agencies did not feel that lean-burn engines were feasible in the
timeframe of this rulemaking, so decided to reject any model runs where
they were selected. Due to the cost ineffectiveness of this technology,
it was never chosen. The agencies request comment on the
appropriateness of these phase-in caps as proxies for constraints that,
though not monetized by the agencies, nonetheless limit rates at which
these two technologies can practicably be deployed, and on the
appropriateness of setting inputs to stop applying phase-in caps to
other technologies in this analysis. Comments on this issue should
provide information supporting any alternative recommended inputs.
(f) Impact of Vehicle Technology Application Requirements
    Compared to prior analyses of light-duty standards, these model
changes, along with characteristics of the HD pickup and van fleet
result in some changes in the broad characteristics of the model's
application of technology to manufacturers' fleets. First, since the
number of HD pickup and van platforms in a portfolio is typically
small, compliance with standards may appear especially ``lumpy''
(compared to previous applications of the CAFE model to the more highly
segmented light-duty fleet), with significant over compliance when
widespread redesigns precede stringency increases, and/or significant
application of carried-forward (aka ``banked'') credits.
    Second, since the use of phase-in caps has been de-emphasized and
manufacturer technology deployment remains tied strongly to estimated
product redesign and freshening schedules, technology penetration rates
may jump more quickly as manufacturers apply technology to high-volume
products in their portfolio.
    By design, restrictions that enforce commonality of mass reduction
and aerodynamic technologies on variants of a platform, and those that
enforce engine inheritance, will result in fewer vehicle-technology
combinations in a manufacturer's future modeled fleet. These
restrictions are expected to more accurately capture the true costs
associated with producing and maintaining a product portfolio.
(g) Accounting for Test Weight, Payload, and Towing Capacity
    As mentioned above, NHTSA has also revised the CAFE model to
explicitly account for the regulatory ``binning'' of test weights used
to certify light-duty fuel economy and HD pickup and van fuel
consumption for purposes of evaluating fleet-level compliance with fuel
economy and fuel consumption standards. For HD pickups and vans, test
weight (TW) is based on adjusted loaded vehicle weight (ALVW), which is
defined as the average of gross vehicle weight rating (GVWR) and curb
weight (CW). TW values are then rounded, resulting in TW ``bins'':

ALVW <= 4,000 lb.: TW rounded to nearest 125 lb.
4,000 lb. < ALVW <= 5,500 lb.: TW rounded to nearest 250 lb.
ALVW > 5,500 lb.: TW rounded to nearest 500 lb.

    This ``binning'' of TW is relevant to calculation of fuel
consumption reductions accompanying mass reduction. Model inputs for
mass reduction (as an applied technology) are expressed in terms of a
percentage reduction of curb weight and an accompanying estimate of the
percentage reduction in fuel consumption, setting aside rounding of
test weight. Therefore, to account for rounding of test weight, NHTSA
has modified these calculations as follows:

[GRAPHIC] [TIFF OMITTED] TP13JY15.011

Where:

[Delta]CW = % change in curb weight (from model input),
[Delta]FCunrounded_TW = % change in fuel consumption
(from model input), without TW rounding,
[Delta]TW = % change in test weight (calculated), and
[Delta]FCrounded_TW = % change in fuel consumption
(calculated), with TW rounding.

    As a result, some applications of vehicle mass reduction will
produce no compliance benefit at all, in cases where the changes in
ALVW are too small to change test weight when rounding is taken into
account. On the other hand, some other applications of vehicle mass
reduction will produce significantly more compliance benefit than when
rounding is not taken into account, in cases where even small changes
in ALVW are sufficient to cause vehicles' test weights to increase by,
e.g., 500 lbs when rounding is accounted for. Model outputs now include
initial and final TW, GVWR, and GCWR (and, as before, CW) for each
vehicle model in each model year, and the agencies invite comment on
the extent to which these changes to account explicitly for changes in
TW are likely to produce more realistic estimates of the compliance
impacts of reductions in vehicle mass.
    In addition, considering that the regulatory alternatives in the
agencies' analysis all involve attribute-based standards in which
underlying fuel consumption targets vary with ``work factor'' (defined
by the agencies as the sum of three quarters of payload, one quarter of
towing capacity, and 500 lb. for vehicles with 4WD), NHTSA has modified
the CAFE model to apply inputs defining shares of curb weight reduction
to be ``returned'' to payload and shares of GVWR reduction to be
returned to towing capacity. The standards' dependence on work factor
provides some incentive to increase payload and towing capacity, both
of which are buyer-facing measures of vehicle utility. In the agencies'
judgment, this provides reason to assume that if vehicle mass is
reduced, manufacturers are likely to ``return'' some of the change to
payload and/or towing capacity. For this analysis, the agencies have
applied the following assumptions:
     GVWR will be reduced by half the amount by which curb
weight is reduced. In other words, 50 percent of the curb weight
reduction will be returned to payload.

     GCWR will not be reduced. In other words, 100 percent of
any GVWR reduction will be returned to towing capacity.
     GVWR/CW and GCWR/GVWR will not increase beyond levels
observed among the majority of similar vehicles (or, for outlier
vehicles, initial values):

   Table VI-16--Ratios for Modifying GVW and GCW as a Function of Mass
                                Reduction
------------------------------------------------------------------------
               Group                  Maximum ratios assumed enabled by
-----------------------------------            mass reduction
                                   -------------------------------------
                                         GVWR/CW           GCWR/GVWR
------------------------------------------------------------------------
Unibody...........................               1.75               1.50
Gasoline pickups >13k GVWR........               2.00               1.50
Other gasoline pickups............               1.75               2.25
Diesel SRW pickups................               1.75               2.50
All other.........................               1.75               2.25
------------------------------------------------------------------------

    The first of two of these inputs are specified along with standards
for each regulatory alternative, and the GVWR/CW and GCWR/GVWR ``caps''
are specified separately for each vehicle model in the analysis fleet.
    In addition, DOT has changed the model to prevent HD pickup and van
GVWR from falling below 8,500 lbs when mass reduction is applied
(because doing so would cause vehicles to be reclassified as light-duty
vehicles), and to treat any additional mass for hybrid electric
vehicles as reducing payload by the same amount (e.g., if adding a
strong HEV package to a vehicle involves a 350 pound penalty, GVWR is
assumed to remain unchanged, such that payload is also reduced by 350
lbs).
    The agencies invite comment on these methods for estimating how
changes in vehicle mass may impact fuel consumption, GVWR, and GCWR,
and on corresponding inputs to today's analysis.
(2) Development of the Analysis Fleet
    As discussed above, both agencies used DOT's CAFE modeling system
to estimate technology costs and application rates under each
regulatory alternative, including the no action alternative (which
reflects continuation of previously-promulgated standards). Impacts
under each of the ``action'' alternatives are calculated on an
incremental basis relative to impacts under the no action alternative.
The modeling system relies on many inputs, including an analysis fleet.
In order to estimate the impacts of potential standards, it is
necessary to estimate the composition of the future vehicle fleet.
Doing so enables estimation of the extent to which each manufacturer
may need to add technology in response to a given series of attribute-
based standards, accounting for the mix and fuel consumption of
vehicles in each manufacturer's regulated fleet. The agencies create an
analysis fleet in order to track the volumes and types of fuel economy-
improving and CO2-reducing technologies that are already
present in the existing vehicle fleet. This aspect of the analysis
fleet helps to keep the CAFE model from adding technologies to vehicles
that already have these technologies, which would result in ``double
counting'' of technologies' costs and benefits. An additional step
involved projecting the fleet sales into MYs 2019-2030. This represents
the fleet volumes that the agencies believe would exist in MYs 2019-
2030. The following presents an overview of the information and methods
applied to develop the analysis fleet, and some basic characteristics
of that fleet.
    The resultant analysis fleet is provided in detail at NHTSA's Web
site, along with all other inputs to and outputs from today's analysis.
The agencies invite comment on this analysis fleet and, in particular,
on any other information that should be reflected in an analysis fleet
used to update the agencies' analysis for the final rule. Also, the
agencies also invites comment on the potential expansion of this
analysis fleet such that the impacts of new HD pickup and van standards
can be estimated within the context of an integrated analysis of light-
duty vehicles and HD pickups and vans, accounting for interactions
between the fleets.
(a) Data Sources
    Most of the information about the vehicles that make up the 2014
analysis fleet was gathered from the 2014 Pre-Model Year Reports
submitted to EPA by the manufacturers under Phase 1 of Fuel Efficiency
and GHG Emission Program for Medium- and Heavy-Duty Trucks, MYs 2014-
2018.
    The major manufacturers of class 2b and class 3 trucks (Chrysler,
Ford and GM) were asked to voluntarily submit updates to their Pre-
Model Year Reports. Updated data were provided by Chrysler and GM.
These updated data were used in constructing the analysis fleet for
these manufacturers.
    The agencies agreed to treat this information as Confidential
Business Information (CBI) until the publication of the proposed rule.
This information can be made public at this time because by now all
MY2014 vehicle models have been produced, which makes data about them
essentially public information.
    These data (by individual vehicle configuration produced in MY2014)
include: Projected Production Volume/MY2014 Sales, Drive Type, Axle
Ratio, Work Factor, Curb Weight, Test Weight,\359\ GVWR, GCWR, Fuel
Consumption (gal/100 mile), engine type (gasoline or diesel), engine
displacement, transmission type and number of gears.
---------------------------------------------------------------------------

    \359\ Chrysler and GM did not provide test weights in their
submittals. Test weights were calculated as the average of GVWR and
curb weight rounded up to the nearest 100 lb.
---------------------------------------------------------------------------

    The column ``Engine'' of the Pre-Model Year report for each OEM was
copied to the column ``Engine Code'' of the vehicle sheet of the CAFE
model market data input file. Values of ``Engine'' were changed to
Engine Codes for use in the CAFE model. The codes indicated on the
vehicle sheet map the detailed engine data on the engine sheet to the
appropriate vehicle on the vehicle sheet of the CAFE model input file.
    The column ``Trans Class'' of the Pre-Model Year report for each
OEM was copied to the column ``Transmission Code'' of the vehicle sheet
of the market data input file. Values of ``Trans Class'' were changed
to Transmission Codes for use in the CAFE model. The codes indicated on
the vehicle sheet map the detailed transmission data on the
transmission sheet to the appropriate vehicle on the vehicle sheet of
the CAFE model input file.
    In addition to information about each vehicle, the agencies need
additional

information about the fuel economy-improving/CO2-reducing
technologies already on those vehicles in order to assess how much and
which technologies to apply to determine a path toward future
compliance. Thus, the agencies augmented this information with
publicly-available data that includes more complete technology
descriptions. Specific engines and transmissions associated with each
manufacturer's trucks were identified using their respective internet
sites. Detailed technical data on individual engines and transmissions
indicated on the engine sheet and transmission sheet of the CAFE model
input file were then obtained from manufacturer internet sites, spec
sheets and product literature, Ward's Automotive Group and other
commercial internet sites such as cars.com, edmunds.com, and
motortrend.com. Specific additional information included:
     ``Fuel Economy on Secondary Fuel'' was calculated as E85 =
.74 gasoline fuel economy, or B20 = .98 diesel fuel economy. These
values were duplicated in the columns ``Fuel Economy (Ethanol-85)'' and
``Fuel Economy (Biodiesel-20)'' of the CAFE market data input file.
     Values in the columns ``Fuel Share (Gasoline)'', ``Fuel
Share (Ethanol-85)'', ``Fuel Share (Diesel),'' and ``Fuel Share
(Biodiesel-20)'' are Volpe assumptions.
     The CAFE model also requires that values of Origin,
Regulatory Class, Technology Class, Safety Class, and Seating (Max) be
present in the file in order for the model to run. Placeholder values
were added in these columns.
     In addition to the data taken from the OEM Pre Model Year
submittals, NHTSA added additional data for use by the CAFE model.
These included Platform, Refresh Years, Redesign Years, MSRP, Style,
Structure and Fuel Capacity.
     MSRP was obtained from web2carz.com and the OEM Web sites.
     Fuel capacity was obtained from OEM spec sheets and
product literature.
     The Structure values (Ladder, Unibody) used by the CAFE
model were added. These were determined from OEM product literature and
the automotive press. It should be noted that the new vans such as the
Transit in fact utilize a ladder/unibody structure. Ford product
literature uses the term ``Uniladder'' to describe the structure. Vans
based on this structure are noted in the Vehicle Notes column of the
NHTSA input file.
     Style values used by the CAFE model were also added:
Chassis Cab, Cutaway, Pickup and Van.
(b) Vehicle Redesign Schedules and Platforms
    Product cadence in the Class 2b and 3 pickup market has
historically ranged from 7-9 years between major redesigns. However,
due to increasing competitive pressures and consumer demands the agency
anticipates that manufacturers will generally shift to shorter design
cycles resembling those of the light duty market. Pickup truck
manufacturers in the Class 2b and 3 segments are shown to adopt
redesign cycles of six years, allowing two redesigns prior to the end
of the regulatory period in 2025. The agencies request comment on the
anticipated future use of redesign cycles in this product segment.
    The Class 2b and 3 van market has changed markedly from five years
ago. Ford, Nissan, Ram and Daimler have adopted vans of ``Euro Van''
appearance, and in many cases now use smaller turbocharged gasoline or
diesel engines in the place of larger, naturally-aspirated V8s. The
2014 Model Year used in this analysis represents a period where most
manufacturers, with the exception of General Motors, have recently
introduced a completely redesigned product after many years. The van
segment has historically been one of the slowest to be redesigned of
any product segment, with some products going two decades or more
between redesigns.
    Due to new entrants in the field and increased competition, the
agencies anticipate that most manufacturers will increase the pace of
product redesigns in the van segment, but that they will continue to
trail other segments. The cycle time used in this analysis is
approximately ten years between major redesigns, allowing manufacturers
only one major redesign during the regulatory period. The agencies
request comment on this anticipated product design cycle.
    Additional detail on product cadence assumptions for specific
manufacturers is located in Chapter 10 of the draft RIA.
(c) Sales Volume Forecast
    Since each manufacturer's required average fuel consumption and GHG
levels are sales-weighted averages of the fuel economy/GHG targets
across all model offerings, sales volumes play a critical role in
estimating that burden. The CAFE model requires a forecast of sales
volumes, at the vehicle model-variant level, in order to simulate the
technology application necessary for a manufacturer to achieve
compliance in each model year for which outcomes are simulated.
    For today's analysis, the agencies relied on the MY 2014 pre-model-
year compliance submissions from manufacturers to provide sales volumes
at the model level based on the level of disaggregation in which the
models appear in the compliance data. However, the agencies only use
these reported volumes without adjustment for MY 2014. For all future
model years, we combine the manufacturer submissions with sales
projections from the 2014 Annual Energy Outlook Reference Case and IHS
Automotive to determine model variant level sales volumes in future
years.\360\ The projected sales volumes by class that appear in the
2014 Annual Energy Outlook as a result of a collection of assumptions
about economic conditions, demand for commercial miles traveled, and
technology migration from light-duty pickup trucks in response to the
concurrent light-duty CAFE/GHG standards. These are shown in Chapter 2
of the draft RIA.
---------------------------------------------------------------------------

    \360\ Tables from AEO's forecast are available at http://www.eia.gov/oiaf/aeo/tablebrowser/. The agencies also made use of
the IHS Automotive Light Vehicle Production Forecast (August 2014).
---------------------------------------------------------------------------

    For this analysis, the agencies have limited this analysis fleet to
class 2b and 3 HD pickups and vans. However, especially considering
interactions between the light-duty and HD pickup and van fleets (e.g.,
MDPVs being included in the light-duty fleet), the agencies are
evaluating the potential to analyze the fleets in an integrated fashion
for the final rule, and invite comment on the extent to which doing so
could provide more realistic estimates of the incremental impacts of
new standards applicable HD pickups and vans.
    The projection of total sales volumes for the Class 2b and 3 market
segment was based on the total volumes in the 2014 AEO Reference Case.
For the purposes of this analysis, the AEO2014 calendar year volumes
have been used to represent the corresponding model-year volumes. While
AEO2014 provides enough resolution in its projections to separate the
volumes for the Class 2b and 3 segments, the agencies deferred to the
vehicle manufacturers and chose to rely on the relative shares present
in the pre-model-year compliance data.
    The relative sales share by vehicle type (van or pickup truck, in
this case) was derived from a sales forecast that the agencies
purchased from IHS Automotive, and applied to the total volumes in the
AEO2014 projection. Table VI-17 shows the implied shares of the total
new 2b/3 vehicle market broken down by manufacturer and vehicle type.

                                                               Table VI-17--IHS Automotive Market Share Forecast for 2b/3 Vehicles
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Model year market share
                 Manufacturer                                 Style              ---------------------------------------------------------------------------------------------------------------
                                                                                2015  (%)       2016  (%)       2017  (%)       2018  (%)       2019  (%)       2020  (%)       2021  (%)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Daimler.......................................  Van.............................               3               3               3               3               3               3               3
Fiat..........................................  Van.............................               2               2               2               2               2               2               3
Ford..........................................  Van.............................              16              17              17              17              18              18              18
General Motors................................  Van.............................              12              12              11              12              13              13              13
Nissan........................................  Van.............................               2               2               2               2               2               2               2
Daimler.......................................  Pickup..........................               0               0               0               0               0               0               0
Fiat..........................................  Pickup..........................              14              14              14              14              11              12              12
Ford..........................................  Pickup..........................              28              27              30              30              30              27              26
General Motors................................  Pickup..........................              23              23              21              21              21              22              23
Nissan........................................  Pickup..........................               0               0               0               0               0               0               0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Within those broadly defined market shares, volumes at the
manufacturer/model-variant level were constructed by applying the
model-variant's share of manufacturer sales in the pre-model-year
compliance data for the relevant vehicle style, and multiplied by the
total volume estimated for that manufacturer and that style.
    After building out a set of initial future sales volumes based on
the sources described above, the agencies attempted to incorporate new
information about changes in sales mix that would not be captured by
either the existing sales forecasts or the simulated technology changes
in vehicle platforms. In particular, Ford has announced intentions to
phase out their existing Econoline vans, gradually shifting volumes to
the new Transit platform for some model variants (notably chassis cabs
and cutaways variants) and eliminating offerings outright for complete
Econoline vans as early as model year 2015. In the case of complete
Econoline vans, the volumes for those vehicles were allocated to MY2015
Transit vehicles based on assumptions about likely production splits
for the powertrains of the new Transit platform. The volumes for
complete Econoline vans were shifted at ratios of 50 percent, 35
percent, and 15 percent for 3.7 L, 3.5 L Eco-boost, and 3.2 L diesel,
respectively. Within each powertrain, sales were allocated based on the
percentage shares present in the pre-model-year compliance data. The
chassis cab and cutaway variants of the Econolines were phased out
linearly between MY2015 and MY2020, at which time the Econolines cease
to exist in any form and all corresponding volume resides with the
Transits.
(3) Additional Technology Cost and Effectiveness Inputs
    In addition to the base technology cost and effectiveness inputs
described in VI. of this preamble, the CAFE model has some additional
cost and effectiveness inputs, described as follows.
    The CAFE model accommodates inputs to adjust accumulated
effectiveness under circumstances when combining multiple technologies
could result in underestimation or overestimation of total incremental
effectiveness relative to an ``unevolved'' baseline vehicle. These so-
called synergy factors may be positive, where the combination of the
technologies results in greater improvement than the additive
improvement of each technology, or negative, where the combination of
the technologies is lower than the additive improvement of each
technology. The synergy factors used in this analysis are described in
VI-18.

               Table VI-18--Technology Pair Effectiveness Synergy Factors for HD Pickups and Vans
----------------------------------------------------------------------------------------------------------------
                                                Adjustment
               Technology pair                      (%)               Technology pair           Adjustment  (%)
----------------------------------------------------------------------------------------------------------------
8SPD/CCPS...................................           -4.60  IATC/CCPS......................              -1.30
8SPD/DEACO..................................           -4.60  IATC/DEACO.....................              -1.30
8SPD/ICP....................................           -4.60  IATC/ICP.......................              -1.30
8SPD/TRBDS1.................................            4.60  IATC/TRBDS1....................               1.30
AERO2/SHEV1.................................            1.40  MR1/CCPS.......................               0.40
CCPS/IACC1..................................           -0.40  MR1/DCP........................               0.40
CCPS/IACC2..................................           -0.60  MR1/VVA........................               0.40
DCP/IACC1...................................           -0.40  MR2/ROLL1......................              -0.10
DCP/IACC2...................................           -0.60  MR2/SHEV1......................              -0.40
DEACD/IATC..................................           -0.10  NAUTO/CCPS.....................              -1.70
DEACO/IACC2.................................           -0.80  NAUTO/DEACO....................              -1.70
DEACO/MHEV..................................           -0.70  NAUTO/ICP......................              -1.70
DEACS/IATC..................................           -0.10  NAUTO/SAX......................              -0.40
DTURB/IATC..................................            1.00  NAUTO/TRBDS1...................               1.70
DTURB/MHEV..................................           -0.60  ROLL1/AERO1....................               0.10
DTURB/SHEV1.................................           -1.00  ROLL1/SHEV1....................               1.10
DVVLD/8SPD..................................           -0.60  ROLL2/AERO2....................               0.20
DVVLD/IACC2.................................           -0.80  SHFTOPT/MHEV...................              -0.30
DVVLD/IATC..................................           -0.60  TRBDS1/MHEV....................               0.80
DVVLD/MHEV..................................           -0.70  TRBDS1/SHEV1...................              -3.30
DVVLS/8SPD..................................           -0.60  TRBDS1/VVA.....................              -8.00
DVVLS/IACC2.................................           -0.80  TRBDS2/EPS.....................              -0.30
DVVLS/IATC..................................           -0.50  TRBDS2/IACC2...................              -0.30
DVVLS/MHEV..................................           -0.70  TRBDS2/NAUTO...................              -0.50
                                              ..............  VVA/IACC1......................              -0.40
                                              ..............  VVA/IACC2......................              -0.60
                                              ..............  VVA/IATC.......................              -0.60
----------------------------------------------------------------------------------------------------------------

    The CAFE model also accommodates inputs to adjust accumulated
incremental costs under circumstances when the application sequence
could result in underestimation or overestimation of total incremental
costs relative to an ``unevolved'' baseline vehicle. For today's
analysis, the agencies have applied one such adjustment, increasing the
cost of medium-sized gasoline engines by $513 in cases where
turbocharging and engine downsizing is applied with variable valve
actuation.
    The analysis performed using Method A also applied cost inputs to
address some costs encompassed neither by the agencies' estimates of
the direct cost to apply these technologies, nor by the agencies'
methods for ``marking up'' these costs to arrive at increases in the
new vehicle purchase costs. To account for the additional costs that
could be incurred if a technology is applied and then quickly replaced,
the CAFE model accommodates inputs specifying a ``stranded capital
cost'' specific to each technology. For this analysis, the model was
run with inputs to apply about $78 of additional cost (per engine) if
gasoline engine turbocharging and downsizing (separately for each
``level'' considered) is applied and then

immediately replaced, declining steadily to zero by the tenth model
year following initial application of the technology. The model also
accommodates inputs specifying any additional changes owners might
incur in maintenance and post-warranty repair costs. For this analysis,
the model was run with inputs indicating that vehicles equipped with
less rolling-resistant tires could incur additional tire replacement
costs equivalent to $21-$23 (depending on model year) in additional
costs to purchase the new vehicle. The agencies did not, however,
include inputs specifying any potential changes repair costs that might
accompany application of any of the above technologies. A sensitivity
analysis using Method A, discussed below, includes a case in which
repair costs are estimated using factors consistent with those
underlying the indirect cost multipliers used to mark up direct costs
for the agencies' central analysis.
    The agencies invite comment on all efficacy and cost inputs
involved in today's analysis and request that commenters provide any
additional data or forward-looking estimates that could be used to
support alternative inputs, including those related to costs beyond
those reflected in the cost to purchase new vehicles.
(4) Other Analysis Inputs
    In addition to the inputs summarized above, the analysis of
potential standards for HD pickups and vans makes use of a range of
other estimates and assumptions specified as inputs to the CAFE
modeling system. Some significant inputs (e.g., estimates of future
fuel prices) also applicable to other MDHD segments are discussed below
in Section IX. Others more specific to the analysis of HD pickups and
vans are as follows:
(a) Vehicle Survival and Mileage Accumulation:
    Today's analysis estimates the travel, fuel consumption, and
emissions over the useful lives of vehicles produced during model years
2014-2030. Doing so requires initial estimates of these vehicles'
survival rates (i.e., shares expected to remain in service) and mileage
accumulation rates (i.e., anticipated annual travel by vehicles
remaining in service), both as a function of vehicle vintage (i.e.,
age). These estimates are based on an empirical analysis of changes in
the fleet of registered vehicles over time, in the case of survival
rates, and usage data collected as part of the last Vehicle In Use
Survey (the 2002 VIUS), in the case of mileage accumulation.
(b) Rebound Effect
    Expressed as an elasticity of mileage accumulation with respect to
the fuel cost per mile of operation, the agencies have applied a
rebound effect of 10 percent for today's analysis.
(c) On-Road ``Gap''
    The model was run with a 20 percent adjustment to reflect
differences between on-road and laboratory performance.
(d) Fleet Population Profile
    Though not reported here, cumulative fuel consumption and
CO2 emissions are presented in the accompanying draft EIS,
and these calculations utilize estimates of the numbers of vehicles
produced in each model year remaining in service in calendar year 2014.
The initial age distribution of the registered vehicle population in
2014 is based on vehicle registration data acquired by NHTSA from R.L.
Polk Company.
(e) Past Fuel Consumption Levels
    Though not reported here, cumulative fuel consumption and
CO2 emissions are presented in the accompanying draft EIS,
and these calculations require estimates of the performance of vehicles
produced prior to model year 2014. Consistent with AEO 2014, the model
was run with the assumption that gasoline and diesel HD pickups and
vans averaged 14.9 mpg and 18.6 mpg, respectively, with gasoline
versions averaging about 48 percent of production.
(f) Long-Term Fuel Consumption Levels
    Though not reported here, longer-term estimates of fuel consumption
and emissions are presented in the accompanying draft EIS. These
estimates include calculations involving vehicle produced after MY 2030
and, consistent with AEO 2014, the model was run with the assumption
that fuel consumption and CO2 emission levels will continue
to decline at 0.05 percent annually (compounded) after MY 2030.
(g) Payback Period
    To estimate in what sequence and to what degree manufacturers might
add fuel-saving technologies to their respective fleets, the CAFE model
iteratively ranks remaining opportunities (i.e., applications of
specific technologies to specific vehicles) in terms of effective cost,
primary components of which are the technology cost and the avoided
fuel outlays, attempting to minimize effective costs incurred.\361\
Depending on inputs, the model also assumes manufacturers may improve
fuel consumption beyond requirements insofar as doing so will involve
applications of technology at negative effective cost--i.e., technology
application for which buyers' up-front costs are quickly paid back
through avoided fuel outlays. This calculation includes only fuel
outlays occurring within a specified payback period. For this analysis,
a payback period of 6 months was applied for the dynamic baseline case,
or Alternative 1b. Thus, for example, a manufacturer already in
compliance with standards is projected to apply a fuel consumption
improvement projected to cost $250 (i.e., as a cost that could be
charged to the buyer at normal profit to the manufacturer) and reduce
fuel costs by $500 in the first year of vehicle operation. The agencies
have conducted the same analysis applying a payback period of 0 months
for the flat baseline case, or Alternative 1a.
---------------------------------------------------------------------------

    \361\ Volpe CAFE Model, available at http://www.nhtsa.gov/fuel-economy.
---------------------------------------------------------------------------

(h) Civil Penalties
    EPCA and EISA require that a manufacturer pay civil penalties if it
does not have enough credits to cover a shortfall with one or both of
the light-duty CAFE standards in a model year. While these provisions
do not apply to HD pickups and vans, at this time, the CAFE model will
show civil penalties owed in cases where available technologies and
credits are estimated to be insufficient for a manufacturer to achieve
compliance with a standard. These model-reported estimates have been
excluded from this analysis.
(i) Coefficients for Fatality Calculations
    Today's analysis considered the potential effects on crash safety
of the technologies manufacturers may apply to their vehicles to meet
each of the regulatory alternatives. NHTSA research has shown that
vehicle mass reduction affects overall societal fatalities associated
with crashes \362\ and, most relevant to this proposal, mass reduction
in heavier light- and medium-duty vehicles has an overall beneficial
effect on societal fatalities. Reducing the mass of a heavier vehicle
involved in a crash with another vehicle(s) makes it less likely there
will be fatalities among the occupants of the other vehicles. In
addition to the effects of mass reduction, the analysis anticipates
that

the proposed standards, by reducing the cost of driving HD pickups and
vans, would lead to increased travel by these vehicles and, therefore,
more crashes involving these vehicles. The Method A analysis considers
overall impacts considering both of these factors, using a methodology
similar to NHTSA's analyses for the MYs 2017--2025 CAFE and GHG
emission standards.
---------------------------------------------------------------------------

    \362\ U.S. DOT/NHTSA, Relationships Between Fatality Risk Mass
and Footprint in MY 2000-2007 PC and LTVs, ID: NHTSA-2010-0131-0336,
Posted August 21, 2012.
---------------------------------------------------------------------------

    The Method A analysis includes estimates of the extent to which HD
pickups and vans produced during MYs 2014-2030 may be involved in fatal
crashes, considering the mass, survival, and mileage accumulation of
these vehicles, taking into account changes in mass and mileage
accumulation under each regulatory alternative. These calculations make
use of the same coefficients applied to light trucks in the MYs 2017-
2025 CAFE rulemaking analysis. Baseline rates of involvement in fatal
crashes are 13.03 and 13.24 fatalities per billion miles for vehicles
with initial curb weights above and below 4,594 lbs, respectively.
Considering that the data underlying the corresponding statistical
analysis included observations through calendar year 2010, these rates
are reduced by 9.6 percent to account for subsequent impacts of recent
Federal Motor Vehicle Safety Standards (FMVSS) and anticipated
behavioral changes (e.g., continued increases in seat belt use). For
vehicles above 4,594 lbs--i.e., the majority of the HD pickup and van
fleet--mass reduction is estimated to reduce the net incidence of
highway fatalities by 0.34 percent per 100 lbs of removed curb weight.
For the few HD pickups and vans below 4,594 lbs, mass reduction is
estimated to increase the net incidence of highway fatalities by 0.52
percent per 100 lbs. Consistent with DOT guidance, the social cost of
highway fatalities is estimated using a value of statistical life (VSL)
of $9.36m in 2014, increasing thereafter at 1.18 percent annually.
(j) Compliance Credit Provisions
    Today's analysis accounts for the potential to over comply with
standards and thereby earn compliance credits, applying these credits
to ensuring compliance requirements. In doing so, the agencies treat
any unused carried-forward credits as expiring after five model years,
consistent with current and proposed standards. For today's analysis,
the agencies are not estimating the potential to ``borrow''--i.e., to
carry credits back to past model years.
(k) Emission Factors
    While CAFE model calculates vehicular CO2 emissions
directly on a per-gallon basis using fuel consumption and fuel
properties (density and carbon content), the model calculates emissions
of other pollutants (methane, nitrogen oxides, ozone precursors, carbon
monoxide, sulfur dioxide, particulate matter, and air toxics) on a per-
mile basis. In doing so, the Method A analysis used corresponding
emission factors estimated using EPA's MOVES model.\363\ To estimate
emissions (including CO2) from upstream processes involved
in producing, distributing, and delivering fuel, NHTSA has applied
emission factors--all specified on a gram per gallon basis--derived
from Argonne National Laboratory's GREET model.\364\
---------------------------------------------------------------------------

    \363\ EPA MOVES model available at http://www.epa.gov/otaq/models/moves/index.htm (last accessed Feb 23, 2015).
    \364\ GREET (Greenhouse Gases, Regulated Emissions, and Energy
Use in Transportation) Model, Argonne National Laboratory, https://greet.es.anl.gov/.
---------------------------------------------------------------------------

(l) Refueling Time Benefits
    To estimate the value of time savings associated with vehicle
refueling, the Method A analysis used estimates that an average
refueling event involves refilling 60 percent of the tank's capacity
over the course of 3.5 minutes, at an hourly cost of $27.22.
(m) External Costs of Travel
    Changes in vehicle travel will entail economic externalities. To
estimate these costs, the Method A analysis used estimates that
congestion-, accident-, and noise-related externalities will total 5.1
[cent]/mi., 2.8 [cent]/mi., and 0.1 [cent]/mi., respectively.
(n) Ownership and Operating Costs
    Method A results predict that the total cost of vehicle ownership
and operation will change not just due to changes in vehicle price and
fuel outlays, but also due to some other costs likely to vary with
vehicle price. To estimate these costs, NHTSA has applied factors of
5.5 percent (of price) for taxes and fees, 15.3 percent for financing,
19.2 percent for insurance, 1.9 percent for relative value loss. The
Method A analysis also estimates that average vehicle resale value will
increase by 25 percent of any increase in new vehicle price.
(5) DOT CAFE Model Analysis of Impacts of Regulatory Alternatives for
HD Pickups and Vans
(a) Industry Impacts
    The agencies' analysis fleet provides a starting point for
estimating the extent to which manufacturers might add fuel-saving
(and, therefore, CO2-avoiding) technologies under various
regulatory alternatives, including the no-action alternative that
defines a baseline against which to measure estimated impacts of new
standards. The analysis fleet is a forward-looking projection of
production of new HD pickups and vans, holding vehicle characteristics
(e.g., technology content and fuel consumption levels) constant at
model year 2014 levels, and adjusting production volumes based on
recent DOE and commercially-available forecasts. This analysis fleet
includes some significant changes relative to the market
characterization that was used to develop the Phase 1 standards
applicable starting in model year 2014; in particular, the analysis
fleet includes some new HD vans (e.g., Ford's Transit and Fiat/
Chrysler's Promaster) that are considerably more fuel-efficient than HD
vans these manufacturers have previously produced for the U.S. market.
    While the proposed standards are scheduled to begin in model year
2021, the requirements they define are likely to influence
manufacturers' planning decisions several years in advance. This is
true in light-duty planning, but accentuated by the comparatively long
redesign cycles and small number of models and platforms offered for
sale in the 2b/3 market segment. Additionally, manufacturers will
respond to the cost and efficacy of available fuel consumption
improvements, the price of fuel, and the requirements of the Phase 1
standards that specify maximum allowable average fuel consumption and
GHG levels for MY2014-MY2018 HD pickups and vans (the final standard
for MY2018 is held constant for model years 2019 and 2020). The
forward-looking nature of product plans that determine which vehicle
models will be offered in the model years affected by the proposed
standards lead to additional technology application to vehicles in the
analysis fleet that occurs in the years prior to the start of the
proposed standards. From the industry perspective, this means that
manufacturers will incur costs to comply with the proposed standards in
the baseline and that the total cost of the proposed regulations will
include some costs that occur prior to their start, and represent
incremental changes over a world in which manufacturers will have
already modified their vehicle offerings compared to today.

   Table VI-19--MY2021 Baseline Costs for Manufacturers in 2b/3 Market
           Segment in the Dynamic Baseline, or Alternative 1b
------------------------------------------------------------------------
                                                  Average     Total cost
                 Manufacturer                    technology    increase
                                                  cost ($)       ($m)
------------------------------------------------------------------------
Chrysler/Fiat.................................          275           27
Daimler.......................................           18            0
Ford..........................................          258           78
General Motors................................          782          191
Nissan........................................          282            3
Industry......................................          442          300
------------------------------------------------------------------------

    As Table VI-19 shows, the industry as a whole is expected to add
about $440 of new technology to each new vehicle model by 2021 under
the no-action alternative defined by the Phase 1 standards. Reflecting
differences in projected product offerings in the analysis fleet, some
manufacturers (notably Daimler) are significantly less constrained by
the Phase 1 standards than others and face lower cost increases as a
result. General Motors (GM) shows the largest increase in average
vehicle cost, but results for GM's closest competitors (Ford and
Chrysler/Fiat) do not include the costs of their recent van redesigns,
which are already present in the analysis fleet (discussed in greater
detail below).
    The above results reflect the assumption that manufacturers having
achieved compliance with standards might act as if buyers are willing
to pay for further fuel consumption improvements that ``pay back''
within 6 months (i.e., those improvements whose incremental costs are
exceeded by savings on fuel within the first six months of ownership).
It is also possible that manufacturers will choose not to migrate cost-
effective technologies to the 2b/3 market segment from similar vehicles
in the light-duty market. To examine this possibility, all regulatory
alternatives were also analyzed using the DOT CAFE model (Method A)
with a 0-month payback period in lieu of the 6-month payback period
discussed above. (A sensitivity analysis using Method A, discussed
below, also explores longer payback periods, as well as the combined
effect of payback period and fuel price on vehicle design decisions).
Resultant technology costs in model year 2021 results for the no-action
alternative, summarized in Table VI-20 below, are quite similar to
those shown above for the 6-month payback period. Due to the similarity
between the two baseline characterizations, results in the following
discussion represent differences relative to only the 6-month payback
baseline.

 Table VI-20--MY2021 Baseline Costs for HD Pickups and Vans in the Flat
                       Baseline, or Alternative 1a
------------------------------------------------------------------------
                                                  Average     Total cost
                 Manufacturer                    technology    increase
                                                  cost ($)       ($m)
------------------------------------------------------------------------
Chrysler/Fiat.................................          268           27
Daimler.......................................            0            0
Ford..........................................          248           75
General Motors................................          767          188
Nissan........................................          257            3
Industry......................................          431          292
------------------------------------------------------------------------

    The results below represent the impacts of several regulatory
alternatives, including those defined by the proposed standards, as
incremental changes over the baseline, where the baseline is defined as
the state of the world in the absence of the proposed regulatory
action. Large-scale, macroeconomic conditions like fuel prices are
constant across all alternatives, including the baseline, as are the
fuel economy improvements under the no-action alternative defined by
the Phase 1 MDHD rulemaking that covers model years 2014-2018 and is
constant from model year 2018 through 2020. In the baseline scenario,
the Phase 1 standards are assumed to remain in place and at 2018 levels
throughout the analysis (i.e. MY 2030). The only difference between the
definitions of the alternatives is the stringency of the proposed
standards starting in MY 2021 and continuing through either MY 2025 or
MY 2027, and all of the differences in outcomes across alternatives are
attributable to differences in the standards.
    The standards vary in stringency across regulatory alternatives (1-
5), but as discussed above, all of the standards are based on the curve
developed in the Phase 1 standards that relate fuel economy and GHG
emissions to a vehicle's work factor. The alternatives considered here
represent different rates of annual increase in the curve defined for
model year 2018, growing from a 0 percent annual increase (Alternative
1, the baseline or ``no-action'' alternative) up to a 4 percent annual
increase (Alternative 5). Table VI-21 shows a summary \365\ of outcomes
by alternative incremental to the baseline (Alternative 1b) for Model
Year 2030 \366\, with the exception of technology penetration rates,
which are absolute.
---------------------------------------------------------------------------

    \365\ NHTSA generated hundreds of outputs related to economic
and environmental impacts, each available technology, and the costs
associated with the rule. A more comprehensive treatment of these
outputs appears in Chapter 10 of the draft RIA.
    \366\ The DOT CAFE model estimates that redesign schedules will
``straddle'' model year 2027, the latest year for which the agencies
are proposing increases in the stringency of fuel consumption and
GHG standards. Considering also that today's analysis estimates some
earning and application of ``carried forward'' compliance credits,
the model was run extending the analysis through model year 2030.
---------------------------------------------------------------------------

    The technologies applied by the CAFE model have been grouped (in
most cases) to give readers a general sense of which types of
technology are applied more frequently than others, and are more likely
to be offered in new class 2b/3 vehicles once manufacturers are fully
compliant with the standards in the alternative. Model year 2030 was
chosen to account for technology application that occurs once the
standards have stabilized, but manufacturers are still redesigning
products to achieve compliance--generating technology costs and
benefits in those model years. The summaries of technology penetration
are also intended to reflect the relationship between technology
application and cost increases across the alternatives. The table rows
present the degree to which specific technologies will be present in
new class 2b and class 3 vehicles in 2030, and correspond to: Variable
valve timing (VVT) and/or variable valve lift (VVL), cylinder
deactivation, direct injection, engine turbocharging, 8-speed automatic
transmissions, electric power-steering and accessory improvements,
micro-hybridization (which reduces engine idle, but does not assist
propulsion), full hybridization (integrated starter generator or strong
hybrid that assists propulsion and recaptures braking energy), and
aerodynamic improvements to the vehicle shape. In addition to the
technologies in the following tables, there are some lower-complexity
technologies that have high market penetration across all the
alternatives and manufacturers; low rolling-resistance tires, low
friction lubricants, and reduced engine friction, for example.

    Table VI-21--Summary of HD Pickups and Vans Alternatives' Impact on Industry Versus the Dynamic Baseline,
                                                 Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
Total Stringency Increase.......................            9.6%           16.2%           16.3%           18.5%
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           19.04           20.57           20.57           21.14
Achieved........................................           19.14           20.61           20.83           21.27
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.25            4.86            4.86            4.73
Achieved........................................            5.22            4.85            4.80            4.70
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             495             458             458             446
Achieved........................................             491             458             453             444
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................              46              46              46              46
Cylinder Deac...................................              29              21              21              21
Direct Injection................................              17              25              31              32
Turbocharging...................................              55              63              63              63
8-Speed AT......................................              67              96              96              97
EPS, Accessories................................              54              80              79              79
Stop Start......................................               0               0              10              13
Hybridization \a\...............................               0               8              35              51
Aero. Improvements..............................              36              78              78              78
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................             239             243             325             313
CW (%)..........................................             3.7             3.7             5.0             4.8
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \b\.................................             578           1,348           1,655           2,080
Total ($m) \c\..................................             437           1,019           1,251           1,572
Payback period (m) \c\..........................              25              31              34              38
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Includes mild hybrids (ISG) and strong HEVs.
\b\ Values used in Methods A & B.
\c\ Values used in Method A, calculated using a 3% discount rate.

    In general, the model projects that the standards would cause
manufacturers to produce HD pickups and vans that are lighter, more
aerodynamic, and more technologically complex across all the
alternatives. As Table VI-21 shows, there is a difference between the
relatively small increases in required fuel economy and average
incremental technology cost between the alternatives, suggesting that
the challenge of improving fuel consumption and CO2
emissions accelerates as stringency increases (i.e., that there may be
a ``knee'' in the relationship between technology cost and reductions
in fuel consumption/GHG emissions). Despite the fact that the required
average fuel consumption level changes by about 3 percent between
Alternative 4 and Alternative 5, average technology cost increases by
more than 25 percent. These differences help illustrate the clustered
character of this market segment, where relatively small increases in
fuel economy can lead to much larger cost increases if entire platforms
must be changed in response to the standards.
    The contrast between alternatives 3 and 4 is even more prominent,
with an identical required fuel economy improvement leading to price
increases greater than 20 percent based on the more rapid rate of
increase and shorter time span of Alternative 4, which achieves all of
its increases by MY 2025 while Alternative 3 continues to increase at a
slower rate until MY 2027. Despite these differences, the increase in
average payback period when moving from Alternative 3 to Alternative 4
to Alternative 5 is fairly constant at around an additional three
months for each jump in stringency.
    Manufacturers offer few models, typically only a pickup truck and/
or a cargo van, and while there are a large number of variants of each
model, the degree of component sharing across the variants can make
diversified technology application either economically impractical or
impossible. This forces manufacturers to apply some technologies more
broadly in order to achieve compliance than they might do in other
market segments (passenger cars, for example). This difference between
broad and narrow application--where some technologies must be applied
to entire platforms, while some can be applied to individual model
variants--also explains why

certain technology penetration rates decrease between alternatives of
increasing stringency (cylinder deactivation or mass reductions in
Table VI-21, for example). For those cases, narrowly applying a more
advanced (and costly) technology can be a more cost effective path to
compliance and lead to reductions in the amount of lower-complexity
technology that is applied.
    One driver of the change in technology cost between Alternative 3
and Alternative 4 is the amount of hybridization projected to result
from the implementation of the standards. While only about 5 percent
full hybridization (defined as either integrated starter-generator or
strong hybrid) is expected to be needed to comply with Alternative 3,
the higher rate of increase and compressed schedule moving from
Alternative 3 to Alternative 4 is enough to increase the percentage of
the fleet adopting full hybridization by a factor of two. To the extent
that manufacturers are concerned about introducing hybrid vehicles in
the 2b and 3 market, it is worth noting that new vehicles subject to
Alternative 3 achieve the same fuel economy as new vehicle subject to
Alternative 4 by 2030, with less hybridization required to achieve the
improvement.
    The alternatives also lead to important differences in outcomes at
the manufacturer level, both from the industry average and from each
other. General Motors, Ford, and Chrysler (Fiat), are expected to have
approximately 95 percent of the 2b/3 new vehicle market during the
years that the proposed standards are being phased in. Due to their
importance to this market and the similarities between their model
offerings, these three manufacturers are discussed together and a
summary of the way each is impacted by the standards appears below in
Table VI-22, Table VI-23, and Table VI-24 for General Motors, Ford, and
Chrysler/Fiat, respectively.

  Table VI-22--Summary of Impacts on General Motors by 2030 in the HD Pickup and Van Market Versus the Dynamic
                                            Baseline, Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           18.38           19.96              20           20.53
Achieved........................................           18.43           19.95           20.24           20.51
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.44            5.01               5            4.87
Achieved........................................            5.42            5.01            4.94            4.87
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             507             467             467             455
Achieved........................................             505             468             461             455
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................              64              64              64              64
Cylinder Deac...................................              47              47              47              47
Direct Injection................................              18              18              36              36
Turbocharging...................................              53              53              53              53
8-Speed AT......................................              36             100             100             100
EPS, Accessories................................             100             100             100             100
Stop Start......................................               0               0               2               0
Hybridization...................................               0              19              79             100
Aero. Improvements..............................             100             100             100             100
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................             325             161             158             164
CW (%)..........................................             5.3             2.6             2.6             2.7
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................             785           1,706           2,244           2,736
Total ($m, undiscounted) \b\....................             214             465             611             746
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

  Table VI-23--Summary of Impacts on Ford by 2030 in the HD Pickup and Van Market Versus the Dynamic Baseline,
                                                 Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y

Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           19.42           20.96           20.92           21.51
Achieved........................................            19.5           21.04           21.28            21.8
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.15            4.77            4.78            4.65
Achieved........................................            5.13            4.75            4.70            4.59
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             485             449             450             438
Achieved........................................             482             447             443             433
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................              34              34              34              34
Cylinder Deac...................................              18               0               0               0
Direct Injection................................              16              34              34              34
Turbocharging...................................              51              69              69              69
8-Speed AT......................................             100             100             100             100
EPS, Accessories................................              41              62              59              59
Stop Start......................................               0               0              20              29
Hybridization...................................               0               2              14              30
Aero. Improvements..............................               0              59              59              59
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................             210             202             379             356
CW (%)..........................................             3.2               3             5.7             5.3
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................             506           1,110           1,353           1,801
Total ($m, undiscounted) \b\....................             170             372             454             604
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

   Table VI-24--Summary of Impacts on Fiat/Chrysler by 2030 in the HD Pickup and Van Market Versus the Dynamic
                                            Baseline, Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           18.73           20.08           20.12           20.70
Achieved........................................           18.83           20.06           20.10           20.70
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.34            4.98            4.97            4.83
Achieved........................................            5.31            4.99            4.97            4.83
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             515             480             479             466
Achieved........................................             512             481             480             467
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................              40              40              40              40
Cylinder Deac...................................              23              23              23              23
Direct Injection................................              17              17              17              17
Turbocharging...................................              74              74              74              74

8-Speed AT......................................              65              88              88              88
EPS, Accessories................................               0             100             100             100
Stop-Start......................................               0               0               0               0
Hybridization...................................               0               3               3              10
Aero. Improvements..............................               0             100             100             100
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................             196             649             648             617
CW (%)..........................................             2.8             9.1             9.1             8.7
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................             434           1,469           1,486           1,700
Total ($m, undiscounted) \b\....................              48             163             164             188
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

    The fuel consumption and GHG standards require manufacturers to
achieve an average level of compliance, represented by a sales-weighted
average across the specific targets of all vehicles offered for sale in
a given model year, such that each manufacturer will have a unique
required consumption/emissions level determined by the composition of
its fleet, as illustrated above. However, there are more interesting
differences than the small differences in required fuel economy levels
among manufacturers. In particular, the average incremental technology
cost increases with the stringency of the alternative for each
manufacturer, but the size of the cost increase from one alternative to
the next varies among them, with General Motors showing considerably
larger increases in cost moving from Alternative 3 to Alternative 4,
than from either Alternative 2 to Alternative 3 or Alternative 4 to
Alternative 5. Ford is estimated to have more uniform cost increases
from each alternative to the next, in increasing stringency, though
still benefits from the reduced pace and longer period of increase
associated with Alternative 3 compared to Alternative 4.
    The simulation results show all three manufacturers facing cost
increases when the stringency of the standards move from 2.5 percent
annual increases over the period from MY 2021-2027 to 3.5 percent
annual increases from MY 2021-2025, but General Motors has the largest
at 75 percent more than the industry average price increase for
Alternative 4. GM also faces higher cost increases in Alternative 2
about 50 percent more than either Ford or Fiat/Chrysler. And for the
most stringent alternative considered, the agencies estimate that
General Motors would face average cost increases of more than $2,700,
in addition to the more than $700 increase in the baseline--approaching
nearly $3,500 per vehicle over today's prices.
    Technology choices also differ by manufacturer, and some of those
decisions are directly responsible for the largest cost discrepancies.
For example, GM is estimated to engage in the least amount of mass
reduction among the Big 3 after Phase 1, and much less than Chrysler/
Fiat, but reduces average vehicle mass by over 300 lbs in the
baseline--suggesting that some of GM's easiest Phase 1 compliance
opportunities can be found in lightweighting technologies. Similarly,
Chrysler/Fiat is projected to apply less hybridization than the others,
and much less than General Motors, which is simulated to have full
hybrids (either integrated starter generator or complete hybrid system)
on all of its fleet by 2030, nearly 20 percent of which will be strong
hybrids, in Alternative 4 and the strong hybrid share decreases to
about 18 percent in Alternative 5, as some lower level technologies are
applied more broadly. Because the analysis applies the same technology
inputs and the same logic for selecting among available opportunities
to apply technology, the unique situation of each manufacturer
determined which technology path is projected as the most cost-
effective.
    In order to understand the differences in incremental technology
costs and fuel economy achievement across manufacturers in this market
segment, it is important to understand the differences in their
starting position relative to the proposed standards. One important
factor, made more obvious in the following figures, is the difference
between the fuel economy and performance of the recently redesigned
vans offered by Fiat/Chrysler and Ford (the Promaster and Transit,
respectively), and the more traditionally-styled vans that continue to
be offered by General Motors (the Express/Savannah). In MY 2014, Ford
began the phase-out of the Econoline van platform, moving those volumes
to the Euro-style Transit vans (discussed in more detail in Section VI.
D.2). The Transit platform represents a significant improvement over
the existing Econoline platform from the perspective of fuel economy,
and for the purpose of complying with the standards, the relationship
between the Transit's work factor and fuel economy is a more favorable
one than the Econoline vans it replaces. Since the redesign of van
offerings from both Chrysler/Fiat and Ford occur in (or prior to) the
2014 model year, the costs, fuel consumption improvements, and
reductions of vehicle mass associated with those redesigns are included
in the analysis fleet, meaning they are not carried as part of the
compliance modeling exercise. By contrast, General Motors is simulated
to redesign their van offerings after 2014, such that there is a
greater potential for these vehicles to incur additional costs
attributable to new standards, unlike the costs associated with the
recent redesigns of their competitors. The inclusion of these new Ford
and Chrysler/Fiat products in the analysis fleet is the primary driver
of the cost discrepancy between GM and its competitors in both the
baseline and Alternative 2, when Ford and Chrysler/

Fiat have to apply considerably less technology to achieve compliance.
    The remaining 5 percent of the 2b/3 market is attributed to two
manufacturers, Daimler and Nissan, which, unlike the other
manufacturers in this market segment, only produce vans. The vans
offered by both manufacturers currently utilize two engines and two
transmissions, although both Nissan engines are gasoline engines and
both Daimler engines are diesels. Despite the logical grouping, these
two manufacturers are impacted much differently by the proposed
standards. For the least stringent alternative considered, Daimler adds
no technology and incurs no incremental cost in order to comply with
the standards. At stringency increases greater than or equal to 3.5
percent per year, Daimler only really improves some of their
transmissions and improves the electrical accessories of its Sprinter
vans. By contrast, Nissan's starting position is much weaker and their
compliance costs closer to the industry average in Table VI-21. This
difference could increase if the analysis fleet supporting the final
rule includes forthcoming Nissan HD pickups.

 Table VI-25--Summary of Impacts on Daimler by 2030 in the HD Pickup and Van Market Versus the Dynamic Baseline,
                                                 Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           23.36           25.19           25.25           25.91
Achieved........................................           25.23           25.79           25.79           26.53
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            4.28            3.97            3.96            3.86
Achieved........................................            3.96            3.88            3.88            3.77
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             436             404             404             393
Achieved........................................             404             395             395             384
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................               0               0               0               0
Cylinder Deac...................................               0               0               0               0
Direct Injection................................               0               0               0               0
Turbocharging...................................              44              44              44              44
8-Speed AT......................................               0              44              44             100
EPS, Accessories................................               0               0               0               0
Stop-Start......................................               0               0               0               0
Hybridization...................................               0               0               0               0
Aero. Improvements..............................               0               0               0               0
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................               0               0               0               0
CW (%)..........................................               0               0               0               0
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................               0             165             165             374
Total ($m, undiscounted) \b\....................               0               4               4               9
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

 Table VI-26--Summary of Impacts on Nissan by 2030 in the HD Pickup and Van Market Versus the Dynamic Baseline,
                                                 Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           19.64           21.19           20.92           21.46
Achieved........................................           19.84           21.17           21.19           21.51
----------------------------------------------------------------------------------------------------------------

                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.09           44.72            4.78            4.66
Achieved........................................            5.04            4.72            4.72            4.65
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             452             419             425             414
Achieved........................................             448             419             419             413
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................             100             100             100             100
Cylinder Deac...................................              49              49              49              49
Direct Injection................................              51              51              51             100
Turbocharging...................................              51              51              51              50
8-Speed AT......................................               0              51              51              51
EPS, Accessories................................               0             100             100             100
Stop-Start......................................               0               0               0               0
Hybridization...................................               0               0               0              28
Aero. Improvements..............................               0             100             100             100
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................               0               0             307             303
CW (%)..........................................               0               0               5             4.9
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................             378           1,150           1,347           1,935
Total ($m, undiscounted) \b\....................               5            15.1            17.7            25.4
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

    As Table VI-25 and Table VI-26 show, Nissan applies more technology
than Daimler in the less stringent alternatives and significantly more
technology with increasing stringency. The Euro-style Sprinter vans
that comprise all of Daimler's model offerings in this segment put
Daimler in a favorable position. However, those vans are already
advanced--containing downsized diesel engines and advanced aerodynamic
profiles. Much like the Ford Transit vans, the recent improvements to
the Sprinter vans occurred outside the scope of the compliance modeling
so the costs of the improvements are not captured in the analysis.
    Although Daimler's required fuel economy level is much higher than
Nissan's (in miles per gallon), Nissan starts from a much weaker
position than Daimler and must incorporate additional engine,
transmission, platform-level technologies (e.g. mass reduction and
aerodynamic improvements) in order to achieve compliance. In fact, more
than 25 percent of Nissan's van offerings are projected to contain
integrated starter generators by 2030 in Alternative 5.
    While the agencies do not allow sales volumes for any manufacturer
(or model) to vary across regulatory alternatives in the analysis, it
is conceivable that under the most stringent alternatives individual
manufacturers could lose market share to their competitors if the
prices of their new vehicles rise more than the industry average
without compensating fuel savings and/or changes to other features.
(b) Estimated Owner/Operator Impacts With Respect to HD Pickups and
Vans Using Method A
    The owner/operator impacts of the proposed rules are more
straightforward. Table VI-27 shows the impact on the average owner/
operator who buys a new class 2b or 3 vehicle in model year 2030 using
the worst case assumption that manufacturers pass through the entire
cost of technology to the purchaser. (All dollar values are discounted
at a rate of 7 percent per year from the time of purchase, except the
average price increase, which occurs at the time of purchase). The
additional costs associated with increases in taxes, registration fees,
and financing costs are also captured in the table.

  Table VI-27--Summary of Individual Owner/Operator Impacts in MY 2030 in the HD Pickup and Van Market Segment
                      Using Method A and Versus the Dynamic Baseline, Alternative 1\b\ \a\
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase Increases............          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------

                            Value of Lifetime Fuel Savings (discounted 2012 dollars)
----------------------------------------------------------------------------------------------------------------
Pretax..........................................           2,068           3,924           4,180           4,676
Tax.............................................             210             409             438             491
Total...........................................           2,278           4,334           4,618           5,168
----------------------------------------------------------------------------------------------------------------
                                   Economic Benefits (discounted 2012 dollars)
----------------------------------------------------------------------------------------------------------------
Mobility Benefit................................             244             437             472             525
Avoided Refueling Time..........................              86             164             172             193
----------------------------------------------------------------------------------------------------------------
                                New Vehicle Purchase (vs. No-Action Alternative)
----------------------------------------------------------------------------------------------------------------
Avg. Price Increase ($).........................             578           1,348           1,655           2,080
Avg. Payback (years)............................             2.5               3             3.4             3.9
Additional costs ($)............................             120             280             344             432
----------------------------------------------------------------------------------------------------------------
                               Net Lifetime Owner/Operator Benefits (discounted $)
----------------------------------------------------------------------------------------------------------------
Total Net Benefits..............................           1,910           3,307           3,263           3,374
----------------------------------------------------------------------------------------------------------------
Notes:
* All dollar values are discounted at a rate of 7 percent per year from the time of purchase, except the average
  price increase, which occurs at the time of purchase).
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    As expected, an owner/operator's lifetime fuel savings increase
monotonically across the alternatives. The mobility benefit in Table
VI-27 refers to the value of additional miles that an individual owner/
operator travels as a result of reduced per-mile travel costs. The
additional miles result in additional fuel consumption and represent
foregone fuel savings, but are valued by owner/operators at the cost of
the additional fuel plus the owner/operator surplus (a measure of the
increase in welfare that owner/operators achieve by having more
mobility). The refueling benefit measures the value of time saved
through reduced refueling events, the result of improved fuel economy
and range in vehicles that have been modified in response to the
standards.
    There are some limitations to using payback period as a measure, as
it accounts for fuel expenditures and incremental costs associated with
taxes, registration fees and financing, and increased maintenance
costs, but not the cost of potential repairs or replacements, which may
or may not be more expensive with more advanced technology.
    Overall, the average owner/operator is likely to see discounted
lifetime benefits that are multiples of the price increases faced when
purchasing the new vehicle in MY 2030 (or the few model years preceding
2030). In particular, the net present value of future benefits at the
time of purchase are estimated to be 3.5, 3.0, 2.2, and 1.8 times the
price increase of the average new MY2030 vehicle for Alternatives 2-5,
respectively. As Table VI-27 illustrates, the preferred alternative has
the highest ratio of discounted future owner/operator benefits to
owner/operator costs.
(c) Estimated Social and Environmental Impacts for HD Pickups and Vans
    Social benefits increase with the increasing stringency of the
alternatives. As in the owner/operator analysis, the net benefits
continue to increase with increasing stringency--suggesting that
benefits are still increasing faster than costs for even the most
stringent alternative.

 Table VI-28--Summary of Total Social Costs and Benefits Through MY 2029 in the HD Pickup and Van Market Segment
                      Using Method A and Versus the Dynamic Baseline, Alternative 1\b\ \a\
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................            2.0%            2.5%            3.5%            4.0%
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                            Fuel Purchases ($billion)
----------------------------------------------------------------------------------------------------------------
Pretax Savings..................................             9.6            15.9            19.1            22.2
----------------------------------------------------------------------------------------------------------------
                                          Fuel Externalities ($billion)
----------------------------------------------------------------------------------------------------------------
Energy Security.................................             0.5             0.9             1.1             1.3
CO2 emissions \b\...............................             1.9             3.2             3.8             4.4
----------------------------------------------------------------------------------------------------------------
                                      VMT-Related Externalities ($billion)
----------------------------------------------------------------------------------------------------------------
Driving Surplus.................................             1.1             1.8             2.1             2.4
Refueling Surplus...............................             0.4             0.7             0.8             0.9

Congestion......................................            -0.2            -0.4            -0.4            -0.5
Accidents.......................................            -0.1            -0.2            -0.2            -0.3
Noise...........................................               0               0               0               0
Fatalities......................................             0.1            -0.2            -0.2            -0.5
Criteria Emissions..............................             0.6             1.1             1.3             1.6
----------------------------------------------------------------------------------------------------------------
                                    Technology Costs vs. No-Action ($billion)
----------------------------------------------------------------------------------------------------------------
Incremental Cost................................             2.5             5.0             7.2             9.7
Additional Costs................................             0.5             1.0             1.5             2.0
----------------------------------------------------------------------------------------------------------------
                                         Benefit Cost Summary ($billion)
----------------------------------------------------------------------------------------------------------------
Total Social Cost...............................             3.3             6.8             9.5            13.0
Total Social Benefit............................            13.9            22.7            27.4            31.7
Net Social Benefit..............................            10.6            15.9            17.9            18.7
----------------------------------------------------------------------------------------------------------------
Notes:
* All dollar values are discounted at a rate of 3 percent per year from the time of purchase.
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Using the 3% average social cost of CO2 value. There are four distinct social cost of CO2 values presented
  in the Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis under Executive Order
  12866 (2010 and 2013). The CO2 emissions presented here would be valued lower with one of those other three
  values and higher at the other two values.

    Table VI-28 provides a summary of benefits and costs, cumulative
from MY2015-MY2029 (although the early years of the series typically
have no incremental costs and benefits over the baseline), for each
alternative. In the social perspective, fuel savings are considered net
of fuel taxes, which are a transfer from purchasers of fuel to society
at large. The energy security component represents the risk premium
associated with exposure to oil price spikes and the economic
consequences of adapting to them. This externality is monetized on a
per-gallon basis, just as the social cost of carbon is used in this
analysis. Just as the previous two externalities are caused by fuel
consumption, others are caused by travel itself. The additional VMT
resulting from the increase in travel demand that occurs when the price
of driving decreases (i.e. the rebound effect), not only leads to
increased mobility (which is a benefit to drivers), but also to
increases in congestion, noise, accidents, and per-mile emissions of
criteria pollutants like carbon monoxide and diesel particulates.
Although increases in VMT lead to increases in tailpipe emissions of
criteria pollutants, the proposed regulations decrease overall
consumption enough that the emissions reductions associated with the
remainder of the fuel cycle (extraction, refining, transportation and
distribution) are large enough to create a net reduction in the
emissions of criteria pollutants (shown below in Table VI-29 and VI-
30).\367\ A full presentation of the costs and benefits, and the
considerations that have gone into each cost and benefit category--such
as how energy security premiums were developed, how the social costs of
carbon and co-pollutant benefits were developed, etc.--is presented in
Section IX of this preamble and in Chapters 7 and 8 of the draft RIA
for each regulated segment (engines, HD pickups and vans, vocational
vehicles, tractors and trailers).
---------------------------------------------------------------------------

    \367\ For a more detailed discussion of the results from the
CAFE Model on the proposed heavy duty pickups and vans regulation's
impact on emissions of CO2 and criteria pollutants, see
NHTSA's accompanying Draft Environmental Impact Statement.
---------------------------------------------------------------------------

    Another side effect of increased VMT is the likely increase in
crashes, which is a function of the total vehicle travel in each year.
Although additional crashes could involve additional fatalities, we
estimate that this potential could be partially offset by the
application of mass reduction to HD pickup trucks and vans, which could
make fatalities less likely in some crashes involving these vehicles.
As Table VI-28 illustrates, the social cost associated with traffic
fatalities is the result of an additional -10 (Alternative 2 leads to a
reduction in fatalities over the baseline, due to the application of
mass reduction technologies), 35, 36, and 66 fatalities for
Alternatives 2-5, respectively. The baseline contains nearly 25,000
fatalities involving 2b/3 vehicles over the same period. The
incremental fatalities associated with Alternative 2-5 are -0.4, 0.1,
0.1, and 0.3 percent relative to the MYs 2015-2029 baseline,
respectively.
    The CAFE model was used to estimate the emissions impacts of the
various alternatives that are the result of lower fuel consumption, but
increased vehicle miles traveled for vehicle produced in model years
subject to the standards in the alternatives. Criteria pollutants are
largely the result of vehicle use, and accrue on a per-mile-of-travel
basis, but the alternatives still generally lead to emissions
reductions. Although vehicle use increases under each of the
alternatives, upstream emissions associated with fuel refining,
transportation and distribution are reduced for each gallon of fuel
saved and that savings is larger than the incremental increase in
emissions associated with increased travel. The net of the two factors
is a savings of criteria (and other) pollutant emissions.

   Table VI-29--Summary of Environmental Impacts Through MY2029 in the HD Pickup and Van Market Segment, Using
                           Method A and Versus the Dynamic Baseline, Alternative 1b a
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................            2.0%            2.5%            3.5%            4.0%
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                               Greenhouse Gas Emissions vs. No-Action Alternative
----------------------------------------------------------------------------------------------------------------
CO2 (MMT).......................................              54              91             110             127
CH4 and N2O (tons)..............................          65,600         111,400         133,700         155,300
----------------------------------------------------------------------------------------------------------------
                                Other Emissions vs. No-Action Alternative (tons)
----------------------------------------------------------------------------------------------------------------
CO..............................................          10,400          20,700          25,800          30,400
VOC and NOX.....................................          23,800          43,600          53,500          62,200
PM..............................................           1,470           2,550           3,090           3,590
SO2.............................................          11,400          19,900          24,100          28,000
Air Toxics......................................              44              47              49              55
Diesel PM10.....................................           2,470           4,350           5,300           6,160
----------------------------------------------------------------------------------------------------------------
                             Other Emissions vs. No-Action Alternative (% reduction)
----------------------------------------------------------------------------------------------------------------
CO..............................................             0.1             0.3             0.4             0.4
VOC and NOX.....................................             1.1             2.1             2.6             3.0
PM..............................................             1.7             3.0             3.6             4.2
SO2.............................................             2.9             5.1             6.2             7.2
Air Toxics......................................             0.1             0.1             0.1             0.2
Diesel PM10.....................................             2.7             4.8             5.9             6.8
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    In addition to comparing environmental impacts of the alternatives
against a dynamic baseline that shows some improvement over time,
compared to today's fleet, even in the absence of the alternatives, the
environmental impacts from the Method A analysis were compared against
a flat baseline. This other comparison is summarized below, but both
comparisons are discussed in greater detail in the Draft EIS.

   Table VI-30--Summary of Environmental Impacts Through MY2029 in the HD Pickup and Van Market Segment, Using
                             Method A and Versus the Flat Baseline, Alternative 1\a\
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................            2.0%            2.5%            3.5%            4.0%
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                               Greenhouse Gas Emissions vs. No-Action Alternative
----------------------------------------------------------------------------------------------------------------
CO2 (MMT).......................................              66             105             127             142
CH4 and N2O (tons)..............................          79,700         127,400         154,800         172,800
----------------------------------------------------------------------------------------------------------------
                                Other Emissions vs. No-Action Alternative (tons)
----------------------------------------------------------------------------------------------------------------
CO..............................................          11,630          22,160          28,030          32,370
VOC and NOX.....................................          28,280          48,770          60,180          68,050
PM..............................................           1,780           2,900           3,550           3,980
SO2.............................................          13,780          22,580          27,660          31,020
Air Toxics......................................              60              65              72              73
Diesel PM10.....................................           2,980           4,930           6,060           6,810
----------------------------------------------------------------------------------------------------------------
                             Other Emissions vs. No-Action Alternative (% reduction)
----------------------------------------------------------------------------------------------------------------
CO..............................................             0.2             0.3             0.4             0.4
VOC and NOX.....................................             1.4             2.3             2.9             3.3
PM..............................................             2.1             3.4             4.2             4.7
SO2.............................................             3.5             5.7             7.0             7.9
Air Toxics......................................             0.2             0.2             0.2             0.2
Diesel PM10.....................................             3.3             5.4             6.7             7.5
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(6) Sensitivity Analysis Evaluating Different Inputs to the DOT CAFE
Model
    This section describes some of the principal sensitivity results,
obtained by running the various scenarios describing the policy
alternatives with alternative inputs. OMB Circular A-4 indicates that
``it is usually necessary to provide a sensitivity analysis to reveal
whether, and to what extent, the results of the analysis are sensitive
to plausible changes in the main assumptions and numeric inputs.''
\368\ Considering this guidance, a number of sensitivity analyses were
performed using analysis Method A to examine important assumptions and
inputs, including the following, all of which are discussed in greater
detail in the accompanying RIA:
---------------------------------------------------------------------------

    \368\ Available at http://www.whitehouse.gov/omb/circulars_a004_a-4/.
---------------------------------------------------------------------------

    1. Payback Period: In addition to the 0 and 6 month payback periods
discussed above, also evaluated cases involving payback periods of 12,
18, and 24 months.
    2. Fuel Prices: Evaluated cases involving fuel prices from the AEO
2014 low and high oil price scenarios. (See AEO-Low and AEO-High in the
tables.)
    3. Fuel Prices and Payback Period: Evaluated one side case
involving a 0 month payback period combined with fuel prices from the
AEO 2014 low oil price scenario, and one side case with a 24 month
payback period combined with fuel prices from the AEO 2014 high oil
price scenario.
    4. Benefits to Vehicle Buyers: The main Method A analysis assumes
there is no loss in value to owner/operators resulting from vehicles
that have an increase in price and higher fuel economy. NHTSA performed
this sensitivity analysis assuming that there is a 25, or 50 percent
loss in value to owner/operators--equivalent to the assumption that
owner/operators will only value the calculated benefits they will
achieve at 75, or 50 percent, respectively, of the main analysis
estimates. (These are labeled as 75pctOwner/operatorBenefit and
50pctOwner/operatorBenefit.)
    5. Value of Avoided GHG Emissions: Evaluated side cases involving
lower and higher valuation of avoided CO2 emissions,
expressed as the social cost of carbon (SCC).
    6. Rebound Effect: Evaluated side cases involving rebound effect
values of 5 percent, 15 percent, and 20 percent. (These are labeled as
05PctReboundEffect, 15PctReboundEffect and 20PctReboundEffect).
    7. RPE-based Markup: Evaluated a side case using a retail price
equivalent (RPE) markup factor of 1.5 for non-electrification
technologies, which is consistent with the NAS estimation for
technologies manufactured by suppliers, and a RPE markup factor of 1.33
for electrification technologies (mild and strong HEV).
    8. ICM-based Post-Warranty Repair Costs: NHTSA evaluated a side
case that scaled the frequency of repair by vehicle survival rates,
assumes that per-vehicle repair costs during the post-warranty period
are the same as in the in-warranty period, and that repair costs are
proportional to incremental direct costs (therefore vehicles with
additional components will have increased repair costs).
    9. Mass-Safety Effect: Evaluated side cases with the mass-safety
impact coefficient at the values defining the 5th and 95th percent
points of the confidence interval estimated in the underlying
statistical analysis. (These are labeled MassFatalityCoeff05pct and
MassFatalityCoeff95pct.)
    10. Strong HEVs: Evaluated a side case in which strong HEVs were
excluded from the set of technology estimated to be available for HD
pickups and vans through model year 2030. As in Section VI.C. (8), this
``no SHEV'' case allowed turbocharging and downsizing on all GM vans to
provide a lower-cost path for compliance.
    11. Diesel Downsizing: Evaluated a side case in which downsizing of
diesel engines was estimated to be more widely available to HD pickups
and vans.
    12. Technology Effectiveness: Evaluated side cases involving inputs
reflecting lower and higher impacts of technologies on fuel
consumption.
    13. Technology Direct Costs: Evaluated side cases involving inputs
reflecting lower and higher direct incremental costs for fuel-saving
technologies.
    14. Fleet Mix: Evaluated a side case in which the shares of
individual vehicle models and configurations were kept constant at
estimated current levels.
    Table VI-31 below, summarizes key metrics for each of the cases
included in the sensitivity analysis using Method A for the proposed
alternative. The table reflects the percent change in the metrics
(columns) relative to the main analysis, due to the particular
sensitivity case (rows) for the proposed alternative 3. For each
sensitivity run, the change in the metric can we described as the
difference between the baseline and the preferred alternative for the
sensitivity case, minus the difference between the preferred
alternative and the baseline in the main analysis, divided by the
difference between the preferred alternative and the baseline in the
main analysis. Or,
[GRAPHIC] [TIFF OMITTED] TP13JY15.012

    Each metric represents the sum of the impacts of the preferred
alternative over the model years 2018-2029, and the percent changes in
the table represent percent changes to those sums. More detailed
results for all alternatives are available in the accompanying RIA
Chapter 10.

    Table VI-31--Sensitivity Analysis Results From CAFE Model in the HD Pickup and Van Market Segment Using Method A and Versus the Dynamic Baseline,
                                 Alternative 1b (2.5% Growth in Stringency: Cells Are Percent Change From Base Case) \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Fuel savings     CO2 savings    Fuel savings    Social costs       Social        Social net
                    Sensitivity case                       (gallons) (%)     (MMT) (%)        ($) (%)           (%)        benefits (%)    benefits (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0 Month Payback.........................................            14.0            14.5            15.1             5.6            15.1            18.2

12 Month Payback........................................            -4.8            -4.7            -4.5            -2.5            -4.7            -5.4
18 Month Payback........................................           -29.2           -28.1           -26.5           -14.1           -26.8           -31.1
24 Month Payback........................................           -42.9           -42.4           -41.9           -23.2           -42.1           -48.4
AEO-Low.................................................             3.3             3.5           -27.9           -10.8           -22.2           -26.1
AEO-High................................................            -7.0            -7.2            23.3             1.4            19.5            25.6
AEO-Low, 0 Month Payback................................            18.6            19.3           -16.5            -3.4           -10.1           -12.3
AEO-High, 24 Month Payback..............................           -63.8           -64.6           -54.4           -49.9           -55.7           -57.7
50pct Owner/operator Benefit............................             0.0             0.0           -50.0             0.0           -34.6           -46.2
75pct Owner/operator Benefit............................             0.0             0.0           -25.0             0.0           -17.3           -23.1
Low SCC.................................................             0.0             0.0             0.0             0.0           -10.6           -14.1
Low SCC, 0 Month Payback................................            14.0            14.5            15.1             5.6             2.9             2.0
High SCC................................................             0.0             0.0             0.0             0.0             7.8            10.4
High SCC, 0 Month Payback...............................            14.0            14.5            15.1             5.6            24.0            30.1
Very High SCC...........................................             0.0             0.0             0.0             0.0            28.7            38.4
Very High SCC, 0 Month Payback..........................            14.0            14.5            15.1             5.6            48.0            62.2
05 Pct Rebound Effect...................................             4.6             4.6             4.6           -12.9             0.4             4.8
15 Pct Rebound Effect...................................            -4.6            -4.6            -4.6            12.9            -0.4            -4.8
20 Pct Rebound Effect...................................            -9.1            -9.2            -9.2            25.7            -0.8            -9.7
RPE-Based Markup........................................            -3.2            -1.5             0.3            31.4            -0.1           -10.6
Mass Fatality Coeff 05pct...............................             0.0             0.0             0.0           -23.6             0.0             7.9