minimize any adverse fuel economy effects of those standards.'' \1162\
For example, safety standards that have the effect of increasing
vehicle weight lower vehicle fuel economy capability and thus decrease
the level of average fuel economy that the agency can determine to be
feasible.
---------------------------------------------------------------------------

    \1161\ 42 FR 63184, 63188 (Dec. 15, 1977). See also 42 FR 33534,
33537 (Jun. 30, 1977).
    \1162\ 42 FR 33534, 33537 (Jun. 30, 1977).
---------------------------------------------------------------------------

    The ``other motor vehicle standards'' consideration has thus in
practice functioned in a fashion similar to the provision in EPCA, as
originally enacted, for adjusting the statutorily-specified CAFE
standards for MY 1978-1980 passengers cars.\1163\ EPCA did not permit
NHTSA to amend those standards based on a finding that the maximum
feasible level of average fuel economy for any of those three years was
greater or less than the standard specified for that year. Instead, it
provided that the agency could only reduce the standards and only on
one basis: if the agency found that there had been a Federal standards
fuel economy reduction, i.e., a reduction in fuel economy due to
changes in the Federal vehicle standards, e.g., emissions and safety,
relative to the year of enactment, 1975.
---------------------------------------------------------------------------

    \1163\ That provision was deleted as obsolete when EPCA was
codified in 1994.
---------------------------------------------------------------------------

    The ``other motor vehicle standards'' provision is broader than the
Federal standards fuel economy reduction provision. Although the
effects analyzed to date under the ``other motor vehicle standards''
provision have been negative, there could be circumstances in which the
effects are positive. In the event that the agency encountered such

circumstances, it would be required to consider those positive effects.
For example, if changes in vehicle safety technology led to NHTSA's
amending a safety standard in a way that permits manufacturers to
reduce the weight added in complying with that standard, that weight
reduction would increase vehicle fuel economy capability and thus
increase the level of average fuel economy that could be determined to
be feasible.
    In the wake of Massachusetts v. EPA and of EPA's endangerment
finding, granting of a waiver to California for its motor vehicle GHG
standards, and its own establishment of GHG standards, NHTSA is
confronted with the issue of how to treat those standards under EPCA/
EISA, such as in the context of the ``other motor vehicle standards''
provision. To the extent the GHG standards result in increases in fuel
economy, they would do so almost exclusively as a result of inducing
manufacturers to install the same types of technologies used by
manufacturers in complying with the CAFE standards.
    NHTSA sought comment on whether and in what way the effects of the
California and EPA standards should be considered under EPCA/EISA,
e.g., under the ``other motor vehicle standards'' provision, consistent
with NHTSA's independent obligation under EPCA/EISA to issue CAFE
standards. The Sierra Club commented in response, and stated that ``the
process of joint standard setting with California and EPA carries out
the Mass. v. EPA decision.'' \1164\ Thus, NHTSA believes that further
consideration of this issue is unnecessary.
---------------------------------------------------------------------------

    \1164\ Sierra Club et al., Docket No. EPA-HQ-OAR-2010-0799-9549,
at 10.
---------------------------------------------------------------------------

(4) The Need of the United States To Conserve Energy
    ``The need of the United States to conserve energy'' means ``the
consumer cost, national balance of payments, environmental, and foreign
policy implications of our need for large quantities of petroleum,
especially imported petroleum.'' \1165\ Environmental implications
principally include those associated with reductions in emissions of
criteria pollutants and CO2. A prime example of foreign
policy implications are energy independence and energy security
concerns.
---------------------------------------------------------------------------

    \1165\ 42 FR 63184, 63188 (1977).
---------------------------------------------------------------------------

ii. Fuel Prices and the Value of Saving Fuel
    Projected future fuel prices are a critical input into the economic
analysis of alternative CAFE standards, because they determine the
value of fuel savings both to new vehicle buyers and to society, which
is related to the consumer cost (or rather, benefit) of our need for
large quantities of petroleum. In this rule, NHTSA relies on fuel price
projections from the U.S. Energy Information Administration's (EIA)
Annual Energy Outlook (AEO) 2012 Early Release for this analysis.
Federal government agencies generally use EIA's projections in their
assessments of future energy-related policies. A number of commenters
discussed our use of the AEO in the proposal, generally stating that we
should use a higher price forecast; these comments and NHTSA's response
are discussed fully in Section IV.C.3 above.
iii. Petroleum Consumption and Import Externalities
    U.S. consumption and imports of petroleum products impose costs on
the domestic economy that are not reflected in the market price for
crude petroleum, or in the prices paid by consumers of petroleum
products such as gasoline. These costs include (1) higher prices for
petroleum products resulting from the effect of U.S. oil import demand
on the world oil price; (2) the risk of disruptions to the U.S. economy
caused by sudden reductions in the supply of imported oil to the U.S.;
and (3) expenses for maintaining a U.S. military presence to secure
imported oil supplies from unstable regions, and for maintaining the
strategic petroleum reserve (SPR) to provide a response option should a
disruption in commercial oil supplies threaten the U.S. economy, to
allow the United States to meet part of its International Energy Agency
obligation to maintain emergency oil stocks, and to provide a national
defense fuel reserve. Higher U.S. imports of crude oil or refined
petroleum products increase the magnitude of these external economic
costs, thus increasing the true economic cost of supplying
transportation fuels above the resource costs of producing them.
Conversely, reducing U.S. imports of crude petroleum or refined fuels
or reducing fuel consumption can reduce these external costs. A number
of commenters raised the issue of petroleum consumption and import
externalities; these comments and NHTSA's response are discussed fully
in Section IV.C.3 above.
iv. Air Pollutant Emissions
    While reductions in domestic fuel refining and distribution that
result from lower fuel consumption will reduce U.S. emissions of
various pollutants, additional vehicle use associated with the rebound
effect \1166\ from higher fuel economy will increase emissions of these
pollutants. Thus, the net effect of stricter CAFE standards on
emissions of each pollutant depends on the relative magnitudes of its
reduced emissions in fuel refining and distribution, and increases in
its emissions from vehicle use.\1167\ Fuel savings from stricter CAFE
standards also result in lower emissions of CO2, the main
greenhouse gas emitted as a result of refining, distribution, and use
of transportation fuels. Reducing fuel consumption reduces carbon
dioxide emissions directly, because the primary source of
transportation-related CO2 emissions is fuel combustion in
internal combustion engines. A number of commenters noted this point as
well, and cited the agencies' estimates of the considerable GHG-
reducing benefits of the proposed standards.
---------------------------------------------------------------------------

    \1166\ The ``rebound effect'' refers to the tendency of drivers
to drive their vehicles more as the cost of doing so goes down, as
when fuel economy improves.
    \1167\ See Section IV.G below for NHTSA's evaluation of this
effect.
---------------------------------------------------------------------------

    NHTSA has considered environmental issues, both within the context
of EPCA and the National Environmental Policy Act, in making decisions
about the setting of standards from the earliest days of the CAFE
program. As courts of appeal have noted in three decisions stretching
over the last 20 years,\1168\ NHTSA defined the ``need of the Nation to
conserve energy'' in the late 1970s as including ``the consumer cost,
national balance of payments, environmental, and foreign policy
implications of our need for large quantities of petroleum, especially
imported petroleum.'' \1169\ In 1988, NHTSA included climate change
concepts in its CAFE notices and prepared its first environmental
assessment addressing that subject.\1170\ It cited concerns about
climate change as one of its reasons for limiting the extent of its
reduction of the CAFE standard for MY 1989 passenger cars.\1171\ Since
then, NHTSA has considered the benefits of reducing tailpipe carbon
dioxide emissions in its fuel economy rulemakings pursuant to the
statutory requirement to consider

the nation's need to conserve energy by reducing fuel consumption.
---------------------------------------------------------------------------

    \1168\ Center for Auto Safety v. NHTSA, 793 F.2d 1322, 1325 n.
12 (D.C. Cir. 1986); Public Citizen v. NHTSA, 848 F.2d 256, 262-3 n.
27 (D.C. Cir. 1988) (noting that ``NHTSA itself has interpreted the
factors it must consider in setting CAFE standards as including
environmental effects''); and Center for Biological Diversity v.
NHTSA, 538 F.3d 1172 (9th Cir. 2007).
    \1169\ 42 FR 63184, 63188 (Dec. 15, 1977).
    \1170\ 53 FR 33080, 33096 (Aug. 29, 1988).
    \1171\ 53 FR 39275, 39302 (Oct. 6, 1988).
---------------------------------------------------------------------------

v. Other Factors Considered by NHTSA
    The agency historically has considered the potential for adverse
safety consequences in setting CAFE standards. This practice is
recognized approvingly in case law. As the courts have recognized,
``NHTSA has always examined the safety consequences of the CAFE
standards in its overall consideration of relevant factors since its
earliest rulemaking under the CAFE program.'' Competitive Enterprise
Institute v. NHTSA, 901 F.2d 107, 120 n. 11 (DC Cir. 1990) (``CEI I'')
(citing 42 FR 33534, 33551 (June 30, 1977)). The courts have
consistently upheld NHTSA's implementation of EPCA in this manner. See,
e.g., Competitive Enterprise Institute v. NHTSA, 956 F.2d 321, 322 (DC
Cir. 1992) (``CEI II'') (in determining the maximum feasible fuel
economy standard, ``NHTSA has always taken passenger safety into
account.'') (citing CEI I, 901 F.2d at 120 n. 11); Competitive
Enterprise Institute v. NHTSA, 45 F.3d 481, 482-83 (DC Cir. 1995)
(``CEI III'') (same); Center for Biological Diversity v. NHTSA, 538
F.3d 1172, 1203-04 (9th Cir. 2008) (upholding NHTSA's analysis of
vehicle safety issues associated with weight in connection with the MY
2008-11 light truck CAFE rule). Thus, in evaluating what levels of
stringency would result in maximum feasible standards, NHTSA assesses
the potential safety impacts and considers them in balancing the
statutory considerations and to determine the maximum feasible level of
the standards.
    Under the universal or ``flat'' CAFE standards that NHTSA was
previously authorized to establish, manufacturers were encouraged to
respond to higher standards by building smaller, less safe vehicles in
order to ``balance out'' the larger, safer vehicles that the public
generally preferred to buy, which resulted in a higher mass
differential between the smallest and the largest vehicles, with a
correspondingly greater risk to safety. Under the attribute-based
standards being established today, that risk is reduced because
building smaller vehicles would tend to raise a manufacturer's overall
CAFE obligation, rather than only raising its fleet average CAFE, and
because all vehicles are required to continue improving their fuel
economy. In prior rulemakings, NHTSA limited the application of mass
reduction in our modeling analysis to vehicles over 5,000 lbs
GVWR,\1172\ but for purposes of today's final standards, NHTSA has
revised its modeling analysis to allow some application of mass
reduction for most types of vehicles, although it is concentrated in
the largest and heaviest vehicles, because we believe that this is more
consistent with how manufacturers will actually respond to the
standards. However, as discussed above, NHTSA does not mandate the use
of any particular technology by manufacturers in meeting the standards.
A number of commenters raised issues related to the potential safety
effects of the CAFE standards and on the agency's approach to mass
reduction. More information on the approach to modeling manufacturer
use of mass reduction is available in Chapter 3 of the Joint TSD and in
Chapter V of the FRIA; and the estimated safety effects that may be due
to the final MY 2017-2021 CAFE standards and augural MY 2022-2025 CAFE
standards are described in Section II.G above and Section IV.G below.
---------------------------------------------------------------------------

    \1172\ See 74 FR 14396-14407 (Mar. 30, 2009).
---------------------------------------------------------------------------

vi. Factors That NHTSA Is Prohibited From Considering
    EPCA also provides that in determining the level at which it should
set CAFE standards for a particular model year, NHTSA may not consider
the ability of manufacturers to take advantage of several EPCA
provisions that facilitate compliance with the CAFE standards and
thereby reduce the costs of compliance.\1173\ As discussed further
below, manufacturers can earn compliance credits by exceeding the CAFE
standards and then use those credits to achieve compliance in years in
which their measured average fuel economy falls below the standards.
EPCA also provides that manufacturers can increase their CAFE levels
through MY 2019 by producing dual-fueled alternative fuel vehicles.
EPCA provides an incentive for producing these vehicles by specifying
that their fuel economy is to be determined using a special calculation
procedure that results in those vehicles being assigned a high fuel
economy level.
---------------------------------------------------------------------------

    \1173\ 49 U.S.C. 32902(h).
---------------------------------------------------------------------------

    The effect of the prohibitions against considering these statutory
flexibilities in setting the CAFE standards is that the flexibilities
remain voluntarily-employed measures. If the agency were instead to
assume manufacturer use of those flexibilities in setting new
standards, that assumption would result in higher standards and thus
tend to require manufacturers to use those flexibilities. By keeping
NHTSA from including them in our stringency determination, the
provision ensures that the statutory credits described above remain
true compliance flexibilities.
    On the other hand, NHTSA does not believe that flexibilities other
than those expressly identified in EPCA are similarly prohibited from
being included in the agency's determination of what standards would be
maximum feasible. In order to better meet EPCA's overarching purpose of
energy conservation, the agency has therefore considered manufacturers'
ability to increase the calculated fuel economy levels of their
vehicles through A/C efficiency improvements, as finalized by EPA, in
the presented CAFE stringency levels for passenger cars and light
trucks for MYs 2017-2025. NHTSA similarly considers manufacturers'
ability to raise their fuel economy using off-cycle technologies as
potentially relevant to our determination of maximum feasible CAFE
standards, but because we and EPA did not believe that we could
reasonably predict an average amount by which manufacturers will take
advantage of this opportunity, the agencies did not include off-cycle
credits in our stringency determination for the proposal. Since the
proposal, the agencies have developed estimates for the cost and
effectiveness of two off-cycle technologies, active aerodynamics and
stop-start. For the final rule analysis, NHTSA assumed that these two
technologies are available to manufacturers for compliance with the
standards, similar to all of the other fuel economy-improving
technologies that the analysis assumes are available. The costs and
benefits of these technologies are included in the analysis, similar to
all other available technologies, and NHTSA has consequently included
the assessment of some amount of off-cycle credits in the determination
of the maximum feasible standards.
    Additionally, because we interpret the prohibition against
including the defined statutory credits in our determination of maximum
feasible standards as applying only to the flexibilities expressly
identified in 49 U.S.C. 32902(h), NHTSA must, for the first time in
this rulemaking, determine how to consider the fuel economy of dual-
fueled automobiles after the statutory credit sunsets in MY 2019. Once
there is no statutory credit to protect as a compliance flexibility, it
does not seem reasonable to NHTSA to continue to interpret the statute
as prohibiting the agency from setting maximum feasible standards at a
higher level, if possible, by considering the fuel economy of dual-
fueled automobiles as measured by EPA. The overarching purpose of EPCA
is better served by

interpreting 32902(h)(2) as moot once the statutory credits provided
for in 49 U.S.C. 32905 and 32906 have expired.
    49 U.S.C. 32905(b) and (d) state that the special fuel economy
measurement prescribed by Congress for dual-fueled automobiles applies
only ``in model years 1993 through 2019.'' 49 U.S.C. 32906(a) also
provides that the section 32905 calculation will sunset in 2019, as
evidenced by the phase-out of the allowable increase due to that
credit; it is clear that the phase-out of the allowable increase in a
manufacturer's CAFE levels due to use of dual-fueled automobiles
relates only to the special statutory calculation (and not to other
ways of incorporating the fuel economy of dual-fueled automobiles into
the manufacturer's fleet calculation) by virtue of language in section
32906(b), which states that ``in applying subsection (a) [i.e., the
phasing out maximum increase], the Administrator of the Environmental
Protection Agency shall determine the increase in a manufacturer's
average fuel economy attributable to dual fueled automobiles by
subtracting from the manufacturer's average fuel economy calculated
under section 32905(e) the number equal to what the manufacturer's
average fuel economy would be if it were calculated by the formula
under section 32904(a)(1) * * *.'' By referring back to the special
statutory calculation, Congress makes clear that the phase-out applies
only to increases in fuel economy attributable to dual-fueled
automobiles due to the special statutory calculation in sections
32905(b) and (d). Similarly, we interpret Congress' statement in
section 32906(a)(7) that the maximum increase in fuel economy
attributable to dual-fueled automobiles is ``0 miles per gallon for
model years after 2019'' within the context of the introductory
language of section 32906(a) and the language of section 32906(b),
which, again, refers clearly to the statutory credit, and not to dual-
fueled automobiles generally. It would be an unreasonable result if the
phase-out of the credit meant that manufacturers would be effectively
penalized, in CAFE compliance, for building dual-fueled automobiles
like plug-in hybrid electric vehicles, which may be important
``bridge'' vehicles in helping consumers move toward full electric
vehicles.
    NHTSA has therefore considered the fuel economy of plug-in hybrid
electric vehicles, which are the only dual-fueled automobiles that we
predict in significant numbers in MY 2020 and beyond; E85-capable FFVs
are not predicted in great numbers after the statutory credit sunsets,
and we do not have sufficient information about potential dual-fueled
CNG/gasoline vehicles to make reasonable estimates now of their numbers
in that time frame in determining the maximum feasible level of the MY
2020-2025 CAFE standards for passenger cars and light trucks.
vii. Determining the Level of the Standards by Balancing the Factors
    As discussed further below in Section IV.F, NHTSA has broad
discretion in balancing the above factors in determining the
appropriate levels of average fuel economy at which to set the CAFE
standards for each model year. Congress ``specifically delegated the
process of setting * * * fuel economy standards with broad guidelines
concerning the factors that the agency must consider.'' \1174\ The
breadth of those guidelines, the absence of any statutorily prescribed
formula for balancing the factors and other considerations, the fact
that the relative weight to be given to the various factors may change
from rulemaking to rulemaking as the underlying facts change, and the
fact that the factors may often be conflicting with respect to whether
they militate toward higher or lower standards give NHTSA broad
discretion to decide what weight to give each of the competing policies
and concerns and then determine how to balance them. The exercise of
that discretion is subject to the need to ensure that NHTSA's balancing
supports the fundamental purpose of EPCA, energy conservation,\1175\ as
long as that balancing reasonably accommodates ``conflicting policies
that were committed to the agency's care by the statute.'' \1176\ The
balancing of the factors in any given rulemaking depends highly on the
factual and policy context of that rulemaking and the agency's
assumptions about the factual and policy context during the time frame
covered by the standards at issue. Given the changes over time in facts
bearing on assessment of the various factors, such as those relating to
economic conditions, fuel prices, and the state of climate change
science, the agency recognizes that what was a reasonable balancing of
competing statutory priorities in one rulemaking may or may not be a
reasonable balancing of those priorities in another rulemaking.\1177\
Nevertheless, the agency retains substantial discretion under EPCA to
choose among reasonable alternatives.
---------------------------------------------------------------------------

    \1174\ Center for Auto Safety v. NHTSA, 793 F.2d 1322, 1341
(C.A.D.C. 1986).
    \1175\ Center for Biological Diversity v. NHTSA, 538 F.3d 1172,
1195 (9th Cir. 2008).
    \1176\ CAS, 1338 (quoting Chevron U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 845).
    \1177\ CBD v. NHTSA, 538 F.3d 1172, 1198 (9th Cir. 2008).
---------------------------------------------------------------------------

    EPCA neither requires nor precludes the use of any type of cost-
benefit analysis as a tool to help inform the balancing process. As
discussed above, while NHTSA used marginal cost-benefit analysis in the
first two rulemakings to establish attribute-based CAFE standards, it
was not required to do so and is not required to continue to do so.
Regardless of what type of analysis is or is not used, considerations
relating to costs and benefits remain an important part of CAFE
standard setting.
    Because the relevant considerations and factors can reasonably be
balanced in a variety of ways under EPCA, and because of uncertainties
associated with the many technological and cost inputs, NHTSA considers
a wide variety of alternative sets of standards, each reflecting a
different balancing of those policies and concerns, to aid it in
discerning the maximum feasible fuel economy levels. Among the
alternatives providing for an increase in the standards in this
rulemaking, the alternatives range in stringency from a set of
standards that increase, on average, 2 percent annually to a set of
standards that increase, on average, 7 percent annually.
viii. Other Standards
(1) Minimum Domestic Passenger Car Standard
    The minimum domestic passenger car standard was added to the CAFE
program through EISA, when Congress gave NHTSA explicit authority to
set universal standards for domestically-manufactured passenger cars at
the level of 27.5 mpg or 92 percent of the average fuel economy of the
combined domestic and import passenger car fleets in that model year,
whichever was greater.\1178\ This minimum standard was intended to act
as a ``backstop,'' ensuring that domestically-manufactured passenger
cars reached a given mpg level even if the market shifted in ways
likely to reduce overall fleet mpg. Congress was silent as to whether
the agency could or should develop similar backstop standards for
imported passenger cars and light trucks. NHTSA has struggled with this
question since EISA was enacted.
---------------------------------------------------------------------------

    \1178\ 49 U.S.C. 32902(b)(4).
---------------------------------------------------------------------------

    NHTSA proposed minimum standards for domestically-manufactured
passenger cars in Section IV.E of the NPRM, but we also sought

comment on whether to consider, for the final rule, the possibility of
minimum standards for imported passenger cars and light trucks. NHTSA
stated that although we were not proposing such standards, it may be
prudent to explore this concept again given the considerable amount of
time between now and 2017-2025 (particularly the later years), and the
accompanying uncertainty in our market forecast and other assumptions,
that might make such minimum standards relevant to help ensure that
currently-expected fuel economy improvements occur during that time
frame. To help commenters' consideration of this question, Section IV.E
presented illustrative levels of minimum standards for those other
fleets.
    In the MY 2011 final rule, having received comments split fairly
evenly between support and opposition to additional backstop standards,
NHTSA noted Congress' silence with respect to minimum standards for
imported passenger cars and light trucks and ``accept[ed] at least the
possibility that * * * [it] could be reasonably interpreted as
permissive rather than restrictive,'' but concluded, based on the
record for that rulemaking as a whole, that additional minimum
standards were not necessary for MY 2011, given the lack of leadtime
for manufacturers to change their MY 2011 vehicles, the apparently-
growing public preference for smaller vehicles, and the anti-
backsliding characteristics of the footprint-based curves.\1179\
---------------------------------------------------------------------------

    \1179\ 74 FR 14412 (Mar. 30, 2009).
---------------------------------------------------------------------------

    In the MYs 2012-2016 final rule where NHTSA declined to set minimum
standards for imported passenger cars and light trucks, the agency did
so not because we believed that we did not have authority to do so, but
because we believed that our assumptions about the future fleet mix
were reliable within the rulemaking time frame, and that backsliding
was very unlikely and would not be sufficient to warrant the regulatory
burden of additional minimum standards for those fleets.\1180\ NHTSA
also expressed concern about the possibility of additional minimum
standards imposing inequitable regulatory burdens of the kind that
attribute-based standards sought to avoid, stating that:
---------------------------------------------------------------------------

    \1180\ 75 FR 25324, at 25368-70 (May 7, 2010).

    Unless the backstop was at a very weak level, above the high end
of this range, then some percentage of manufacturers would be above
the backstop even if the performance of the entire industry remains
fully consistent with the emissions and fuel economy levels
projected for the final standards. For these manufacturers and any
other manufacturers who were above the backstop, the objectives of
an attribute-based standard would be compromised and unnecessary
costs would be imposed. This could directionally impose increased
costs for some manufacturers. It would be difficult if not
impossible to establish the level of a backstop standard such that
costs are likely to be imposed on manufacturers only when there is a
failure to achieve the projected reductions across the industry as a
whole. An example of this kind of industry-wide situation could be
when there is a significant shift to larger vehicles across the
industry as a whole, or if there is a general market shift from cars
to trucks. The problem the agencies are concerned about in those
circumstances is not with respect to any single manufacturer, but
rather is based on concerns over shifts across the fleet as a whole,
as compared to shifts in one manufacturer's fleet that may be more
than offset by shifts the other way in another manufacturer's fleet.
However, in this respect, a traditional backstop acts as a
manufacturer-specific standard.\1181\
---------------------------------------------------------------------------

    \1181\ Id. at 25369.

    NHTSA explained in the NPRM that the agency continued to believe
that the risk of additional minimum standards imposing inequitable
regulatory burdens on certain manufacturers is real, but at the same
time, to recognize that given the time frame of the current rulemaking,
the agency cannot be as certain about the unlikelihood of future market
changes. Depending on the price of fuel and consumer preferences, the
``kind of industry-wide situation'' described in the MYs 2012-2016 rule
could be possible in the 2017-2025 time frame, particularly in the
later years.
    Thus, because the agency did not have sufficient information at the
time of the NPRM regarding what tradeoffs might be associated with
additional minimum standards, specifically, whether the risk of
backsliding during MYs 2017-2025 sufficiently outweighed the
possibility of imposing inequitable regulatory burdens on certain
manufacturers, we sought comment in the NPRM on these issues but did
not propose additional minimum standards. We also sought comment on how
to structure additional minimum standards (e.g., whether they should be
flat or attribute-based, and if the latter, how that would work), and
at what level additional minimum standards should potentially be set.
    Industry commenters opposed the inclusion of additional backstop
standards for imported passenger cars and for light trucks. The
Alliance commented that it disagreed that NHTSA might have authority to
adopt backstop standards for those other fleets, and argued that doing
so would be inconsistent with the principle of attribute-based
standards, because they could ``unduly limit[ ] consumer choice and
hamper[ ] the industry's ability to achieve the goals of continuing the
national program as cost-effectively as possible.'' \1182\ While the
Alliance agreed with NHTSA that future uncertainty could lead to market
shifts, it maintained that the appropriate way to address such issues
was through the future rulemaking to develop final standards for MYs
2022-2025, rather than through adding new regulatory
requirements.\1183\ Daimler \1184\ and Toyota \1185\ made similar
arguments. The UAW neither opposed nor encouraged the adoption of
additional backstop standards, but simply approved of what the agency
had proposed as being consistent with EISA.
---------------------------------------------------------------------------

    \1182\ Alliance, at 87.
    \1183\ Id. at 87-88.
    \1184\ Daimler, at 21.
    \1185\ Toyota, at 6.
---------------------------------------------------------------------------

    Environmental and consumer group commenters, on the other hand,
strongly supported the inclusion of additional backstop standards for
imported passenger cars and light trucks. CBD expressed concern that
without a backstop, manufacturers would be encouraged by the footprint-
based target curves to increase the size of their vehicles and would
take advantage of numerous available flexibilities, and thus undermine
the anticipated fuel economy and GHG gains estimated by the
agencies.\1186\ CBD further stated that the amount of lead time
provided by the agencies in this rulemaking gave manufacturers ample
time to adjust their fleets to obtain lower targets, and argued that
given so much lead time, a backstop could not be unduly burdensome to
industry, because industry would have ample time to adjust to the new
requirements.\1187\ CBD insisted that NHTSA determine whether or not to
adopt a backstop based on the four statutory factors of technological
feasibility, economic practicability, the effect of other motor vehicle
standards of the Government on fuel economy, and the need of the nation
to conserve energy.\1188\ The Sierra Club \1189\ and NRDC expressed
similar concerns; NRDC recommended that NHTSA ``adopt manufacturer-
specific backstops on the combined car and light truck standards that
that bar an individual automaker from exceeding its forecast * * * fuel
economy levels by

approximately 0.5 mpg,'' allowing a manufacturer ``no more than three
years to make up any exceedance in its manufacturer-specific backstop
standard.'' \1190\ UCS and Consumers Union, in contrast, suggested that
a backstop include ``an automatic re-computation or `ratchet' of
stringencies for subsequent years,'' so that total anticipated oil
savings are fully achieved in 2025 regardless of outcomes in earlier
years.\1191\ All of the commenters supporting additional backstop
standards strongly urged NHTSA to revisit this question as part of its
future rulemaking to develop final standards for MYs 2022-2025.
---------------------------------------------------------------------------

    \1186\ CBD, at 18-19.
    \1187\ Id.
    \1188\ Id., citing CBD v. NHTSA, 538 F.3d at 1206.
    \1189\ Sierra Club, at 5-6.
    \1190\ NRDC, at 17.
    \1191\ UCS, at 8; Consumers Union, at 7.
---------------------------------------------------------------------------

    As proposed, the agency will not be establishing any additional
backstop standards as part of this final rule. We continue to agree
with the environmental and consumer group commenters that we have
authority to adopt additional backstop standards if we deem it
appropriate to do so. However, we also continue to conclude that
insufficient time has passed in which manufacturers have been subject
to the attribute-based standards to assess whether or not backstops
would in fact help ensure that fuel savings anticipated by the agency
at the time of the final rule are met, and even if they did, whether
the benefits of that insurance outweigh potential impacts consumer
choice that could occur by heading down the road that Congress rejected
when it required CAFE standards to be attribute-based. If we determined
that backstops for imported passenger cars and light trucks were
necessary, it would be because consumers are choosing different (likely
larger) vehicles in the future than the agencies assumed in this
rulemaking analysis. Imposing additional backstop standards for those
fleets would require manufacturers to build vehicles which the majority
of consumers (under this scenario) would presumably not want. Vehicles
that cannot be sold are the essence of economic impracticability, and
vehicles that do not sell cannot save fuel or reduce emissions, because
they are not on the roads, and thus do not meet the need of the nation
to conserve fuel.
    On the other hand, based on the assumptions underlying the analysis
for this rulemaking, consumers will experience significant benefits as
a result of buying the vehicles manufactured to meet these standards.
We have no reason to expect that consumers will turn a blind eye to
these benefits, and recent trends indicate that fuel economy is rising
in importance as a factor in vehicle purchasing decisions. We thus
conclude, for purposes of this final rule, that imposing additional
backstop standards for imported passenger cars and light trucks would
be premature. As stated in the NPRM, NHTSA will continue to monitor
vehicle sales trends and manufacturers' response to the standards, and
we will revisit this issue as part of the future rulemaking to develop
final standards for MYs 2022-2025.
(2) Alternative standards for certain manufacturers
    Because EPCA states that standards must be set for ``* * *
automobiles manufactured by manufacturers,'' \1192\ and because
Congress provided specific direction on how small-volume manufacturers
could obtain exemptions from the passenger car standards, NHTSA has
long interpreted its authority as pertaining to setting standards for
the industry as a whole. Prior to the NPRM, some manufacturers raised
with NHTSA the possibility of NHTSA and EPA setting alternate standards
for part of the industry that met certain (relatively low) sales volume
criteria--specifically, that separate standards be set so that
``intermediate-size,'' limited-line manufacturers do not have to meet
the same levels of stringency that larger manufacturers have to meet
until several years later. These manufacturers argued that the same
level of standards would not be technologically feasible or
economically practicable in the same time frame for them, due to their
inability to spread compliance burden across a larger product lineup,
and difficulty in obtaining fuel economy-improving technologies quickly
from suppliers. NHTSA sought comment in the NPRM on whether or how
EPCA, as amended by EISA, could be interpreted to allow such alternate
standards for certain parts of the industry.
---------------------------------------------------------------------------

    \1192\ 49 U.S.C. 32902(b)(1)(A) and (B).
---------------------------------------------------------------------------

    Two commenters, Daimler and Volkswagen, requested that both NHTSA
and EPA consider allowing manufacturers to meet an ``alternate
stringency pathway'' for the passenger car standards. Both defined the
alternate pathway in terms of a ``slower ramp-up'' in stringency, with
lower increases in stringency in early years and higher increases in
later years (which Volkswagen clarified would only occur ``should
technology and market factors make this feasible'').\1193\ The
increases would lead manufacturers who chose this approach to meet the
same rough mpg level in, for example, MY 2021 as the rest of the
manufacturers in the passenger car fleet, but would provide additional
flexibility through the less stringent requirements in the earlier
model years,\1194\ although that flexibility would presumably disappear
as the standards grew tighter to make up for the slower start.
Volkswagen suggested that this approach was similar to what the
agencies had already proposed for the truck fleet in terms of
stringency increases over time.\1195\ Neither commenter provided legal
analysis in response to the agency's request.
---------------------------------------------------------------------------

    \1193\ Daimler, Docket No. EPA-HQ-OAR-2010-0799-9483, at 2, 4-5;
Volkswagen, Docket No. NHTSA-2010-0131-0247, at 28.
    \1194\ Id.
    \1195\ Volkswagen, Docket No. NHTSA-2010-0131-0247, at 28.
---------------------------------------------------------------------------

    NHTSA continues to interpret EPCA, as amended by EISA, as directing
the agency to set only one passenger car and one light truck standard
for each model year that applies to the fleet as a whole, with the
exception of the small volume manufacturer standards permitted by 49
U.S.C. 32902(d) and the minimum standard for domestically manufactured
passenger cars required under 49 U.S.C. 32902(b)(4). While there have
been instances in the past when NHTSA allowed multiple standards for
light trucks to co-exist in a given model year, such as the ``flat''
and ``Reformed'' options for the MYs 2008-2010 light truck standards,
or the different light truck standards for 2WD, 4WD, and captive import
light trucks in MYs 1979-1981, NHTSA believes that those situations are
distinguishable from the ``alternate pathway'' standards sought by
Daimler and Volkswagen for several reasons.
    First, when NHTSA previously allowed different classes of light
trucks to meet different standards, or when NHTSA allowed different
options for complying with light truck standards, we did that under
statutory language that expressly authorized the agency to set multiple
standards for light trucks if the agency deemed that appropriate.\1196\
The EISA revisions removed that language, so it is not clear that
Congress intended the agency to continue offering separate standards
for different classes of light trucks, and even less clear that the
agency would have authority to offer separate standards for different
types of passenger cars, when we never had such authority to begin
with. Moreover, the EISA revisions already added ways in which there
can be multiple standards

for passenger cars in a given model year: there is the backstop
standard of 32902(b)(4) for domestically-manufactured passenger
cars,\1197\ and there is the exemption provision of 32902(d) for low-
volume manufacturers. The latter is the provision that speaks most
clearly to this question of whether Congress has considered the
possibility of multiple standards being ``maximum feasible'' for the
passenger car fleet--NHTSA has the authority to set alternate ``maximum
feasible'' standards for passenger cars, but only for manufacturers
producing fewer than 10,000 cars in a model year.
---------------------------------------------------------------------------

    \1196\ Under EPCA prior to the EISA revisions, 49 U.S.C.
32902(a) expressly stated that separate standards could be
prescribed for different classes of non-passenger automobiles.
    \1197\ We note that taking the ``doesn't say we can't'' approach
with backstop authority (i.e., that just because Congress
established a backstop requirement for domestic cars doesn't mean we
can't also create backstop standards for import cars and light
trucks) is different from taking the same approach with multiple
standards being maximum feasible for the same fleet in a single
model year. Having additional backstops for other fleets does not
defeat the purpose of the Congressionally-required backstop. Having
multiple standards be simultaneously ``maximum feasible'' for
passenger cars seems to defeat the purpose of ``maximum,'' which is
inherently singular.
---------------------------------------------------------------------------

    Second, the fact patterns under which NHTSA previously set multiple
standards for a compliance category in the same model year are
different from the fact pattern presented in the current rulemaking for
the ``alternate pathway'' standards. In the most recent example, the
MYs 2008-2011 rulemaking, NHTSA was changing both the structure of CAFE
standards (from the flat MY 2007 standard to the attribute-based MY
2011 standard) and changing the technical approach to determining
maximum feasible stringency (from a ``stage analysis''/``least-
capable'' approach in MY 2007 to an industry-wide net benefit
maximizing approach in MY 2011). To manage this change, the ``flat''
and ``reformed'' light truck standards co-existing during MYs 2008-2010
were set with reference to each other: specifically, the agency first
used the ``stage analysis'' approach to determine the maximum feasible
``flat'' standard in each model year, and then used the CAFE model to
set the stringency of the ``reformed'' standard in each model year at a
level producing approximately the same level of cost to the industry as
a whole. After this transition period, the MY 2011 standard was
promulgated as a single attribute-based standard, the stringency of
which was set at a level estimated to maximize net benefits to society.
This cost equalization between the two sets of standards established
for MYs 2008-2010 helped ensure that the reformed standards would be
feasible for the industry as a whole, and was intended to avoid a
situation in which one form of the standards would be so much easier to
meet than the other that all manufacturers would choose that form and
not gain experience with the other. Both sets of standards, thus, were
designed to require a similar ``lift'' from the industry as a whole in
any given model year. The fact pattern for the ``alternate pathway''
would be designed to require exactly the opposite: the ``alternate
pathway'' standards would be much easier in some years, and much more
difficult in others, than the ``main pathway'' standards. EPCA/EISA
expressly requires that standards must be maximum feasible in each
separate model year. Based on the suggestions from Daimler and
Volkswagen, there is no indication that the ``main pathway'' and
``alternate pathway'' standards would be similar in any given year in
terms of costs, technology required, fuel saved, or any other metric
that NHTSA considers for determining maximum feasible. It is difficult
to see how two completely different standards can both be maximum
feasible for the industry as a whole in the same model year.
    And finally, NHTSA did not suggest in the NPRM that it might be
considering setting multiple ``maximum feasible'' passenger car
standards for MYs 2017-2021, and nothing in NHTSA's past practice
\1198\ suggests that this might be something the agency would consider
in the CAFE context, particularly for passenger car standards. Since
first promulgating attribute-based CAFE standards, NHTSA has
interpreted the maximum feasible requirement as no longer requiring a
``least capable manufacturer'' approach, and the proposed standards
were consistent with that interpretation by being maximum feasible for
the industry as a whole, if not necessarily feasible for every
manufacturer in every model year. EPCA/EISA expressly provides a
solution for the manufacturers who cannot meet the main standards in
the civil penalty provisions of Sec.  32912. If NHTSA had to account
for the traditional fine payers in determining the maximum feasible
standards, we would fundamentally be precluded from pushing the rest of
the industry as far as we thought it could go. The NPRM was based on
this interpretation, as is the final rule, and the analysis supporting
both rulemaking documents accounted for it.
---------------------------------------------------------------------------

    \1198\ Having allowed multiple light truck CAFE standards and
having allowed alternate phase-ins for safety standards would not be
sufficient indication that NHTSA might suddenly be considering
multiple passenger car CAFE standards.
---------------------------------------------------------------------------

    For these reasons, NHTSA is not finalizing the ``alternate
pathway'' approach requested by the commenters. If commenters wish to
pursue this issue again in the future rulemaking to develop final
standards for MYs 2022-2025, NHTSA again requests that they provide
legal analysis of EPCA/EISA in support of their position.
2. Administrative Procedure Act
    To be upheld under the ``arbitrary and capricious'' standard of
judicial review in the APA, an agency rule must be rational, based on
consideration of the relevant factors, and within the scope of the
authority delegated to the agency by the statute. The agency must
examine the relevant data and articulate a satisfactory explanation for
its action including a ``rational connection between the facts found
and the choice made.'' Burlington Truck Lines, Inc. v. United States,
371 U.S. 156, 168 (1962).
    Statutory interpretations included in an agency's rule are
subjected to the two-step analysis of Chevron, U.S.A., Inc. v. Natural
Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694
(1984). Under step one, where a statute ``has directly spoken to the
precise question at issue,'' id. at 842, 104 S.Ct. 2778, the court and
the agency ``must give effect to the unambiguously expressed intent of
Congress,'' id. at 843, 104 S.Ct. 2778. If the statute is silent or
ambiguous regarding the specific question, the court proceeds to step
two and asks ``whether the agency's answer is based on a permissible
construction of the statute.'' Id.
    If an agency's interpretation differs from the one that it has
previously adopted, the agency need not demonstrate that the prior
position was wrong or even less desirable. Rather, the agency would
need only to demonstrate that its new position is consistent with the
statute and supported by the record, and acknowledge that this is a
departure from past positions. The Supreme Court emphasized this
recently in FCC v. Fox Television, 129 S.Ct. 1800 (2009). When an
agency changes course from earlier regulations, ``the requirement that
an agency provide a reasoned explanation for its action would
ordinarily demand that it display awareness that it is changing
position,'' but ``need not demonstrate to a court's satisfaction that
the reasons for the new policy are better than the reasons for the old
one; it suffices that the new policy is permissible under the statute,
that there are good reasons for it, and that the agency believes it to
be better, which the conscious change of course adequately indicates.''
\1199\ The APA also requires

that agencies provide notice and comment to the public when proposing
regulations,\1200\ as we did in the NPRM.
---------------------------------------------------------------------------

    \1199\ Ibid., 1181.
    \1200\ 5 U.S.C. 553.
---------------------------------------------------------------------------

3. National Environmental Policy Act
    As discussed above, EPCA requires the agency to determine the level
at which to set CAFE standards for each model year by considering the
four factors of technological feasibility, economic practicability, the
effect of other motor vehicle standards of the Government on fuel
economy, and the need of the United States to conserve energy. The
National Environmental Policy Act (NEPA) directs that environmental
considerations be integrated into that process.\1201\ To accomplish
that purpose, NEPA requires an agency to compare the potential
environmental impacts of its proposed action to those of a reasonable
range of alternatives.
---------------------------------------------------------------------------

    \1201\ NEPA is codified at 42 U.S.C. Sec. Sec.  4321-47.
---------------------------------------------------------------------------

    To explore the environmental consequences of the agency's action in
depth, NHTSA has prepared a Final Environmental Impact Statement
(``Final EIS''). The purpose of an EIS is to ``provide full and fair
discussion of significant environmental impacts and [to] inform
decisionmakers and the public of the reasonable alternatives which
would avoid or minimize adverse impacts or enhance the quality of the
human environment.'' 40 CFR 1502.1.
    NEPA is ``a procedural statute that mandates a process rather than
a particular result.'' Stewart Park & Reserve Coal., Inc. v. Slater,
352 F.3d 545, 557 (2nd Cir. 2003). The agency's overall EIS-related
obligation is to ``take a `hard look' at the environmental consequences
before taking a major action.'' Baltimore Gas & Elec. Co. v. Natural
Res. Def. Council, Inc., 462 U.S. 87, 97, 103 S.Ct. 2246, 76 L.Ed.2d
437 (1983). Significantly, ``[i]f the adverse environmental effects of
the proposed action are adequately identified and evaluated, the agency
is not constrained by NEPA from deciding that other values outweigh the
environmental costs.'' Robertson v. Methow Valley Citizens Council, 490
U.S. 332, 350, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989).
    The agency must identify the ``environmentally preferable''
alternative, but need not adopt it. ``Congress in enacting NEPA * * *
did not require agencies to elevate environmental concerns over other
appropriate considerations.'' Baltimore Gas and Elec. Co. v. Natural
Resources Defense Council, Inc., 462 U.S. 87, 97 (1983). Instead, NEPA
requires an agency to develop alternatives to the proposed action in
preparing an EIS. 42 U.S.C. Sec.  4332(2)(C)(iii). The statute does not
command the agency to favor an environmentally preferable course of
action, only that it make its decision to proceed with the action after
taking a hard look at environmental consequences.
    This final rule contains the Record of Decision (ROD) for NHTSA's
rulemaking action, pursuant to NEPA and the Council on Environmental
Quality's (CEQ) implementing regulations, in Section IV.J.\1202\ See 40
CFR Sec.  1505.2. The ROD explains NHTSA's decision and the
considerations relevant to NHTSA's decision, including the information
contained in the Final EIS. Id.
---------------------------------------------------------------------------

    \1202\ CEQ NEPA implementing regulations are codified at 40 Code
of Federal Regulations (CFR) Parts 1500-08.
---------------------------------------------------------------------------

E. What are the CAFE standards?

1. Form of the Standards
    Each of the CAFE standards that NHTSA is promulgating today for
passenger cars and light trucks is expressed as a mathematical function
that defines a fuel economy target applicable to each vehicle model
and, for each fleet, establishes a required CAFE level determined by
computing the sales-weighted harmonic average of those targets.\1203\
---------------------------------------------------------------------------

    \1203\ Required CAFE levels shown here are estimated required
levels based on NHTSA's current projection of manufacturers' vehicle
fleets in MYs 2017-2025, given the MY 2008-based and MY 2010-based
market forecasts. Actual required levels are not determined until
the end of each model year, when all of the vehicles produced by a
manufacturer in that model year are known and their compliance
obligation can be determined with certainty. The target curves, as
defined by the constrained linear function, and as embedded in the
function for the sales-weighted harmonic average, are the real
``standards'' being promulgated today.
---------------------------------------------------------------------------

    As discussed above in Section II.C, NHTSA has determined passenger
car fuel economy targets using a constrained linear function defined
according to the following formula:
[GRAPHIC] [TIFF OMITTED] TR15OC12.027

    Here, TARGET is the fuel economy target (in mpg) applicable to
vehicles of a given footprint (FOOTPRINT, in square feet), b and a are
the function's lower and upper asymptotes (also in mpg), respectively,
c is the slope (in gallons per mile per square foot) of the sloped
portion of the function, and d is the intercept (in gallons per mile)
of the sloped portion of the function (that is, the value the sloped
portion would take if extended to a footprint of 0 square feet). The
MIN and MAX functions take the minimum and maximum, respectively, of
the included values.
    NHTSA is establishing, consistent with the standards for MYs 2011-
2016, that the CAFE level required of any given manufacturer be
determined by calculating the production-weighted harmonic average of
the fuel economy targets applicable to each vehicle model:
[GRAPHIC] [TIFF OMITTED] TR15OC12.028

    PRODUCTIONi is the number of units produced for sale in
the United States of each ith unique footprint within each model type
produced for sale in the United States, and TARGETi is the
corresponding fuel economy target (according to the equation shown
above and based on the corresponding footprint), and the summations in
the numerator and denominator are both performed over all unique
footprint and model type combinations in the fleet in question.
    The final standards for passenger cars are, therefore, specified by
the four coefficients defining fuel economy targets:

a = upper limit (mpg)

b = lower limit (mpg)
c = slope (gallon per mile per square foot)
d = intercept (gallon per mile)

    For light trucks, NHTSA is defining fuel economy targets in terms
of a mathematical function under which the target is the maximum of
values determined under each of two constrained linear functions. The
second of these establishes a ``floor'' reflecting the MY 2016
standard, after accounting for estimated adjustments reflecting
increased air conditioner efficiency. This prevents the target at any
footprint from declining between model years. The resultant
mathematical function is as follows:
[GRAPHIC] [TIFF OMITTED] TR15OC12.029

    The final standards for light trucks are, therefore, specified by
the eight coefficients defining fuel economy targets:

a = upper limit (mpg)
b = lower limit (mpg)
c = slope (gallon per mile per square foot)
d = intercept (gallon per mile)
e = upper limit (mpg) of ``floor''
f = lower limit (mpg) of ``floor''
g = slope (gallon per mile per square foot) of ``floor''
h = intercept (gallon per mile) of ``floor''
2. Passenger Car Standards for MYs 2017-2025
    For passenger cars, NHTSA is establishing CAFE standards for MYs
2017-2021 and presenting augural standards for MYs 2022-2025 defined by
the following coefficients:

                          Table IV-16--NHTSA Coefficients Defining Final MYs 2017-2025 Fuel Economy Targets for Passenger Cars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Coefficient                     2017        2018        2019        2020        2021        2022        2023        2024        2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
a (mpg).....................................  43.61       45.21       46.87       48.74       50.83       53.21       55.71       58.32       61.07
b (mpg).....................................  32.65       33.84       35.07       36.47       38.02       39.79       41.64       43.58       45.61
c (gpm/sf)..................................   0.0005131   0.0004954   0.0004783   0.0004603   0.0004419   0.0004227   0.0004043   0.0003867   0.0003699
d (gpm).....................................   0.001896    0.001811    0.001729    0.001643    0.001555    0.001463    0.001375    0.001290    0.001210
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For reference, the coefficients defining the MYs 2012-2016
passenger car standards are also provided below:

      Table IV-17--NHTSA Coefficients Defining Final MYs 2012-2016 Fuel Economy Targets for Passenger Cars
----------------------------------------------------------------------------------------------------------------
                     Coefficient                         2012        2013        2014        2015        2016
----------------------------------------------------------------------------------------------------------------
a (mpg).............................................  35.95       36.80       37.75       39.24       41.09
b (mpg).............................................  27.95       28.46       29.03       29.90       30.96
c (gpm/sf)..........................................   0.0005308   0.0005308   0.0005308   0.0005308   0.0005308
d (gpm).............................................   0.0060507   0.005410    0.004725    0.003719    0.002573
----------------------------------------------------------------------------------------------------------------

    Section II.C above and Chapter 2 of the Joint TSD discusses how the
coefficients in Table IV-16 were developed for this final rule. The
coefficients result in the footprint-dependent targets shown
graphically below for MYs 2017-2025. The MY 2012-2016 final standards
are also shown for comparison.

[GRAPHIC] [TIFF OMITTED] TR15OC12.030

    As discussed, the CAFE levels ultimately required of individual
manufacturers will depend on the mix of vehicles they produce for sale
in the United States. Based on the market forecasts of future sales
that NHTSA has used to examine today's final and augural CAFE
standards, the agency currently estimates that the target curves shown
above will result in the following average required fuel economy levels
for individual manufacturers during MYs 2017-2025 (an updated estimate
of the average required fuel economy level under the final MY 2016
standard is also shown for comparison).\1204\ This table has changed
since the NPRM in that it now shows the estimated required levels
starting from both the MY 2008-based market forecast and the MY 2010-
based market forecast, as follows:
---------------------------------------------------------------------------

    \1204\ In the May 2010 final rule establishing MYs 2012-2016
standards for passenger cars and light trucks, NHTSA estimated that
the required fuel economy levels for passenger cars would average
37.8 mpg under the MY 2016 passenger car standard. Based on the
agency's current forecast of the MY 2016 passenger car market, NHTSA
estimates that the average required fuel economy level for passenger
cars will be 38.2-38.7 mpg in MY 2016.

  Table IV-18--NHTSA Estimated Average Fuel Economy Required Under Final MY 2016 and Final and Augural MYs 2017-2025 CAFE Standards for Passenger Cars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  MY baseline      2016       2017       2018       2019       2020       2021      2022      2023      2024      2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aston Martin...................  2008.........  39.0-....  40.5-....  41.9-....  43.5-....  45.2-....  47.2-....  49.4-...  51.7-...  54.1-...  56.6-
                                 2010.........  37.4.....  38.8.....  40.2.....  41.6.....  43.3.....  45.1.....  47.3....  49.5....  51.8....  54.2
BMW............................  2008.........  38.0-....  39.4-....  40.9-....  42.4-....  44.1-....  46.0-....  48.1-...  50.4-...  52.7-...  55.2-
                                 2010.........  37.9.....  39.4.....  40.8.....  42.3.....  43.9.....  45.8.....  47.9....  50.1....  52.5....  55.0
Daimler........................  2008.........  37.3-....  38.6-....  39.9-....  41.4-....  43.0-....  44.9-....  47.0-...  49.2-...  51.4-...  53.9-
                                 2010.........  36.7.....  38.0.....  39.4.....  40.9.....  42.5.....  44.3.....  46.4....  48.5....  50.9....  53.2
Fiat...........................  2008.........  37.3-....  39.1-....  40.6-....  42.1-....  43.7-....  45.7-....  47.9-...  50.2-...  52.6-...  55.1-
                                 2010.........  37.3.....  38.7.....  39.9.....  41.4.....  43.0.....  44.9.....  47.0....  49.2....  51.6....  54.0
Ford...........................  2008.........  37.9-....  39.1-....  40.6-....  42.1-....  43.7-....  45.6-....  47.7-...  49.9-...  52.3-...  54.7-
                                 2010.........  38.1.....  39.5.....  41.0.....  42.5.....  44.1.....  46.0.....  48.2....  50.4....  52.8....  55.3
Geely..........................  2008.........  37.4-....  38.8-....  40.3-....  41.7-....  43.4-....  45.3-....  47.4-...  49.6-...  51.9-...  54.4-
                                 2010.........  38.7.....  40.1.....  41.5.....  43.0.....  44.7.....  46.6.....  48.7....  50.9....  53.3....  55.8
General Motors.................  2008.........  37.9-....  39.6-....  41.1-....  42.6-....  44.3-....  46.2-....  48.4-...  50.7-...  53.1-...  55.6-
                                 2010.........  37.9.....  39.3.....  40.8.....  42.2.....  43.9.....  45.7.....  47.9....  50.1....  52.5....  54.9
Honda..........................  2008.........  38.9-....  40.4-....  41.9-....  43.4-....  45.2-....  47.1-....  49.3-...  51.6-...  54.0-...  56.6-
                                 2010.........  38.2.....  39.7.....  41.1.....  42.6.....  44.2.....  46.1.....  48.3....  50.5....  52.9....  55.4
Hyundai........................  2008.........  39.0-....  40.4-....  41.9-....  43.4-....  45.2-....  47.1-....  49.3-...  51.6-...  54.1-...  56.6-
                                 2010.........  38.3.....  39.8.....  41.3.....  42.7.....  44.5.....  46.4.....  48.6....  50.8....  53.2....  55.7
Kia............................  2008.........  39.9-....  41.1-....  42.6-....  44.2-....  46.0-....  48.0-....  50.3-...  52.6-...  55.1-...  57.7-
                                 2010.........  39.4.....  40.8.....  42.3.....  43.8.....  45.6.....  47.5.....  49.8....  52.1....  54.5....  57.1
Lotus..........................  2008.........  42.0-....  43.6-....  45.2-....  46.9-....  48.7-....  50.8-....  53.2-...  55.7-...  58.3-...  61.1-
                                 2010.........  40.3.....  41.8.....  43.3.....  44.9.....  46.7.....  48.7.....  51.0....  53.4....  55.9....  58.5
Mazda..........................  2008.........  39.9-....  41.5-....  43.0-....  44.5-....  46.3-....  48.3-....  50.6-...  53.0-...  55.5-...  58.1-
                                 2010.........  38.7.....  40.1.....  41.6.....  43.0.....  44.7.....  46.6.....  48.8....  51.1....  53.5....  56.0
Mitsubishi.....................  2008.........  38.9-....  40.5-....  42.0-....  43.6-....  45.3-....  47.3-....  49.5-...  51.8-...  54.2-...  56.8-
                                 2010.........  40.3.....  41.8.....  43.3.....  44.9.....  46.7.....  48.7.....  51.0....  53.4....  55.9....  58.6
Nissan.........................  2008.........  38.4-....  39.8-....  41.2-....  42.8-....  44.4-....  46.3-....  48.5-...  50.7-...  53.1-...  55.6-
                                 2010.........  38.2.....  39.6.....  41.0.....  42.5.....  44.2.....  46.0.....  48.2....  50.4....  52.8....  55.2
Porsche........................  2008.........  42.0-....  43.6-....  45.2-....  46.9-....  48.7-....  50.8-....  53.2-...  55.7-...  58.3-...  61.1-
                                 2010.........  37.6.....  39.1.....  40.5.....  42.0.....  43.6.....  45.4.....  47.5....  49.7....  52.1....  54.5
Spyker/Saab....................  2008.........  39.6-....  41.1-....  42.6-....  44.2-....  46.0-....  47.9-....  50.2-...  52.5-...  55.0-...  57.6-
                                 2010.........  0.0......  0.0......  0.0......  0.0......  0.0......  0.0......  0.0.....  0.0.....  0.0.....  0.0
Subaru.........................  2008.........  41.1-....  42.6-....  44.2-....  45.8-....  47.6-....  49.7-....  52.0-...  54.4-...  57.0-...  59.6-
                                 2010.........  39.6.....  41.1.....  42.6.....  44.1.....  45.8.....  47.7.....  49.9....  52.2....  54.7....  57.2
Suzuki.........................  2008.........  41.7-....  43.3-....  44.9-....  46.5-....  48.4-....  50.5-....  52.8-...  55.3-...  57.9-...  60.6-
                                 2010.........  40.6.....  42.1.....  43.6.....  45.2.....  46.9.....  48.9.....  51.2....  53.6....  56.1....  58.7
Tata...........................  2008.........  35.6-....  36.9-....  38.3-....  39.7-....  41.2-....  43.0-....  45.0-...  47.1-...  49.3-...  51.7-
                                 2010.........  36.0.....  37.4.....  38.8.....  40.4.....  41.9.....  43.8.....  45.9....  48.0....  50.3....  52.7
Tesla..........................  2008.........  42.0-....  43.6-....  45.2-....  46.9-....  48.7-....  50.8-....  53.2-...  55.7-...  58.3-...  61.1-
                                 2010.........  0.0......  0.0......  0.0......  0.0......  0.0......  0.0......  0.0.....  0.0.....  0.0.....  0.0
Toyota.........................  2008.........  39.2-....  40.6-....  42.1-....  43.7-....  45.4-....  47.4-....  49.6-...  51.9-...  54.3-...  56.9-
                                 2010.........  38.3.....  39.7.....  41.2.....  42.7.....  44.3.....  46.2.....  48.4....  50.7....  53.0....  55.5
Volkswagen.....................  2008.........  39.9-....  41.4-....  43.0-....  44.5-....  46.3-....  48.3-....  50.6-...  52.9-...  55.4-...  58.0-
                                 2010.........  39.0.....  40.5.....  41.9.....  43.5.....  45.2.....  47.1.....  49.3....  51.6....  54.1....  56.6
Average........................  2008.........  38.7-....  40.1-....  41.6-....  43.1-....  44.8-....  46.8-....  49.0-...  51.2-...  53.6-...  56.2-
                                 2010.........  38.2.....  39.6.....  41.1.....  42.5.....  44.2.....  46.1.....  48.2....  50.5....  52.9....  55.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Because a manufacturer's required average fuel economy level for a
model year under the final standards will be based on its actual
production numbers in that model year, its official required fuel
economy level will not be known until the end of that model year.
However, because the targets for each vehicle footprint will be
established in advance of the model year, a manufacturer should be able
to estimate its required level accurately. Readers should remember that
the mpg levels describing the ``estimated required standards'' shown
throughout this section are not necessarily the ultimate mpg level with
which manufacturers will have to comply, for the reasons explained
above, and that the mpg level designated as ``estimated required'' is
exactly that, an estimate.
3. Minimum Domestic Passenger Car Standards
    EISA expressly requires each manufacturer to meet a minimum flat
fuel economy standard for domestically manufactured passenger cars in
addition to meeting the standards set by NHTSA. According to the
statute (49 U.S.C. 32902(b)(4)), the minimum standard shall be the
greater of (A) 27.5 miles per gallon; or (B) 92 percent of the average
fuel economy projected by the Secretary for the combined domestic and
nondomestic passenger automobile fleets manufactured for sale in the
United States by all manufacturers in the model year. The agency must
publish the projected minimum standards in the Federal Register when
the passenger car standards for the model year in question are
promulgated. As a practical matter, as standards for both cars and
trucks continue to rise over time, 49 U.S.C. 32902(b)(4)(A) will likely
eventually cease to be relevant.
    As discussed in the final rule establishing the MYs 2012-2016 CAFE
standards, because 49 U.S.C. 32902(b)(4)(B) states that the minimum
domestic passenger car standard shall be 92 percent of the projected
average fuel economy for the passenger car fleet, ``which projection
shall be published in the Federal Register when the standard

for that model year is promulgated in accordance with this section,''
NHTSA interprets EISA as indicating that the minimum domestic passenger
car standard should be based on the agency's fleet assumptions when the
passenger car standard for that year is promulgated.
    However, we note that we do not read this language to preclude any
change, ever, in the minimum standard after it is first promulgated for
a model year. As long as the 18-month lead-time requirement of 49
U.S.C. 32902(a) is respected, NHTSA believes that the language of the
statute suggests that the 92 percent should be determined anew any time
the passenger car standards are revised. This issue will be
particularly relevant for the current rulemaking, given the
considerable lead-time involved and the necessity of a new rulemaking
to develop and establish the MYs 2022-2025 standards. We sought comment
in the NPRM on this interpretation, and on whether or not the agency
should consider instead for MYs 2017-2025 designating the minimum
domestic passenger car standards proposed as ``estimated,'' just as the
passenger car standards are ``estimated,'' and waiting until the end of
each model year to finalize the 92 percent mpg value. While NHTSA
received a number of comments on the topic of ``backstops'' generally,
no commenters addressed this particular question. We are therefore
finalizing the approach proposed, but we will continue to monitor this
issue going forward to assess whether the difference between the final
required passenger car standards and the minimum standards promulgated
today grows over time.
    We note also that in the MYs 2012-2016 final rule, we interpreted
EISA as indicating that the 92 percent minimum standard should be based
on the estimated required CAFE level rather than, as suggested by the
Alliance, the estimated achieved CAFE level (which would likely be
lower than the estimated required level if it reflected manufacturers'
use of dual-fuel vehicle credits under 49 U.S.C. 32905, at least in the
context of the MYs 2012-2016 standards). No comments were received on
this position as stated in the NPRM, and NHTSA continues to believe
that this interpretation is appropriate for the final rule.
    The determination of the minimum domestic passenger car standard is
complicated somewhat in this final rule by the fact that the 92 percent
calculation depends on the agency's assessment of the estimated
required passenger car mpg level in a given model year--with two
baseline market forecasts, the estimated required mpg levels are
presented throughout this document as a range. The minimum domestic
passenger car standard, however, must be a single mpg level. Given the
uncertainty associated with the baseline market forecasts that led the
agencies to use both for the final rule analysis, the agency concluded
that it would be reasonable to determine 92 percent of the estimated
required level in each year under both the MY 2008-based market
forecast and the MY 2010-based market forecast, and average the two.
Table IV-19 below shows the 92 percent mpg levels for both forecasts:

       Table IV-19--NHTSA Values for 92 Percent of the Estimated Required MYs 2017-2025 MPG Levels for Passenger Cars Under Both Market Forecasts
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          2017       2018       2019       2020       2021       2022       2023       2024       2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
MY 2008..............................................       36.9       38.3       39.7       41.2       43.0       45.0       47.1       49.4       51.7
MY 2010..............................................       36.4       37.8       39.1       40.6       42.4       44.4       46.4       48.6       50.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The final minimum standards for domestically manufactured passenger
cars for MYs 2017-2021 and the augural standards for MYs 2022-2025
(and, for comparison, the final MY 2016 minimum domestic passenger car
standard) are presented below in Table IV-20.

 Table IV-20--NHTSA Estimated Minimum Standard for Domestically Manufactured Passenger Cars Under Final MY 2016 and Final and Augural MYs 2017-2025 CAFE
                                                              Standards for Passenger Cars
--------------------------------------------------------------------------------------------------------------------------------------------------------
     2016            2017            2018            2019            2020           2021           2022           2023           2024           2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
       34.7            36.7            38.0            39.4            40.9           42.7           44.7           46.8           49.0           51.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As discussed in Section IV.D, NHTSA also sought comment on whether
to consider, for the final rule, the possibility of minimum standards
for imported passenger cars and light trucks. Although we did not
propose such standards, we explored this concept again in the NPRM in
light of the considerable amount of time between now and 2017-2025
(particularly the later years), and the accompanying uncertainty in our
market forecast and other assumptions, which we explained might make
such minimum standards relevant to help ensure that currently-expected
fuel economy improvements occur during that time frame. Comments
received on this question were decidedly mixed; NHTSA's full discussion
of this issue is presented in Section IV.D. In summary, NHTSA believes
it is likely most prudent to wait until we are able to observe
potential market changes during the implementation of the MYs 2012-2016
standards and to consider additional minimum standards in a future
rulemaking action. Any additional minimum standards for MYs 2022-2025
that may be set in the future would, like the primary standards, be a
part of the future rulemaking concurrent with the mid-term evaluation,
and potentially revised at that time.
4. Light Truck Standards
    For light trucks, NHTSA is promulgating final CAFE standards for
MYs 2017-2021 and presenting augural standards for MYs 2022-2025
defined by the following coefficients:

                     Table IV-21--NHTSA Coefficients Defining Final and Augural MYs 2017-2025 Fuel Economy Targets for Light Trucks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Coefficient                     2017        2018        2019        2020        2021        2022        2023        2024        2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
a (mpg).....................................  36.26       37.36       38.16       39.11       41.80       43.79       45.89       48.09       50.39
b (mpg).....................................  25.09       25.20       25.25       25.25       25.25       26.29       27.53       28.83       30.19
c (gpm/sf)..................................   0.0005484   0.0005358   0.0005265   0.0005140   0.0004820   0.0004607   0.0004404   0.0004210   0.0004025
d (gpm).....................................   0.005097    0.004797    0.004623    0.004494    0.004164    0.003944    0.003735    0.003534    0.003343
e (mpg).....................................  35.10       35.31       35.41       35.41       35.41       35.41       35.41       35.41       35.41
f (mpg).....................................  25.09       25.20       25.25       25.25       25.25       25.25       25.25       25.25       25.25
g (gpm/sf)..................................   0.0004546   0.0004546   0.0004546   0.0004546   0.0004546   0.0004546   0.0004546   0.0004546   0.0004546
h (gpm).....................................   0.009851    0.009682    0.009603    0.009603    0.009603    0.009603    0.009603    0.009603    0.009603
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For reference, the coefficients defining the MYs 2012-2016 light
truck standards (which did not include a ``floor'' term, defined by
coefficients e, f, g, and h) are also provided below:

       Table IV-22--NHTSA Coefficients Defining Final MYs 2012-2016 Fuel Economy Targets for Light Trucks
----------------------------------------------------------------------------------------------------------------
                     Coefficient                         2012        2013        2014        2015        2016
----------------------------------------------------------------------------------------------------------------
a (mpg).............................................  29.82       30.67       31.38       32.72       34.42
b (mpg).............................................  22.27       22.74       23.13       23.85       24.74
c (gpm/sf)..........................................   0.0004546   0.0004546   0.0004546   0.0004546   0.0004546
d (gpm).............................................   0.014900    0.013968    0.013225    0.011920    0.010413
----------------------------------------------------------------------------------------------------------------

    The coefficients result in the footprint-dependent targets shown
graphically below for MYs 2017-2025. MYs 2012-2016 final standards are
shown for comparison.

[GRAPHIC] [TIFF OMITTED] TR15OC12.031

    Again, given these targets, the CAFE levels required of individual
manufacturers will depend on the mix of vehicles they produce for sale
in the United States. Based on the market forecasts that NHTSA has used
to examine today's final and augural CAFE standards, the agency
currently estimates that the target curves shown above will result in
the following average required fuel economy levels for individual
manufacturers during MYs 2017-2025 (an updated estimate of the average
required fuel economy level under the final MY 2016 standard is shown
for comparison).\1205\ This table has changed since the NPRM in that it
now shows the estimated required levels starting from both the MY 2008-
based market forecast and the MY 2010-based market forecast, as
follows:
---------------------------------------------------------------------------

    \1205\ In the May 2010 final rule establishing MYs 2012-2016
standards for passenger cars and light trucks, NHTSA estimated that
the required fuel economy levels for light trucks would average 28.8
mpg under the MY 2016 light truck standard. Based on the agency's
current forecasts of the MY 2016 light truck market, NHTSA estimates
that the required fuel economy levels will average 28.9-29.2 mpg in
MY 2016. The agency has made no changes to MY 2016 standards and
projects no changes in fleet-specific average requirements (although
within-fleet market shifts could, under an attribute-based standard,
produce such changes).

                       Table IV-23--NHTSA Estimated Average Fuel Economy Required Under Final MY 2016 and Final and Augural MYs 2017-2025 CAFE Standards for Light Trucks
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                  MY baseline        2016           2017           2018           2019           2020           2021          2022          2023          2024          2025
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Aston Martin...................  2008.........  0.0-.........  0.0-.........  0.0-.........  0.0-.........  0.0-.........  0.0-.........  0.0-........  0.0-........  0.0-........  0.0-
                                 2010.........  0.0..........  0.0..........  0.0..........  0.0..........  0.0..........  0.0..........  0.0.........  0.0.........  0.0.........  0.0
BMW............................  2008.........  30.7-........  30.6-........  31.4-........  32.1-........  32.9-........  35.1-........  36.7-.......  38.4-.......  40.2-.......  42.1-
                                 2010.........  31.0.........  31.2.........  32.0.........  32.7.........  33.5.........  35.8.........  37.5........  39.3........  41.1........  43.1
Daimler........................  2008.........  29.5-........  29.1-........  29.6-........  30.2-........  30.9-........  32.9-........  34.5-.......  36.1-.......  37.8-.......  39.5-
                                 2010.........  30.0.........  30.1.........  30.8.........  31.4.........  32.2.........  34.4.........  36.0........  37.7........  39.5........  41.4
Fiat...........................  2008.........  29.4-........  29.6-........  30.2-........  30.8-........  31.5-........  33.7-........  35.3-.......  37.0-.......  38.8-.......  40.6-
                                 2010.........  29.5.........  29.6.........  30.2.........  30.7.........  31.5.........  33.6.........  35.2........  36.9........  38.6........  40.4
Ford...........................  2008.........  28.5-........  28.6-........  29.1-........  29.6-........  30.0-........  32.0-........  33.5-.......  35.2-.......  37.0-.......  38.8-
                                 2010.........  27.3.........  27.5.........  27.8.........  28.0.........  28.4.........  30.2.........  31.7........  33.1........  34.7........  36.4
Geely..........................  2008.........  31.0-........  31.1-........  32.1-........  32.7-........  33.5-........  35.8-........  37.5-.......  39.3-.......  41.2-.......  43.1-
                                 2010.........  31.2.........  31.4.........  32.4.........  33.0.........  33.9.........  36.2.........  37.9........  39.7........  41.6........  43.6
General Motors.................  2008.........  27.7-........  28.0-........  28.5-........  29.1-........  29.6-........  31.7-........  33.2-.......  34.9-.......  36.6-.......  38.4-
                                 2010.........  27.7.........  27.8.........  28.1.........  28.6.........  29.2.........  31.2.........  32.8........  34.3........  36.0........  37.8
Honda..........................  2008.........  30.9-........  31.0-........  31.7-........  32.3-........  33.1-........  35.4-........  37.0-.......  38.8 -......  40.7-.......  42.6-
                                 2010.........  30.2.........  30.4.........  31.1.........  31.7.........  32.5.........  34.7.........  36.4........  38.1........  39.9........  41.8
Hyundai........................  2008.........  31.2-........  31.3-........  32.1-........  32.8-........  33.6-........  35.9-........  37.6-.......  39.4-.......  41.3-.......  43.2-
                                 2010.........  31.7.........  32.1.........  33.0.........  33.7.........  34.6.........  36.9.........  38.7........  40.5........  42.5........  44.5
Kia............................  2008.........  30.0-........  30.0-........  30.6-........  31.2-........  32.0-........  34.2-........  35.8-.......  37.5-.......  39.3-.......  41.1-
                                 2010.........  30.1.........  30.3.........  31.0.........  31.7.........  32.5.........  34.8.........  36.5........  38.3........  40.1........  42.1
Lotus..........................  2008.........  0.0-.........  0.0-.........  0.0-.........  0.0-.........  0.0-.........  0.0-.........  0.0-........  0.0-........  0.0-........  0.0-
                                 2010.........  0.0..........  0.0..........  0.0..........  0.0..........  0.0..........  0.0..........  0.0.........  0.0.........  0.0.........  0.0
Mazda..........................  2008.........  31.7-........  31.4-........  32.4-........  33.1-........  33.8-........  35.9-........  37.6-.......  39.3-.......  41.2-.......  43.2-
                                 2010.........  31.3.........  31.6.........  32.5.........  33.1.........  33.9.........  36.2.........  38.0........  39.8........  41.7........  43.6
Mitsubishi.....................  2008.........  32.5-........  32.9-........  33.9-........  34.6-........  35.5-........  37.9-........  39.7-.......  41.6-.......  43.6-.......  45.7-
                                 2010.........  33.4.........  34.1.........  35.1.........  35.9.........  36.7.........  39.3.........  41.1........  43.1........  45.2........  47.3
Nissan.........................  2008.........  29.4-........  29.6-........  30.3-........  30.9-........  31.6-........  33.5-........  35.1-.......  36.8-.......  38.7-.......  40.6-
                                 2010.........  29.4.........  29.6.........  30.1.........  30.5.........  31.1.........  33.1.........  34.6........  36.2........  37.9........  39.7
Porsche........................  2008.........  30.3-........  30.3-........  31.2-........  31.8-........  32.6-........  34.8-........  36.5-.......  38.2-.......  40.0-.......  41.9-
                                 2010.........  30.2.........  30.3.........  31.1.........  31.8.........  32.6.........  34.8.........  36.4........  38.2........  40.0........  41.9
Spyker/Saab....................  2008.........  31.1-........  31.2-........  32.1-........  32.8-........  33.6-........  35.9-........  37.6-.......  39.4-.......  41.3-.......  43.3-
                                 2010.........  0.0..........  0.0..........  0.0..........  0.0..........  0.0..........  0.0..........  0.0.........  0.0.........  0.0.........  0.0
Subaru.........................  2008.........  33.7-........  34.4-........  35.4-........  36.1-........  37.1-........  39.6-........  41.5-.......  43.5-.......  45.5-.......  47.7-
                                 2010.........  34.0.........  34.9.........  35.9.........  36.7.........  37.6.........  40.2.........  42.1........  44.1........  46.2........  48.4
Suzuki.........................  2008.........  31.9-........  32.2-........  33.2-........  33.9-........  34.7-........  37.1-........  38.9-.......  40.7-.......  42.7-.......  44.7-
                                 2010.........  33.5.........  34.2.........  35.2.........  36.0.........  36.9.........  39.4.........  41.3........  43.3........  45.3........  47.5
Tata...........................  2008.........  31.8-........  32.1-........  33.1-........  33.8-........  34.6-........  37.0-........  38.8-.......  40.6-.......  42.6-.......  44.6-
                                 2010.........  31.4.........  31.6.........  32.5.........  33.2.........  34.0.........  36.3.........  38.1........  39.9........  41.8........  43.8
Tesla..........................  2008.........  0.0-.........  0.0-.........  0.0-.........  0.0-.........  0.0-.........  0.0-.........  0.0-........  0.0-........  0.0-........  0.0-
                                 2010.........  0.0..........  0.0..........  0.0..........  0.0..........  0.0..........  0.0..........  0.0.........  0.0.........  0.0.........  0.0
Toyota.........................  2008.........  29.5-........  29.7-........  30.4-........  31.0-........  31.6-........  33.7-........  35.3-.......  37.0-.......  38.9-.......  40.7-
                                 2010.........  29.2.........  29.4.........  30.0.........  30.5.........  31.1.........  32.9.........  34.4........  36.1........  37.8........  39.6
Volkswagen.....................  2008.........  29.7-........  29.5-........  30.1-........  30.8-........  31.5-........  33.5-........  35.1-.......  36.7-.......  38.5-.......  40.3-
                                 2010.........  30.7.........  30.9.........  31.7.........  32.4.........  33.2.........  35.4.........  37.1........  38.9........  40.8........  42.7
Average........................  2008.........  29.2-........  29.4-........  30.0-........  30.6-........  31.2-........  33.3-........  34.9-.......  36.6-.......  38.5-.......  40.3-
                                 2010.........  28.9.........  29.1.........  29.6.........  30.0.........  30.6.........  32.6.........  34.2........  35.8........  37.5........  39.3
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    As discussed above with respect to the estimated final passenger
cars standards, we note that a manufacturer's required light truck fuel
economy level for a model year under the ultimate final standards will
be based on its actual production numbers in that model year.

F. How do the final standards fulfill NHTSA's statutory obligations?

1. Overview
    The discussion that follows is necessarily complex, but the central
points are straightforward. NHTSA has concluded that the standards
presented above in Section IV.E are the maximum feasible standards for
passenger cars and light trucks in MYs 2017-2021. EPCA/EISA requires
NHTSA to consider four statutory factors in determining the maximum
feasible CAFE standards in a rulemaking: specifically, technological
feasibility, economic practicability, the effect of other motor vehicle
standards of the Government on fuel economy, and the need of the nation
to conserve energy. The agency considered a number of regulatory
alternatives in its analysis of potential CAFE standards for those
model years, including several that increase stringency on average at
set percentages each year, one that approximates the point at which the
modeled net benefits are maximized in each model year, and one that
approximates the point at which the modeled total costs equal total
benefits in each model year. Some of those alternatives represent
standards that would be more stringent than the final standards,\1206\
and some are less

stringent.\1207\ As the discussion below explains, we conclude that the
correct balancing of the relevant factors that the agency must consider
in determining the maximum feasible standards recognizes economic
practicability concerns as discussed below, and sets standards
accordingly. Additionally, consistent with Executive Order 13563, the
agency believes that the benefits of the preferred alternative amply
justify the costs; indeed, the monetized benefits exceed the monetized
costs by $137-192 billion over the lifetime of the vehicles covered by
the final standards for MYs 2017-2021.\1208\ In full consideration of
all of the information currently before the agency, we have weighed the
statutory factors carefully and selected final passenger car and light
truck standards that we believe are the maximum feasible for MYs 2017-
2021. We have also conducted a similar analysis for the augural
standards presented for MYs 2022-2025, which represent the agency's
best estimate of what standards would be maximum feasible, based on the
information currently before us, had we the authority to set standards
for 9 model years at a time.
---------------------------------------------------------------------------

    \1206\ We recognize that more stringent standards would help the
need of the nation to conserve more energy and might potentially be
technologically feasible (in the narrowest sense) during those model
years, but based on our analysis and the evidence presented by the
industry, we do not believe that higher standards would not
represent the proper balancing for MYs 2017-2025 cars and trucks,
because they would raise serious questions about economic
practicability. As explained above, NHTSA's modeled estimates
necessarily do not perfectly capture all of the factors of economic
practicability, and this conclusion regarding net benefits versus
economic practicability is similar to the conclusion reached in the
MY 2012-2016 analysis.
    \1207\ We also recognize that less stringent standards might be
less burdensome on the industry, but considering the environmental
impacts of the different regulatory alternatives as required under
NEPA and the need of the nation to conserve energy, we do not
believe they would have represented the appropriate balancing of the
relevant factors, because they would have left technology, fuel
savings, and emissions reductions on the table unnecessarily, and
not contributed as much as possible to reducing our nation's energy
security and climate change concerns. They would also have lower net
benefits than the Preferred Alternative.
    \1208\ This range represents the agency's estimates of monetized
net benefits under both a 3% and a 7% discount rate. For purposes of
monetized net benefits associated with both the final and augural
standards (MYs 2017-2025, aggregated), the range becomes $372-507
billion, under both a 3% and a 7% discount rate.
---------------------------------------------------------------------------

2. What are NHTSA's statutory obligations?
    As discussed above in Section IV.D, NHTSA sets CAFE standards under
EPCA, as amended by EISA, and is also subject to the APA and NEPA in
developing and promulgating CAFE standards.
    NEPA requires the agency to develop and consider the findings of an
Environmental Impact Statement (EIS) for ``major Federal actions
significantly affecting the quality of the human environment.'' NHTSA
has prepared an EIS to inform its development and consideration of the
final standards. The agency has evaluated the environmental impacts of
a range of regulatory alternatives in the Final EIS and this final
rule, and integrated the results of that consideration into our
balancing of the EPCA/EISA factors, as discussed below.
    The APA and relevant case law requires our rulemaking decision to
be rational, based on consideration of the relevant factors, and within
the scope of the authority delegated to the agency by EPCA/EISA. The
relevant factors are those required by EPCA/EISA and the additional
factors approved in case law as those historically considered by the
agency in determining the maximum feasible CAFE standards, such as
safety. The statute requires us to set standards at the maximum
feasible level for passenger cars and light trucks for each model year,
and the agency concludes that the final standards would satisfy this
requirement. NHTSA has carefully examined the relevant data and other
considerations, as discussed below in the explanation of our conclusion
that the final standards are the maximum feasible levels for MYs 2017-
2021 based on our evaluation of the information before us for this
final rule.
    As discussed in Section IV.D, EPCA/EISA requires that NHTSA
establish separate passenger car and light truck standards at ``the
maximum feasible average fuel economy level that it decides the
manufacturers can achieve in that model year,'' based on the agency's
consideration of four statutory factors: technological feasibility,
economic practicability, the effect of other standards of the
Government on fuel economy, and the need of the nation to conserve
energy.\1209\ NHTSA has developed definitions for these terms over the
course of multiple CAFE rulemakings \1210\ and determines the
appropriate weight and balancing of the terms given the circumstances
in each CAFE rulemaking.\1211\ For MYs 2011-2020, EPCA further requires
that separate standards for passenger cars and for light trucks be set
at levels high enough to ensure that the CAFE of the industry-wide
combined fleet of new passenger cars and light trucks reaches at least
35 mpg not later than MY 2020. For model years after 2020, standards
need simply be set at the maximum feasible level.
---------------------------------------------------------------------------

    \1209\ As explained in Section IV.D, EPCA also provides that in
determining the level at which it should set CAFE standards for a
particular model year, NHTSA may not consider the ability of
manufacturers to take advantage of several statutory provisions that
facilitate compliance with the CAFE standards and thereby reduce the
costs of compliance. Specifically, in determining the maximum
feasible level of fuel economy for passenger cars and light trucks,
NHTSA cannot consider the fuel economy benefits of ``dedicated''
alternative fuel vehicles (like battery electric vehicles or natural
gas vehicles), must consider dual-fueled automobiles to be operated
only on gasoline or diesel fuel (at least through MY 2019), and may
not consider the ability of manufacturers to use, trade, or transfer
credits. This provision limits, to some extent, the fuel economy
levels that NHTSA can find to be ``maximum feasible''--if NHTSA
cannot consider the fuel economy of electric vehicles, for example,
NHTSA cannot set standards predicated on manufacturers' usage of
electric vehicles to meet the standards.
    \1210\ These factors are defined in Section IV.D; for brevity,
we do not repeat those definitions here.
    \1211\ Public Citizen v. NHTSA, 848 F.2d 256 (Congress
established broad guidelines in the fuel economy statute; agency's
decision to set lower standard was a reasonable accommodation of
conflicting policies).
---------------------------------------------------------------------------

    The agency thus balances the relevant factors to determine the
maximum feasible level of the CAFE standards for each fleet, in each
model year. The next section discusses briefly how the agency balanced
the factors for the proposal, and why we tentatively concluded at that
time that the proposed standards were the maximum feasible; the
following section discusses the comments received on that tentative
conclusion; and the final section discusses how the agency balanced the
factors for this final rule and why the agency believes that the final
standards are, indeed, maximum feasible.
3. How did the agency balance the factors for the NPRM?
    In the NPRM, the agency explained that there are numerous ways in
which the relevant factors can be balanced to determine what standards
would be maximum feasible, depending on the information and the policy
priorities before the agency at the time. We explained that standards
that may meet the objectives of one factor, such as technological
feasibility, may not meet the objectives of other factors, such as
economic practicability, and may thus not be maximum feasible. We
discussed the preliminary analysis conducted following the first SNOI
and prior to the second SNOI--thus, between the end of 2010 and July
2011, in which the agency tentatively concluded that the 5%, 6%, 7%,
MNB, and TC=TB alternatives were likely beyond the level of economic
practicability based on the information available to the agency at the
time, but that the alternatives including up to 4% per year for cars
and 4% per year for trucks should reasonably remain under
consideration. We further discussed the intensive discussions with
stakeholders, including many individual manufacturers, between June 21,
2011 and July 27, 2011, to determine whether additional information
would aid NHTSA in further consideration. Manufacturer stakeholders
provided

comments, much of which was confidential business information, which
included projections of how they might comply with concept standards,
the challenges that they expected, and their recommendations on program
stringency and provisions.\1212\
---------------------------------------------------------------------------

    \1212\ Feedback from these stakeholder meetings is summarized in
section IV.B and documents that are referenced in that section.
---------------------------------------------------------------------------

    Regarding passenger cars, in meetings prior to the NPRM,
manufacturers generally suggested that the most significant challenges
to meeting a constant 4% (or faster) year-over-year increase in the
passenger car standards related to their ability to implement the new
technologies quickly enough to achieve the required levels, based on
the following considerations: their need to implement fuel economy
improvements in both the passenger car and light truck fleets
concurrently; challenges related to the cadence of redesign and refresh
schedules; the pace at which new technology can be implemented
considering economic factors such as availability of engineering
resources to develop and integrate the technologies into products; and
the pace at which capital costs can be incurred to acquire and
integrate the manufacturing and production equipment necessary to
increase the production volume of the technologies. Manufacturers often
expressed concern that the 4% levels could require greater numbers of
advanced technology vehicles than they thought they would be able to
sell in that time frame, given their belief that the cost of some
technologies was much higher than the agencies had estimated and their
observations of current consumer acceptance of and willingness to pay
for advanced technology vehicles that are available now in the
marketplace. A number of manufacturers argued that they did not believe
that they could create a sustainable business case under passenger car
standards that increased at the rate required by the 4% alternative.
    Most manufacturers expressed significantly greater concerns over
the 4% alternative for light trucks than for passenger cars. Many
argued that increases in light truck standard stringency should be
slower than increases in passenger car standard stringency, based on,
among other things, the greater payload, cargo capacity and towing
utility requirements of light trucks, and what they perceived to be
lower consumer acceptance of certain (albeit not all) advanced
technologies on light trucks. Many also commented that redesign cycles
are longer on trucks than they are on passenger cars, which reduces the
frequency at which significant changes can be made cost-effectively to
comply with increasing standards, and that the significant increases in
stringency in the MY 2012-2016 program \1213\ in combination with
redesign schedules would not make it possible to comply with the 4%
alternative in the earliest years of the MY 2017-2025 program, such
that only significantly lower stringencies in those years would be
feasible in their estimation. Manufacturers generally stated that the
most significant challenges to meeting a constant 4% (or faster) year-
over-year increase in the light truck standards were similar to what
they had described for passenger cars as enumerated in the paragraph
above, but were compounded by concerns that applying technologies to
meet the 4% alternative standards would result in trucks that were more
expensive and provided less utility to consumers. Manufacturers argued
that their technology cost estimates were higher than the agencies' and
consumers are less willing to accept/pay for some advanced technologies
in trucks than in cars, and that they were not optimistic that they
could recoup the costs through higher prices for vehicles with the
technologies that would be needed to comply with the 4% alternative.
Given their concerns about having to reduce utility and raise truck
prices, and about their ability to apply technologies quickly enough
given the longer redesign periods for trucks, a number of manufacturers
argued that they did not believe that they could create a sustainable
business case under light truck standards that increased at the rate
required by the 4% alternative.
---------------------------------------------------------------------------

    \1213\ Some manufacturers indicated that their light truck fleet
fuel economy would be below what they anticipated their required
fuel economy level would be in MY 2016, and that they currently
expect that they will need to employ available flexibilities to
comply with that standard.
---------------------------------------------------------------------------

    Prior to the NPRM, other stakeholders, such as environmental and
consumer groups, consistently stated that stringent standards are
technologically achievable and critical to important national
interests, such as improving energy independence, reducing climate
change, and enabling the domestic automobile industry to remain
competitive in the global market. Labor interests stressed the need to
carefully consider economic impacts and the opportunity to create and
support new jobs, and consumer advocates emphasized the economic and
practical benefits to consumers of improved fuel economy and the need
to preserve consumer choice. In addition, a number of stakeholders
stated that the standards under development should not have an adverse
impact on safety.
    We thus explained in the NPRM that, in collaboration with EPA and
in coordination with CARB, NHTSA carefully considered the inputs
received from all stakeholders, conducted additional independent
analyses, and deliberated over the feedback received on the agencies'
analyses. Based on our own analysis of manufacturers' capabilities and
based on that feedback, particularly as it concerned consumer
acceptance of some advanced technologies and consumers' willingness to
pay for improved fuel economy, we tentatively concluded that the
agency's preliminary analysis supporting consideration of standards
that increased up to 4%/year may not have captured fully the level of
uncertainty that surrounds economic practicability in these future
model years. Nevertheless, while we believe there may be some
uncertainty, we do not agree that it is nearly as significant as a
number of manufacturers maintained, especially for passenger cars. The
most persuasive information received from stakeholders for passenger
cars concerned practicability issues in MYs 2017-2021, so the agency
tentatively concluded that the maximum feasible stringency levels for
passenger cars are only slightly different from the 4%/year levels
suggested as the high end preliminarily considered by the agency;
increasing on average 3.7%/year in MYs 2017-2021, and on average 4.5%/
year in MYs 2022-2025. For the overall MYs 2017-2025 period, the
maximum feasible stringency curves increase on average at 4.1%/year,
and our analysis in the proposal indicated that the costs and benefits
attributable to the 4% alternative and the preferred alternative for
passenger cars are very similar: the preferred alternative was 8.8
percent less expensive for manufacturers than the 4% alternative
(estimated total costs were $113 billion for the preferred alternative
and $124 billion for the 4% alternative), and achieved only $20 billion
less in total benefits than the 4% alternative (estimated total
benefits are $310 billion for the preferred alternative and $330
billion for the 4% alternative), which the agency stated was a very
small difference given that benefits are spread across the entire
lifetimes of all vehicles subject to the standards. The analysis also
showed that the lifetime cumulative fuel savings was only 5 percent
higher for the 4% alternative than the preferred alternative (the
estimated fuel savings was 104 billion

gallons for the preferred alternative, and 110 billion gallons for the
4% alternative). At the same time, the increase in average vehicle cost
in MY 2025 in the NPRM was 9.4 percent higher for the 4% alternative
(the estimated cost increase for the average vehicle was $2,023 for the
preferred alternative, and $2,213 for the 4% alternative).\1214\
---------------------------------------------------------------------------

    \1214\ See discussion at 76 FR 75243 et seq.
---------------------------------------------------------------------------

    NHTSA explained in the NPRM that we were concerned that requiring
manufacturers to invest that capital to meet higher standards in MYs
2017-2021, rather than allowing them to increase fuel economy in those
years slightly more slowly, would reduce the levels that would be
feasible in the second phase of the program by diverting research and
development resources to those earlier model years. Thus, after
considerable deliberation with EPA and consultation with CARB, NHTSA
tentatively selected the preferred alternative as the maximum feasible
alternative for MYs 2017-2025 passenger cars based on consideration of
inputs from manufacturers and the agency's independent analysis, which
reaches the stringency levels of the 4% alternative in MY 2025, but has
a slightly slower ramp up rate in the earlier years.
    Regarding light trucks, we explained that while NHTSA did not agree
with the manufacturer's overall cost assessments and believed that our
technology cost and effectiveness methodology allowed manufacturers to
preserve all necessary vehicle utility, the agency also believed there
was merit to some of the concerns raised in stakeholder feedback.
Specifically, concerns about longer redesign schedules for trucks,
compounded by the need to invest simultaneously in raising passenger
car fuel economy, may not have been fully captured in NHTSA's
preliminary analysis, which could lead manufacturers to implement
technologies that do not maintain vehicle utility, based on the cadence
of the standards under the 4% alternative. A number of manufacturers
repeatedly stated, in providing feedback, that the MYs 2012-2016
standards for trucks, while feasible, required significant investment
to reach the required levels, and that given the redesign schedule for
trucks, that level of investment throughout the entire MYs 2012-2025
time period was not sustainable. Based on the confidential business
information that manufacturers provided to the agencies through that
feedback, NHTSA explained that we believed that this point may be
valid. If the agency pushes CAFE increases that require considerable
sustained investment at a faster rate than industry redesign cycles,
adverse economic consequences could ensue. The best information that
the agency had at the NPRM, therefore, indicated that requiring light
truck fuel economy improvements at the 4% annual rate could create
potentially severe economic consequences. Our NRPM analysis indicated
that the preferred alternative had 48 percent lower cost than the 4%
alternative (estimated total costs were $44 billion for the preferred
alternative and $83 billion for the 4% alternative), and the total
benefits of the preferred alternative were 30 percent lower ($87
billion lower) than the 4% alternative (estimated total benefits were
$206 billion for the preferred alternative and $293 billion for the 4%
alternative), spread across the entire lifetimes of all vehicles
subject to the standards. The analysis also showed that the lifetime
cumulative fuel savings was 42 percent higher for the 4% alternative
than the preferred alternative (the estimated fuel savings was 69
billion gallons for the preferred alternative, and 98 billion gallons
for the 4% alternative). At the same time, the increase in average
vehicle cost in MY 2025 in the NPRM was 54 percent higher for the 4%
alternative (the estimated cost increase for the average vehicle was
$1,578 for the preferred alternative, and $2,423 for the 4%
alternative).
    Thus, evaluating the inputs from stakeholders and the agency's
independent analysis, the agency also considered further how it thought
the factors should be balanced to determine the maximum feasible light
truck standards for MYs 2017-2025. Based on that consideration of the
information before the agency and how it informs our balancing of the
factors, NHTSA tentatively concluded in the NPRM that 4%/year CAFE
stringency increases for light trucks in MYs 2017-2021 were likely
beyond maximum feasible, and in fact, in the earliest model years of
the MY 2017-2021 period, that the 3%/year and 2%/year alternatives for
trucks were also likely beyond maximum feasible. NHTSA therefore
tentatively concluded that the preferred alternative, which would in
MYs 2017-2021 increase on average 2.6%/year, and in MYs 2022-2025 would
increase on average 4.6%/year, was the maximum feasible level that the
industry can reach in those model years. For the overall MY 2017-2025
period, the maximum feasible stringency curves would increase on
average 3.5%/year.
    The agency also explained that NHTSA had accounted for the effect
of EPA's standards in light of the agencies' close coordination and the
fact that both sets of standards were developed together to harmonize
as part of the National Program. Given the close relationship between
fuel economy and CO2 emissions, and the efforts NHTSA and
EPA made to conduct joint analysis and jointly deliberate on
information and tentative conclusions,\1215\ the agencies have sought
to harmonize and align their proposed standards to the greatest extent
possible, consistent with their respective statutory authorities. Thus,
NHTSA tentatively concluded that the standards represented by the
preferred alternative were the maximum feasible standards for passenger
cars and light trucks in MYs 2017-2025, based on the information before
the agency at the time of the NPRM. We explained that while we
recognized that higher standards would help the need of the nation to
conserve more energy and might potentially be technologically feasible
(in the narrowest sense) during those model years, based on our
analysis and the evidence presented by the industry, higher standards
would not appear to represent the proper balancing for MYs 2017-2025
cars and trucks. We therefore concluded in the NPRM that the correct
balancing would recognize economic practicability concerns as discussed
above, and proposed standards based on the preferred alternative for
MYs 2017-2025.
---------------------------------------------------------------------------

    \1215\ NHTSA and EPA conducted joint analysis and jointly
deliberated on information and tentative conclusions related to
technology cost, effectiveness, manufacturers' capability to
implement technologies, the cadence at which manufacturers might
support the implementation of technologies, economic factors, and
the assessment of comments from manufacturers.
---------------------------------------------------------------------------

4. What comments did the agency receive regarding the proposed maximum
feasible levels?
    Of the several hundred thousand commenters, including industry and
union commenters, environmental and consumer groups, national security
interest groups, U.S. senators and representatives, State legislators,
State and local government organizations and representatives, and many
individual citizens, the considerable majority supported the proposed
levels of stringency, citing the significant benefits associated with
the standards.
    However, many commenters urged the agencies to set more stringent
standards. Individual commenters sent in thousands of form letters
calling on the agencies to set standards that require 60 mpg in 2025,
which they described as equivalent to a 6 percent/year rate of

increase.\1216\ NESCAUM also supported a 6 percent/year rate of
increase,\1217\ as did UCS, which stated that the agencies' analysis
showed that many current vehicles already meet the targets that would
apply to them under the future standards, and that the technology
exists to set standards that increase at 6 percent/year.\1218\
Ceres,\1219\ Consumers Union,\1220\ and UCS \1221\ argued that the
higher the standards, the greater the economic benefits (both to
consumers individually in terms of fuel savings and to the economy as a
whole), and therefore the final standards should be as stringent as
possible. NRDC commented that the agencies' determination of stringency
should account for the higher fuel price projections in the AEO 2012
Early Release, and that higher fuel prices would justify more
application of technology, and thus more stringent standards.\1222\
ACEEE commented that the agencies' analyses appeared to show that more
stringent alternatives than the one proposed were feasible for the
majority of the industry, and that the agencies' rejection of those
more stringent alternatives was insufficient given the relatively low
cost and considerable benefits associated with them.\1223\ ACEEE
suggested that the agencies show the cost of compliance in each year
for each manufacturer rather than focusing on MYs 2021 and 2025.\1224\
ICCT supported the proposed stringency increases, but expressed concern
that the proposed rule was not sufficiently technology-forcing, and
that credits and incentives might undermine the projected fuel savings
and emissions reductions.\1225\
---------------------------------------------------------------------------

    \1216\ See, e.g., Care2 form letters, Docket No. NHTSA-2010-
0131-0190; Sierra Club member form letters, Docket No. NHTSA-2010-
0131-0189.
    \1217\ NESCAUM, Docket No. EPA-HQ-OAR-2010-0799-9476, at 1-2.
    \1218\ UCS, Docket No. EPA-HQ-OAR-2010-0799-9567, at 6-8.
    \1219\ Ceres, Docket No. EPA-HQ-OAR-2010-0799-9475, at 3.
    \1220\ Consumers Union, Docket No. EPA-HQ-OAR-2010-0799-9454, at
6.
    \1221\ UCS at 6.
    \1222\ NRDC, Docket No. EPA-HQ-OAR-2010-0799-9472, at 9.
    \1223\ ACEEE, Docket No. EPA-HQ-OAR-2010-0799-9528, at 7.
    \1224\ Id.
    \1225\ ICCT, Docket No. NHTSA-2010-0131-0258, at 2.
---------------------------------------------------------------------------

    CBD provided extensive comments regarding why it thought the final
standards should be more stringent, commenting that the most stringent
alternative analyzed by NHTSA was the maximum feasible alternative,
since that is the only alternative that CBD believed would actually
reduce emissions.\1226\ CBD stated that given that much fuel economy-
improving technology already exists today (including mass reduction,
which CBD said should be mandated in greater amounts \1227\), given
that real-life technology costs will be much lower than the agencies
estimate, and given the tremendous benefits associated with the most
stringent alternative, therefore the most stringent alternative
represented the best balancing of the EPCA factors,\1228\ and choosing
the proposed alternative would leave ``substantial, achievable fuel
economy improvements and public benefits unrealized due to industry
objections.'' \1229\ CBD argued that the agencies appeared to be over-
emphasizing the importance of consumer choice ``and the continued
production of every vehicle in its current form over the need to
conserve energy,'' as evidenced by what CBD saw ``as soon as increased
FE begins to affect any attribute of any existing vehicle, stringency
increases cease.'' \1230\ CBD further argued that without an analysis
of ``maximized social benefits, where the benefits most optimally
compare to the anticipated costs,'' ``there is no rigorous analysis of
economic feasibility that justifies rejecting [the most stringent
alternative] as the appropriate standard for this rulemaking.'' \1231\
As discussed above in Section IV.D, CBD asserted that the proposed
standards were below the maximum feasible level because they were not
sufficiently technology-forcing, and because the agency had given too
much weight in the balancing of relevant factors to consumer demand.
---------------------------------------------------------------------------

    \1226\ CBD, Docket No. NHTSA-2010-0131-0255, at 23.
    \1227\ Id. at 6.
    \1228\  Id. at 23.
    \1229\ Id. at 8.
    \1230\ Id. at 4
    \1231\ Id. at 23.
---------------------------------------------------------------------------

    Other commenters argued that the final standards should be less
stringent than what was proposed. AFPM argued that because the agencies
had not employed a vehicle choice model in the NPRM analysis, the
agencies had chosen an alternative that required too much in the way of
electrification technologies, stating that ``[t]he agency predicts that
annual sales of hybrids, plug-in hybrids and all electric vehicles
could represent 15% of new sales by 2025,'' while ``[i]n reality, EVs,
HEVs, etc have been a huge disappointment for automakers.'' \1232\ AFPM
stated that therefore the standards were beyond maximum feasible.
Environmental Consultants of Michigan similarly argued that the
proposed standards are arbitrary and capricious because most vehicles
in existence today could not meet the 2025 standards, and the few that
could are all HEVs, PHEVs, or EVs, which cost significantly more than
the agencies' per-vehicle cost estimates for the 2025 standards, and
the agencies' cost estimates must therefore be incorrect.\1233\
---------------------------------------------------------------------------

    \1232\ AFPM, Docket No. EPA-HQ-OAR-2010-0799-9485, at 4-5.
    \1233\ Environmental Consultants of Michigan, NHTSA-2010-0131-
0166, at 5-6.
---------------------------------------------------------------------------

    The Alliance commented that its members supported the proposed
increases in stringency, but that consumers had to purchase the
vehicles that were made to meet those standards,\1234\ while several
individual industry commenters argued that the standards were very
challenging and possibly too stringent as applied to them. BMW, for
example, commented that because its vehicles are very ``content-
heavy,'' it had already implemented much of the technology examined by
the agencies, and thus would have to work harder than other
manufacturers to meet the standards.\1235\ BMW stated that in order to
comply, it would have to build significant numbers of EVs, which might
need government subsidies to encourage consumers to purchase
them.\1236\ VW presented analysis to make a similar argument for
itself,\1237\ and commented that the standards for cars were
significantly more stringent than the standards for trucks, and that
the car standards exceeded what VW would consider to be feasible and
balanced.\1238\ VW further stated that the standards for MYs 2022-2025
were too aggressive, and based on ``critical assumptions about the
market and technologies which are simply too uncertain to appropriately
comprehend.'' \1239\
---------------------------------------------------------------------------

    \1234\ Alliance, Docket No. NHTSA-2010-0131-0262, at 3.
    \1235\ BMW, Docket No. NHTSA-2010-0131-0250, at 3-4.
    \1236\ Id. at 2.
    \1237\ VW, Docket No. NHTSA-2010-0131-0247, at 10-12.
    \1238\ Id. at 8.
    \1239\ Id.
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    Many commenters focused on the stringency of the truck standards.
Some argued that the truck standards should be more stringent, and