The phase-in cap for TRBDS is
applied at a 9 percent rate for MY 2011 in order to account for the
lead time required to incorporate TRBDS engines.
(xii) Cooled Exhaust Gas Recirculation Boost (EGRB)
    EGR Boost is a combustion concept that involves utilizing EGR as a
charge dilutant for controlling combustion temperatures. Fuel economy
is therefore increased by operating the engine at or near the
stoichiometric air/fuel ratio over the entire speed and load range and
using higher exhaust gas residual levels at part load conditions.
Further fuel economy increases can be achieved by increased compression
ratio enabled by reduced knock sensitivity, which enables higher
thermal efficiency from more advanced spark timing. Currently

available turbo, charge air cooler, and EGR cooler technologies are
sufficient to demonstrate the feasibility of this concept.
    However, this remains a technology with a number of issues that
still need to be addressed and for which there is no production
experience. EGR system fouling characteristics could be potentially
worse than diesel EGR system fouling, due to the higher HC levels found
in gasoline exhaust. Turbocharger compressor contamination may also be
an issue for low pressure EGR systems. Additionally, transient controls
of boost pressure, EGR rate, cam phasers and intake charge temperature
to exploit the cooled EGR combustion concept fully will require
development beyond what has already been accomplished by the automotive
industry. These are all ``implementation readiness'' issues that must
be resolved prior to putting EGR Boost into volume production.
    Because of these issues NHTSA did not consider EGR Boost in the
NPRM, and consequently had no tentative conclusions with regard to its
cost or fuel economy effectiveness. For purposes of the final rule,
NHTSA found no evidence from commenters or elsewhere that these
implementation readiness issues could be resolved prior to MY 2011.
Therefore, in the final rule, the phase-in cap for MY 2011 is zero.
(b) Diesel Engine Technologies
    Diesel engines, which currently make up about 0.27 percent of
engines in the MY 2008 U.S. fleet, have several characteristics that
give them superior fuel efficiency compared to conventional gasoline,
spark-ignited engines. Pumping losses are much lower due to lack of (or
greatly reduced) throttling. The diesel combustion cycle operates at a
higher compression ratio, with a very lean air/fuel mixture, and
turbocharged light-duty diesels typically achieve much higher torque
levels at lower engine speeds than equivalent-displacement naturally-
aspirated gasoline engines. Additionally, diesel fuel has higher energy
content per gallon.\185\
---------------------------------------------------------------------------

    \185\ Burning one gallon of diesel fuel produces about 11
percent more carbon dioxide than gasoline due to the higher density
and carbon to hydrogen ratio.
---------------------------------------------------------------------------

    However, diesel engines, including those on the many diesel
vehicles sold in Europe, have emissions characteristics that present
challenges to meeting federal Tier 2 emissions standards. It is a
significant systems-engineering challenge to maintain the fuel
consumption advantage of the diesel engine while meeting U.S. emissions
regulations, since fuel consumption is negatively impacted by emissions
reduction strategies. Emission compliance strategies for diesel
vehicles sold in the U.S. are expected to include a combination of
combustion improvements and aftertreatment. These emission control
strategies are currently widely used in Europe, but will have to be
modified due to the fact that U.S. emission standards, especially for
NOX, are much tighter than corresponding European standards.
To achieve U.S. Tier 2 emissions limits, roughly 45 to 65 percent more
NOX reduction is required compared to the Euro VI standards.
Additionally, as discussed below, there may be a fuel consumption
penalty associated with diesel aftertreatment since extra fuel is
needed for the aftertreatment, subsequently this extra fuel is not used
in the combustion process of the engine that provides torque to propel
the vehicle.
    Nevertheless, emissions control technologies do exist, and will
enable diesel engines to make considerable headway in the U.S. fleet in
coming years. Several key advances in diesel technology have made it
possible to reduce emissions coming from the engine prior to
aftertreatment. These technologies include improved fuel systems
(higher pressures and more responsive injectors), advanced controls and
sensors to optimize combustion and emissions performance, higher EGR
levels and EGR cooling to reduce NOX, lower compression
ratios, and advanced turbocharging systems.
    The fuel systems on advanced diesel engines are anticipated to be
of a High-Pressure Common Rail (HPCR) type with piezoelectric injectors
that operate at pressures up to 1800 Bar or greater and provide fast
response to allow multiple injections per cycle. The air systems will
include a variable geometry turbocharger for 4-cylinder inline engines
with charge-air cooling and high-pressure and low-pressure EGR loops
with EGR coolers. For V-6 or V-8 engines the air systems will employ
series sequential turbo-charging with one variable geometry
turbocharger and one fixed geometry turbocharger.
    As suggested above, the traditional 3-way catalyst aftertreatment
found on gasoline-powered vehicles is ineffective due to the lean-burn
combustion of a diesel. All diesels will require a diesel particulate
filter (DPF), a diesel oxidation catalyst (DOC), and a NOX
reduction strategy to comply with Tier 2 emissions standards. The most
common NOX reduction strategies include the use of lean
NOX traps (LNT) or selective catalytic reduction (SCR),
which are outlined below.
(i) Diesel Engine With Lean NOX Trap (LNT) Catalyst After-
Treatment
    A lean NOX trap operates, in principle, by storing
NOX (NO and NO2) when the engine is running in
its normal (lean) state. When the control system determines (via
mathematical model or a NOX sensor) that the trap is
saturated with NOX, it switches the engine into a rich
operating mode or may in some cases inject fuel directly into the
exhaust stream to produce excess hydrocarbons that act as a reducing
agent to convert the stored NOX to N2 and water,
thereby ``regenerating'' the LNT and opening up more locations for
NOX to be stored. LNTs are sensitive to sulfur deposits that
can reduce catalytic performance, but periodically undergo a
desulfurization engine-operating mode to clean it of sulfur buildup.
    The fuel consumption penalty associated with aftertreatment
systems, including both DPF and LNT, is taken into account in the
reported values. In the case of the DPF, extra fuel is needed to raise
the temperature of the DPF above approximately 550[deg]C to enable
active regeneration. A similar process is needed to regenerate the LNT,
but instead of being used to remove particulates and raise the
temperature, the excess fuel is used to provide a fuel-rich condition
at the LNT to convert the trapped NOX on the LNT to nitrogen
gas. The estimated fuel consumption penalty on the CAFE test cycle
associated with the LNT aftertreatment system is 5 percent on the EPA
city cycle and 3 percent on the highway cycle, as described in the
report to the EPA.\186\
---------------------------------------------------------------------------

    \186\ Ricardo, ``A Study of Potential Effectiveness of Carbon
Dioxide Reducing Vehicle Technologies, Revised Final Report,'' at
62. Available at http://www.epa.gov/otaq/technology/420r08004a.pdf
(last accessed Oct. 4, 2008).
---------------------------------------------------------------------------

    In order to maintain equivalent performance to comparable gasoline-
engine vehicles, an inline 4-cylinder (I-4) diesel engine with
displacement varying around 2 liters to meet vehicle performance
requirements was assumed for Subcompact, Performance Subcompact,
Compact, and Midsize Passenger Car and Small Truck vehicle subclasses,
and it was also assumed that these vehicles would utilize LNT
aftertreatment systems.
    In the NPRM, NHTSA estimated that LNT-based diesels could
incrementally reduce fuel consumption by 8 to 15 percent at an
incremental RPE cost of $1,500 to $1,600 compared to a direct injected
turbocharged and downsized

spark-ignition engine, in agreement with confidential manufacturer
data. These costs were based on a ``bottom up'' cost analysis that was
performed with EPA, which then subtracted the costs of all previous
steps on the decision tree prior to diesel engines.
    Comments submitted in response to the NPRM including both
manufacturers' confidential data and non-confidential data sources for
diesel engines was in the range of 16.7 percent to 26.7 \187\ percent
fuel consumption benefit over a baseline gasoline engine at a variable
cost of $2,000 to $11,200. Confidentially submitted diesel cost and
effectiveness estimates generally did not differentiate between car and
truck applications, engine size and aftertreatement systems leading to
large ranges for both cost and effectiveness estimates. Additionally,
most of the costs appeared to be stated as variable costs not RPE but
this was not always completely discernible.
---------------------------------------------------------------------------

    \187\ The 26.7 percent fuel consumption reduction is a maximum
estimate cited in a June 2008 Sierra Research report (Docket No.
NHTSA-2008-089-0179.1) for a CAFE estimate in a midsize car, whereas
an April 2008 Sierra report (Docket No. NHTSA-2008-089-0046) cites a
maximum estimate of 22.4 percent for the same vehicle class; NHTSA
was unable to discern why the estimates differed.
---------------------------------------------------------------------------

    For purposes of the final rule, NHTSA estimated the net fuel
consumption benefit for an I-4 diesel engine with LNT aftertreatment to
be approximately 20 to 26 percent improvement over a baseline gasoline
engine. This equates to a 5.3 to 7.7 percent improvement for DSLT,
which is incremental to a turbocharged downsized gasoline engine
(TRBDS) with EGRB, and a 15.0 to 15.3 percent incremental improvement
for DSLC, which is incremental to a gasoline engine with combustion
restart (CBRST). The 2008 Martec report was relied upon for cost
estimates and the diesel cost was adjusted by removing the downsizing
credit and applying a 1.5 RPE marked up factor to arrive at a cost of
$4007 compared to a baseline gasoline engine. This results in an
incremental RPE cost of $1,567 to $1,858 for DSLT and $2,963 to $3,254
for DSLC. NHTSA's independent review concurred with all the costs in
this bill-of-material-based cost analysis.
    A large part of the explanation for the cost increase since the
NPRM is the dramatic increase in commodity costs for the aftertreatment
systems, namely the platinum group metals. The updated cost estimates
of Martec 2008 and others reflect the rise of global costs for raw
materials since Martec 2004 and other prior referenced cost estimates
were conducted. As described in Martec 2008, engine technologies
employing high temperature steels or catalysts with considerable
platinum group metals usage have experienced tremendous inflation of
raw material prices. These updated estimates account for current spot
prices of platinum and rhodium which have demonstrated cost inflation
amounting to between 300 and 750 percent of global prices.\188\
---------------------------------------------------------------------------

    \188\ Martec, ``Variable Costs of Fuel Economy Technologies,''
June 1, 2008, at 13-20. Docket No. NHTSA-2008-0089-0169.1.
---------------------------------------------------------------------------

(ii) Diesel Engine With Selective Catalytic Reduction (SCR) After-
Treatment
    An SCR aftertreatment system uses a reductant (typically, ammonia
derived from urea) that is continuously injected into the exhaust
stream ahead of the SCR catalyst. Ammonia combines with NOX
in the SCR catalyst to form N2 and water. The hardware
configuration for an SCR system is more complicated than that of an
LNT, due to the onboard urea storage and delivery system (which
requires a urea pump and injector into the exhaust stream). While a
rich engine-operating mode is not required for NOX
reduction, the urea is typically injected at a rate of 3 to 4 percent
of the fuel consumed. Manufacturers designing SCR systems intend to
align urea tank refills with standard maintenance practices such as oil
changes.
    The fuel consumption penalty associated with the SCR aftertreatment
system is taken into account in the values reported here. Similar to
the LNT system, extra fuel is needed to warm up the SCR system to an
effective operating temperature. The estimated fuel consumption penalty
on the CAFE test cycle associated with the SCR aftertreatment system is
5 percent on the EPA city cycle and none on the highway cycle, as
described in the report to the EPA.\189\ A recent report, however,
suggests a fuel economy benefit associated with the use of a SCR
system, based on the supposition that the engine calibration is shifted
towards improved fuel consumption and more of the NOX
reduction is being handled by the SCR system.\190\ Nevertheless, since
this benefit is not yet proven for high-volume production, it has not
been applied for purposes of the final rule.
---------------------------------------------------------------------------

    \189\ Ricardo, ``A Study of Potential Effectiveness of Carbon
Dioxide Reducing Vehicle Technologies, Revised Final Report,'' at
62. Available at http://www.epa.gov/otaq/technology/420r08004a.pdf
(last accessed Oct. 4, 2008).
    \190\ Timothy V. Johnson, ``Diesel Emission Control in Review,''
Society of Automotive Engineers Technical Series, 2008-01-0069,
2008. Available at  http://www.sae.org/technical/papers/2008-01-0069
(last accessed Nov. 9, 2008).
---------------------------------------------------------------------------

    In order to maintain equivalent performance to comparable gasoline-
engine vehicles, a V-6 diesel engine, with displacement varying around
3 liters was assumed for Performance Compact, Performance Midsize,
Large Passenger Car, Minivan, and Midsize Truck. A V-8 diesel engine,
with displacement varying around 4.5 liters to meet vehicle performance
requirements, was assumed for Large Truck and Performance Large Car
vehicle classes. It was also assumed that these classes with V-6 and V-
8 diesel engines utilize SCR aftertreatment systems instead of LNT.
    In the NPRM, NHTSA estimated incremental fuel consumption reduction
for diesel engines with an SCR system to range from 11 to 20 percent at
an incremental RPE cost of $2,051 to $2,411 compared to a direct
injected turbocharged and downsized spark-ignition engine. These costs
were based on a ``bottom up'' cost analysis that was performed with
EPA, which then subtracted the costs of all previous steps on the
decision tree prior to diesel engines.
    As explained above for LNT, confidential manufacturer and non-
confidential comment data submitted in response to the NPRM for diesel
engines was in the range of 16.7 percent to 26.7 percent fuel
consumption benefit over a baseline gasoline engine at variable cost of
$2,000 to $11,200 with no detail about the aftertreatment, engine size
or application. Additionally, Ricardo's vehicle simulation work for EPA
found an incremental fuel economy benefit of 19 percent for a 4.8L
diesel in a Large Truck.\191\ However, when the baseline 4-speed
automatic transmission shift and torque converter lockup scheduling was
optimized for the diesel engine, an additional 5 percent fuel economy
benefit was obtained to yield an incremental benefit for a diesel of 24
percent. As noted in the report on page 84, however, this does not
represent an optimized result, as only the final packages complete with
all technologies were optimized. Nevertheless, this is a reasonable
estimate for diesel engine fuel economy benefit over a baseline
gasoline engine with coordinated cam phasing (CCP). This estimate did
not have the aftertreatment penalty, however, so applying the 5 percent

penalty associated with diesel oxidation catalyst, diesel particulate
filter, and SCR aftertreatment brings the fuel economy benefit for
diesel engine with aftertreatment down to 19 percent, which is equal to
a 16 percent fuel consumption benefit.
---------------------------------------------------------------------------

    \191\ Ricardo, ``A Study of Potential Effectiveness of Carbon
Dioxide Reducing Vehicle Technologies, Revised Final Report,'' Table
7-9 shows incremental fuel economy and CO2 benfits for
Truck with technology package 11, p. 87. Available at http://
www.epa.gov/otaq/technology/420r08004a.pdf (last accessed Oct. 4,
2008).
---------------------------------------------------------------------------

    For purposes of the final rule, NHTSA estimated the net fuel
consumption benefit for a V-6 diesel engine with SCR aftertreatment to
be approximately 20 to 26 percent improvement over a baseline gasoline
engine. This equates to a 4.0 to 7.7 percent improvement for DSLT,
which is incremental to a turbocharged downsized gasoline engine
(TRBDS) with EGRB, and a 9.9 to 13.1 percent incremental improvement
for DSLC, which is incremental to a gasoline engine with combustion
restart (CBRST.) The 2008 Martec report was relied upon for cost
estimates and the diesel cost was adjusted by removing the downsizing
credit and applying a 1.5 RPE marked up factor to arrive at a cost of
$5,603 compared to a baseline gasoline engine. This results in an
incremental RPE cost of $3,110 to $3,495 for DSLT and $4,105 to $4,490
for DSLC. NHTSA's independent review concurred with all the costs in
this bill-of-material-based cost analysis for V-6 engines.
    NHTSA estimated the net fuel consumption benefit for a V-8 diesel
engine with SCR aftertreatment to be approximately 19 to 25 percent
improvement over a baseline gasoline engine. This equates to a 4.0 to
6.5 percent improvement for DSLT, which is incremental to a
turbocharged downsized gasoline engine (TRBDS) with EGRB, and a 10.0 to
12.0 percent incremental improvement for DSLC, which is incremental to
CBRST. The 2008 Martec report was relied upon for cost estimates and
the diesel cost was adjusted by removing the downsizing credit and
applying a 1.5 RPE marked up factor to arrive at a cost of $7,002
compared to a baseline gasoline engine. This results in an incremental
RPE cost of $3,723 to $4,215 for DSLT and $5,125 to $5,617 for DSLC.
NHTSA's independent review concurred with all the costs in this bill-
of-material-based cost analysis for V-8 engines.
    The diesel engine with SCR has an incremental cost that is
significantly higher for the final rule than the NPRM. NHTSA believes
the increase is explained by the improved accuracy of the final rule
analysis which relied on the updated cost estimates from the 2008
Martec Report as described previously \192\. In addition, comments from
the Alliance suggested that the incremental diesel cost for a midsize
car was $6,198 and $7,581 \193\ for a pickup truck.
---------------------------------------------------------------------------

    \192\ Martec, ``Variable Costs of Fuel Economy Technologies,''
June 1, 2008, at 13-20. Docket No. NHTSA-2008-0089-0169.1.
    \193\ These cost estimates are taken from the April 2008 Sierra
Research report (Docket No. NHTSA-2008-089-0046). A June 2008 Sierra
Research report (Docket No. NHTSA-2008-089-0179.1) contained lower
estimates of $5,947 and $7,271 for the same vehicles; NHTSA was
unable to discern the reason for the difference.
---------------------------------------------------------------------------

    The economic breakeven point for diesel engine aftertreatment
options is based on public information\194\ and on recent discussions
that NHTSA and EPA have had with auto manufacturers and aftertreatment
device manufacturers. NHTSA explained in the NPRM that it had received
strong indications that LNT systems would probably be used on smaller
vehicles while the SCR systems would be used on larger vehicles and
trucks. The economic break-even point between LNT and SCR is dependent
on the quantity of catalyst used, the market price for the metals in
those catalysts, and the cost of the urea injection system. The NPRM
estimated that the breakeven point would occur around 3 liters engine
displacement, based on discussions with auto manufacturers and
aftertreatment device manufacturers. Thus, NHTSA tentatively concluded
that it would be cheaper to manufacture diesel engines smaller than 3
liters with an LNT system, and that conversely, it would be cheaper to
manufacturer diesel engines larger than 3.0 liters with a SCR system.
No comments were submitted to NHTSA regarding the breakeven point
between a LNT and SCR system. However, according to one source of
recently published data the breakeven point occurs between 2.0 to
2.5L.\195\ Considering that continuing developments are being made in
this area and the wide range of precious metal content required, NHTSA
believes that an economic breakeven point of 2 to 3 liters is
reasonable and that other factors will strongly influence which system
is chosen by any given vehicle manufacturer.
---------------------------------------------------------------------------

    \194\ Timothy V. Johnson, ``Diesel Emission Control in Review,''
Diesel Engine-Efficiency and Emissions Research (DEER) Conference,
Detroit, MI, August 20-24, 2006. Available at http://
www1.eere.energy.gov/vehiclesandfuels/pdfs/deer_2006/session2/
2006_deer_johnson.pdf (last accessed Nov. 9, 2008). See also Tim
Johnson, ``Diesel Engine Emissions and Their Control,'' Platinum
Metals Review, 52, at 23-37 (2008). Available at http://
www.platinummetalsreview.com/dynamic/article/view/52-1-23-37 (last
accessed Nov. 9, 2008)
    \195\ Id.
---------------------------------------------------------------------------

    Cummins commented that LNT systems should be considered for more
than just the compact and subcompact vehicles, and stated that a number
of large vehicles and trucks currently use LNT. Cummins argued that a
LNT after-treatment system can be a cost-effective technology on both
small and larger engines. For the final rule, NHTSA assumed the use of
a LNT after-treatment system for three additional vehicle subclasses
compared to the NPRM. However, following the rationale explained in the
preceding paragraph, the SCR type after-treatment system is assumed for
larger vehicle subclasses. As is the case with all technologies in the
analysis, technology application assumptions are based on the general
understanding of what a manufacturer could do in response to meeting
emissions compliance but other manufacturer specific factors will
dictate the actual technology applications.
    In the NPRM, NHTSA assumed a 3 percent phase in rate per year for
diesel technologies. For the final rule, passenger cars, as defined by
the technology class, retained the 3 percent combined (for DSLT and
DSLC) phase-in cap for MY 2011. However, diesel technologies for truck
technology classes were allowed to be applied at a 4 percent combined
(for DSLT and DSLC) phase-in cap for MY 2011 to account for the higher
application rates observed in the submitted product plans and diesel's
favorable characteristics in truck applications. Volume-based learning
was assumed for the NPRM, however, confidential product plans indicated
that this technology would be in high-volume in the 2011 time frame,
thus time-based learning was assumed for the final rule. For the final
rule, diesel technologies can only be applied at redesign, which is
consistent with the NPRM.
(c) Transmission Technologies
    NHTSA has also reconsidered the way it applies transmission
technologies in the Volpe model to obtain increased fuel savings. The
revised decision tree for transmission technologies reflects the fact
that baseline vehicles now include either 4- or 5-speed automatic
transmissions, given that many manufacturers are already employing 5-
speed automatic transmissions or are going directly to 6-speed
automatics.\196\ The decision tree in the final rule also combines
``aggressive shift logic'' and

``early torque converter lockup,'' although the NPRM considered them
separately, because NHTSA concluded upon further review that the two
technologies could be optimized simultaneously due to the fact that
adding both of them primarily required only minor modifications to the
transmission or calibration software. Cost and effectiveness numbers
have also been thoroughly reexamined, as have learning rates and phase-
in caps, based on comments received. The section below describes each
of the transmission technologies considered.
---------------------------------------------------------------------------

    \196\ Confidential product plans indicate that future products
manufactured within the rulemaking period may not go from 4- or 5-
speed transmission, but will instead introduce 6- or 7-speed
automatic transmissions as replacements.
---------------------------------------------------------------------------

(i) Improved Transmission Controls and Externals (IATC)
    During operation, an automatic transmission's controller manages
the operation of the transmission by scheduling the upshift or
downshift, and locking or allowing the torque converter to slip based
on a preprogrammed shift schedule. The shift schedule contains a number
of lookup table functions, which define the shift points and torque
converter lockup based on vehicle speed and throttle position, and
other parameters such as temperature. Aggressive shift logic (ASL) can
be employed in such a way as to maximize fuel efficiency by modifying
the shift schedule to upshift earlier and inhibit downshifts under some
conditions, which reduces engine pumping losses and engine friction as
noted in the gas engine section. Early torque converter lockup \197\ in
conjunction with ASL can further improve fuel economy by locking the
torque converter sooner, thus reducing inherent torque converter
slippage or losses. As discussed above, the NPRM separated these two
technologies, but they are combined for purposes of the final rule
since the calibration software can be optimized for both functions
simultaneously.
---------------------------------------------------------------------------

    \197\ Although only modifications to the transmission
calibration software are considered as part of this technology, very
aggressive early torque converter lock up may require an adjustment
to damper stiffness and hysteresis inside the torque converter.
Internal transmission hardware changes associated with this
technology are addressed in 6/7/8-Speed Automatic Transmission with
Improved Internals section.
---------------------------------------------------------------------------

    Calibrating the transmission shift schedule to improve fuel
consumption reduces the average engine speed and increases the average
engine load, which can lead to a perceptible increase in engine
harshness. The degree to which the engine harshness can be increased
before it becomes noticeable to the driver is strongly influenced by
characteristics of the vehicle, and although it is somewhat subjective,
it always places a limit on how much fuel consumption can be improved
by transmission control changes. The Alliance agreed in its comments
that ASL can be used effectively to reduce throttling losses, but at
the expense of noise-vibration-harshness (NVH) and drivability
concerns. The Alliance also commented that losses in the torque
converter typically make automatic transmissions less efficient than
manual transmissions, and suggested that efficiency can be improved by
mechanically ``locking up'' the torque converter earlier or replacing
the torque converter with a friction clutch of the type used on a
manual transmission. Simply replacing a torque converter with a
friction clutch, however, ignores the torque multiplication that torque
converters provide at vehicle launch.
    In the NPRM, NHTSA estimated that aggressive shift logic could
incrementally reduce fuel consumption by 1 to 2 percent at an
incremental cost of $38 and early torque converter lockup could
incrementally reduce fuel consumption by 0.5 percent at a $30 cost for
the calibration effort. Confidential manufacturer comments suggested
that less aggressive shift logic must be employed on vehicles with low
acceleration reserve, but that a 1-3 percent improvement in fuel
economy was attainable on vehicles with adequate acceleration reserve.
    For the final rule, NHTSA combined aggressive shift logic and early
torque converter lockup into the IATC technology with an effectiveness
estimate of 1.5 to 2.5 percent in agreement with most confidential
manufacturer estimates. As aggressive shift logic and early torque
converter lockup are both achievable with a similar calibration effort,
the incremental cost for improved automatic transmission controls used
the higher value of $38, converted this value to 2007 dollars, and
applied a 1.5 RPE markup factor to arrive at an incremental cost
estimate of $59 for the final rule.
    The IATC technology is considered to be available at the start of
the 2011 model year, and as was the case in the NPRM, NHTSA considers
that it can be applied during a refresh model year since NVH concerns
must be addressed. The technology is applicable to all vehicle
subclasses and NHTSA determined IATC type technologies will be high
volume within the 2011 time frame so time-based learning is assumed,
with a phase-in cap for MY 2011 of 33 percent.
(ii) Automatic 6-, 7- and 8-Speed Transmissions (NAUTO)
    Having more ``speeds'' on a transmission (i.e., having more gear
ratios on the transmission) gives three effects in terms of vehicle
performance and fuel economy. First, more gear ratios allow deeper 1st
and 2nd gear ratios for improved launch performance, or increased
acceleration. Second, a wider ratio spread also offers the ability to
reduce the steps between gear ratios, which allows the engine to
operate closer to optimum speed and load efficiency region. And third,
a reduction in gear ratio step size improves internal transmission
losses by reducing the sliding speeds across the clutches, thus
reducing the viscous drag loss generated between two surfaces rotating
at different speeds. Bearing spin losses are also reduced as the
differential speed across the two bearing surfaces is reduced. This
allows the engine to operate at a reduced load level to improve fuel
economy.
    Although the additional gear ratios improve shift feel, they also
introduce more frequent shifting between gears, which can be perceived
by consumers as bothersome. Additionally, package space limitations
prevent 7- and 8-speed automatics from being applicable to front wheel
drive vehicles.
    Comparison between NPRM and final rule cost and effectiveness
estimates are somewhat complicated by the revisions in the decision
trees and technology assumptions. In the NPRM, NHTSA estimated that 6-,
7- and 8-speed transmissions could incrementally reduce fuel
consumption by 0.5 to 2.5 percent at an incremental cost of $76 to
$187, relative to a 5-speed automatic transmission, a technology not
used in the final rule decision tree, and the incremental cost for a 4-
speed to a 5-speed automatic transmission (again no longer considered
in the final rule) was estimated to be $76 to $167.
    In response to NHTSA's request for information, confidential
manufacturer data projected that 6-speed transmissions could
incrementally reduce fuel consumption by 0 to 5 percent from a baseline
4-speed automatic transmission, while an 8-speed transmission could
incrementally reduce fuel consumption by up to 6 percent from a
baseline 4-speed automatic transmission. The 2008 Martec report
estimated a cost of $323 (RPE adjusted) for converting a 4-speed to a
6-speed transmission and a cost of $638 (RPE adjusted) for converting a
4-speed to an 8-speed transmission. GM has publicly claimed a fuel
economy improvement of up to 4 percent for its

new 6-speed automatic transmissions.\198\ The 2008 EPA Staff Technical
Report found a 4.5 to 6.5 percent fuel consumption improvement for a 6-
speed over a 4-speed automatic transmission.\199\
---------------------------------------------------------------------------

    \198\ General Motors, news release, ``From Hybrids to Six-
Speeds, Direct Injection And More, GM's 2008 Global Powertrain
Lineup Provides More Miles with Less Fuel'' (released Mar. 6, 2007).
Available at http://www.gm.com/experience/fuel_economy/news/2007/
adv_engines/2008-powertrain-lineup-082707.jsp (last accessed Sept.
18, 2008).
    \199\ Page 17, ``EPA Staff Technical Report: Cost and
Effectiveness Estimates of Technologies Used to Reduce Light-duty
Vehicle Carbon Dioxide Emissions'' Environmental Protection Agency,
EPA420-R-08-008, March 2008.
---------------------------------------------------------------------------

    For the final rule, NHTSA estimated that the conversion to a 6-, 7-
and 8-speed transmission (NAUTO) from a 4 or 5-speed automatic
transmission with IATC would have an incremental fuel consumption
benefit of 1.4 percent to 3.4 percent, for all vehicle subclasses. The
2008 Martec report, which quoted high volume, fully learned costs, was
relied on to develop the final rule cost estimates. Subcompact,
Compact, Midsize, Large Car and Minivan subclasses, which are typically
considered normal performance passenger cars, are assumed to utilize a
6-speed automatic transmission only (as opposed to 7 or 8 speeds)
resulting in an incremental RPE cost of $323 from Martec 2008. For
Performance Subcompact, Performance Compact, Performance Midsize,
Performance Large car and Small, Midsize and Large truck, where
performance and or payload/towing may be a larger factor, NHTSA assumed
that 6-, 7- or 8-speed transmissions are applicable thus the
incremental RPE cost range of $323-$638 was established which used the
Martec 2008 six speed cost and 8-speed costs for the estimates.
    This technology will be available from the start of the rulemaking
period. Confidential manufacturer data indicates the widespread use of
6-speed or greater automatic transmissions and introductions into the
fleet occur primarily at vehicle redesign cycles. This prompted NHTSA
to set the phase-in rate at 50 percent for MY 2011, but also to
consider that the technology can only be applied at a redesign cycle,
as opposed to the refresh cycle application of the NPRM. The technology
is determined to be at high volume in the 2011 timeframe, and since
these are mature and stable technologies, time-based learning factors
are applied.
(iii) Dual Clutch Transmissions/Automated Manual Transmissions (DCTAM)
    An automated manual transmission (AMT) is similar in architecture
to a conventional manual transmission, but shifting and launch
functions are performed through hydraulic or electric actuation. There
are two basic types of AMTs, single-clutch and dual-clutch transmission
(DCT), both of which were considered in the NPRM. Upon further
consideration and in response to manufacturer comments to only include
dual-clutch AMTs, single-clutch AMTs are not applied in the analysis
for the final rule.
    Single clutch transmissions exhibit a torque interruption when
changing gears because the clutch has to be disengaged. In a
conventional manual transmission vehicle, the driver has initiated the