[Federal Register: December 27, 2006 (Volume 71, Number 248)]
[Rules and Regulations]
[Page 77871-77969]
[DOCID:fr27de06-19]

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Part II

Environmental Protection Agency

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40 CFR Parts 86 and 600

Fuel Economy Labeling of Motor Vehicles: Revisions To Improve
Calculation of Fuel Economy Estimates; Final Rule

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 86 and 600

[EPA-HQ-OAR-2005-0169; FRL-8257-5]
RIN 2060-AN14

Fuel Economy Labeling of Motor Vehicles: Revisions To Improve
Calculation of Fuel Economy Estimates

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is finalizing
changes to the methods used to calculate the fuel economy estimates
that are posted on window stickers of all new cars and light trucks
sold in the United States. This final rule will greatly improve the EPA
fuel economy estimates to more accurately inform consumers about the
fuel economy they can expect to achieve in the real world. The new test
methods take into account several important factors that affect fuel
economy in the real world, but are missing from the existing fuel
economy tests. Key among these factors are high speeds, aggressive
accelerations and decelerations, the use of air conditioning, and
operation in cold temperatures. Under the new methods, the city miles
per gallon (mpg) estimates for the manufacturers of most vehicles will
drop by about 12 percent on average relative to today's estimates, and
city mpg estimates for some vehicles will drop by as much as 30
percent. The highway mpg estimates for most vehicles will drop on
average by about 8 percent, with some estimates dropping by as much as
25 percent relative to today's estimates. These changes will take
effect starting with 2008 model year vehicles, available at dealers in
2007. We also are adopting a new fuel economy label design with a new
look and updated information that should be more useful to prospective
car buyers. The new label features more prominent fuel cost
information, an easy-to-use graphic for comparing the fuel economy of
different vehicles, clearer text, and a Web site address for more
information. Manufacturers will be phasing in the new design during the
2008 model year. Finally, for the first time we are requiring fuel
economy labeling of certain passenger vehicles between 8,500 and 10,000
lbs gross vehicle weight rating. Because of the Department of
Transportation's recent regulation that brings medium-duty passenger
vehicles into the Corporate Average Fuel Economy program starting in
2011, EPA is now statutorily obligated to include these vehicles in the
fuel economy labeling program. Medium-duty passenger vehicles are a
subset of vehicles between 8,500 and 10,000 lbs gross vehicle weight
that includes large sport utility vehicles and vans, but not pickup
trucks. Vehicle manufacturers are required to post fuel economy labels
on medium-duty passenger vehicles beginning with the 2011 model year.

DATES: This final rule is effective on January 26, 2007. The
incorporation by reference of certain publications listed in the rule
is approved by the Director of the Federal Register as of January 26,
2007.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OAR-2005-0169. All documents in the docket are listed on the
http://www.regulations.gov Web site. Although listed in the index, some

information is not publicly available, e.g., Confidential Business
Information or other information whose disclosure is restricted by
statute. Certain other material, such as copyrighted material, is not
placed on the Internet and will be publicly available only in hard copy
form. Publicly available docket materials are available either
electronically through http://www.regulations.gov or in hard copy at the Air

and Radiation Docket, EPA/DC, EPA West, Room B102, 1301 Constitution
Ave., NW., Washington, DC. The Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is<PHONE_NUMBER>, and the
telephone number for the Air and Radiation Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Rob French, U.S. EPA, Voice-mail (734)
214-4636; E-mail<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Does This Action Apply to Me?

    This action affects companies that manufacture or sell new light-
duty vehicles, light-duty trucks, and medium-duty passenger
vehicles.\1\ Regulated categories and entities include:
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    \1\ ``Light-duty vehicle,'' ``light-duty truck,'' and ``medium-
duty passenger vehicle'' are defined in 40 CFR 86.1803-01.
Generally, the term ``light-duty vehicle'' means a passenger car,
the term ``light-duty truck'' means a pick-up truck, sport-utility
vehicle, or minivan of up to 8,500 lbs gross vehicle weight rating,
and ``medium-duty passenger vehicle'' means a sport-utility vehicle
or passenger van from 8,500 to 10,000 lbs gross vehicle weight
rating. Medium-duty passenger vehicles do not include pick-up
trucks.

------------------------------------------------------------------------
                                                 Examples of potentially
         Category             NAICS Codes a        regulated entities
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Industry.................  336111, 336112.....  Motor vehicle
                                                 manufacturers.
Industry.................  81112, 811198,       Commercial importers of
                            54154.               vehicles and vehicle
                                                 components.
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\a\ North American Industry Classification System (NAICS)

    This list is not intended to be exhaustive, but rather provides a
guide regarding entities likely to be regulated by this action. To
determine whether particular activities may be regulated by this
action, you should carefully examine the regulations. You may direct
questions regarding the applicability of this action to the person
listed in FOR FURTHER INFORMATION CONTACT.

Table of Contents

I. Introduction
    A. Background
    B. What Requirements Are We Adopting?
    1. Revised Methods for Calculating City and Highway Fuel Economy
Estimates
    2. New Labeling Requirement for Medium-Duty Passenger Vehicles
    3. Improved Fuel Economy Label Design
    4. New Vehicle Class Categories and Definitions
    5. Test Procedure Modifications
    C. Why is EPA Taking This Action?
    1. Energy Policy Act of 2005
    2. Comparing EPA Estimates to Actual Driving Experience
    3. Representing Real-World Conditions on the Fuel Economy Tests
    D. When Will the New Requirements Take Effect?
    1. New City and Highway Fuel Economy Estimates
    2. Implementation of New Label Design
    3. Fuel Economy Labeling of Medium-Duty Passenger Vehicles
    E. Periodic Evaluation of Fuel Economy Labeling Methods
    F. This Final Rule Does Not Impact CAFE Standards or Test
Procedures
    G. Public Participation
II. New Test Methods and Calculation Procedures for Fuel Economy
Labels
    A. Derivation of the Vehicle-Specific 5-Cycle Methodology

    1. Overview of Public Comments on the 5-Cycle Methodology
    2. Changes to the 5-Cycle Methodology From Proposal
    B. Derivation of the MPG-Based Methodology
    C. Effect of the New Methods on Fuel Economy Label Values
    D. Comparison to Other Onroad Fuel Economy Estimates
    E. Implementation of the New Fuel Economy Methods
    1. 5-Cycle Vehicle Selection Criteria for 2011 and Later Model
Years
    2. Medium-Duty Passenger Vehicle Label Estimates
    3. Analytically Derived Fuel Economy
III. Revisions to the Fuel Economy Label Format and Content
    A. Background
    B. Label Size and Orientation
    C. Fuel Economy of Comparable Vehicles
    D. Estimated Annual Fuel Cost
    E. ``Your Mileage Will Vary'' Statement
    F. Environmental Information Statement
    G. Government Logos and Web site Link
    H. Temporary Transitional Statement
    I. Combined Fuel Economy Basis
    J. Labeling Requirements for Dual Fueled Vehicles
    K. Addition of Final Regulatory Specifications for Label Content
and Design
IV. Testing Provisions
    A. Testing Requirements for Vehicles Currently Exempt From
Certain Emission Tests
    1. Diesel Vehicles
    2. Alternative-Fueled Vehicles
    B. Modifications to Existing Test Procedures
    1. Splitting the US06 Test Into City and Highway Segments
    2. Heater/Defroster Usage During the Cold FTP
    3. Hybrid Electric Vehicle Testing Provisions
V. Projected Cost Impacts
    A. Incorporation of New Test Cycles Into Fuel Economy Label
Calculations
    1. Testing Burden for 2008 Through 2010 Model Years (MY)
    2. Testing Burden for 2011 and Later Model Years
    3. Cost Analysis of the Testing Burden
    B. Revised Label Format and New Information Included
    C. Reporting of Fuel Economy Data for SC03, US06, and Cold FTP
Tests
    D. Impact on Confirmatory Testing
    E. Fees
    F. Summary of Final Cost Estimate
VI. Implementation and Other Provisions
    A. Revisions to Classes of Comparable Vehicles
    B. Fuel Economy Ranges for Comparable Fuel Economy Graphic
    C. Temporary Option To Add ``Old Method'' City and Highway
Estimates on Early Introduction Model Year Vehicle Labels
    D. Consideration of Fuel Consumption vs. Fuel Economy as a
Metric
    E. Web-Based Driver-Specific Fuel Economy Calculator
    F. Fuel Basis for Estimated Annual Fuel Costs
    G. Electronic Distribution of Dealer-Supplied Fuel Economy
Booklet
VII. Relevant Statutes and Regulations
    A. Energy Policy and Conservation Act
    B. Energy Policy Act of 2005
    C. Other Statutes and Regulations
    1. Automobile Disclosure Act
    2. Internal Revenue Code
    3. Clean Air Act
    4. Additional Provisions in the Energy Policy Act of 2005 and
Transportation Equity Act of 2005
    5. Federal Trade Commission Guide Concerning Fuel Economy
Advertising for New Vehicles
VIII. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children from
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution or Use
    I. National Technology Transfer Advancement Act
    J. Congressional Review Act
IX. Statutory Provisions and Legal Authority

I. Introduction

    This final rule has three key elements. First, we are finalizing
changes to the Environmental Protection Agency's (EPA) fuel economy
testing and calculation procedures so that the miles per gallon (mpg)
estimates for passenger cars and light-duty trucks will better reflect
what consumers achieve in the real-world. Second, we are updating the
fuel economy window sticker that appears on all new cars and light
trucks sold in the U.S., which will make the window sticker more useful
and understandable to consumers. Third, for the first time we are
requiring fuel economy labeling of certain passenger vehicles between
8,500 and 10,000 lbs gross vehicle weight rating (GVWR), such as the
largest sport-utility vehicles (SUVs) and passenger vans.
    This final rule follows a Notice of Proposed Rulemaking (NPRM)
published on February 1, 2006.\2\ In the NPRM, we proposed changes to
the testing and calculation procedures used to calculate the fuel
economy estimates that appear on window stickers that are posted on all
new cars and light trucks sold in the United States. The NPRM also
proposed changes to the fuel economy label design and content. We
received comments on the NPRM from a wide variety of stakeholders,
including the automobile manufacturing industry, environmental groups,
consumer organizations, state governments, and the general public.
These comments are available for public viewing in Docket EPA-HQ-OAR-
2005-0169. Docket content can be viewed and/or downloaded at http://www.regulations.gov.
\3\ Our responses to these comments are detailed in

the Response to Comments document, which is available in the public
docket and on our Web site.\4\ In this section of the final rule we
describe some background information and provide a brief description of
the content, timing, and rationale for the final program. For
additional background and details regarding the proposal, readers
should consult the NPRM and related documents.
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    \2\ See 71 FR 5426 (Feb. 1, 2006), Available in the public
docket and on our Web site at http://www.epa.gov/fueleconomy/regulations.htm
.

    \3\ Enter the docket i.d. number (EPA-HQ-OAR-2005-0169) in the
Keyword field and choose ``All Documents (Open and Closed for
Comment).''
    \4\ See http://www.epa.gov/fueleconomy/[fxsp0]regulations.htm or

http://www.regulations.gov.

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A. Background

    With this final rule, EPA is helping car buyers make more informed
decisions when considering a vehicle's fuel economy. Fuel economy, or
gas mileage, continues to be a major area of public interest for
several reasons. Passenger vehicles account for approximately 40
percent of all U.S. oil consumption. Finally, the more miles a car gets
per gallon of gasoline, the more money the owner saves on fuel costs.
With consumers' renewed interest in fuel savings due to higher gasoline
prices, providing mileage estimates that more closely reflect real-
world driving has once again become important for consumers who
comparison-shop.
    The EPA fuel economy estimates have appeared on the window stickers
of all new cars and light trucks since the late 1970's and are well-
recognized by consumers. The window sticker displays two fuel economy
estimates: One for city driving and one for highway driving. These
estimates, in units of miles per gallon, essentially serve two
purposes: (1) To provide consumers with a basis on which to compare the
fuel economy of different vehicles, and (2) to provide consumers with a
reasonable estimate of the fuel economy they can expect to achieve.
While the EPA fuel economy estimates have generally been a useful tool
for comparing the relative fuel economy of different vehicles, they
have been less useful for predicting the fuel economy that consumers
can reasonably expect to achieve in the real world. Consumers need to
be provided with accurate,

easily understandable, and relevant information regarding the fuel
economy of new vehicles. This final rule improves the information
provided to consumers regarding the fuel economy of new vehicles.
    The city fuel economy estimate is currently based on the Federal
Test Procedure (FTP), which was designed to measure a vehicle's
tailpipe emissions under urban driving conditions. The driving cycle
used for the FTP was developed in the mid-1960's to represent home-to-
work commuting in Los Angeles. The FTP is also one of the tests used to
determine emissions compliance today. The FTP includes a series of
accelerations, decelerations, and idling (such as at stop lights). It
also includes starting the vehicle after it has been parked for an
extended period of time (called a ``cold start''), as well as a start
on a warmed-up engine (called a ``hot start''). The total distance
covered by the FTP is about 11 miles and the average speed is about 21
mph, with a maximum speed of about 56 mph.
    The highway fuel economy estimate is currently based on the Highway
Fuel Economy Test (HFET), which was developed by EPA in 1974 and was
designed to represent a mix of interstate highway and rural driving. It
consists of relatively constant higher-speed driving, with no engine
starts or idling time. The HFET covers a distance of about 10 miles, at
an average speed of 49 mph and a top speed of about 60 mph.
    A fundamental issue with today's fuel economy estimates is that the
underlying test and calculation procedures do not fully represent
current real-world driving conditions. Some of the key limitations are
that the highway test has a top speed of only 60 miles per hour, both
the city and highway tests are run at mild climatic conditions (75
[deg]F), both tests have mild acceleration rates, and neither test is
run with the use of fuel-consuming accessories, such as air
conditioning. Over the past few years, there have been several
independent studies comparing EPA's fuel economy estimates to the real-
world experience of consumers. These studies confirm that there is
considerable variation in real-world fuel economy, and provide
substantial evidence that EPA's mileage ratings often overestimate
real-world fuel economy. Although these studies differ in a number of
variables, including their test methods, driving conditions, and fuel
economy measurement techniques, they indicate that EPA's approach to
estimating fuel economy needs to be improved to better represent some
key real-world fuel economy impacts.
    The methods used today for calculating the city and highway mpg
estimates have been in place since the 1970's, and the results of these
methods were adjusted only once in the mid-1980's to bring them closer
to consumer's expectations.\5\ Since that time, there have been many
changes affecting the way Americans drive--speed limits are higher,
road congestion has increased, vehicle performance has increased,
vehicle technologies have changed markedly, and more vehicles are
equipped with energy-consuming accessories like air conditioning. Our
analysis shows that these changes, along with several other factors,
again indicate a need to revise the testing and calculation procedures
underlying the fuel economy window sticker estimates.\6\
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    \5\ In 1984, EPA published new fuel economy labeling procedures
that were applicable to 1985 and alter model year vehicles. Based on
in-use fuel economy data collected at the time, it was evident that
the fuel economy estimates needed to be adjusted downward in order
to more accurately reflect consumers' average fuel economy
experience. The city values (based on the raw FTP test data) were
adjusted downward by 10 percent and the highway values (likewise
based on the raw highway test data) were adjusted downward by 22
percent. See 49 FR 13832 (April 6, 1984).
    \6\ See the Technical Support Document and ``Vehicle Fuel
Economy Labeling and the Effect of Cold Temperature, Air-
Conditioning Usage and Aggressive Driving on Fuel Economy,'' by
Eldert Bontekoe and Richard A. Rykowski, 2005. These are available
in the public docket for review.
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    We believe the new fuel economy estimates will provide car buyers
with useful information when comparing the fuel economy of different
vehicles. It is important to emphasize that fuel economy varies from
driver to driver for a wide variety of reasons, such as different
driving styles, climates, traffic patterns, use of accessories, loads,
weather, and vehicle maintenance. Even different drivers of the same
vehicle will experience different fuel economy as these and other
factors vary. Therefore, it is impossible to design a ``perfect'' fuel
economy test that will provide accurate real-world fuel economy
estimates for every consumer. With any estimate, there will always be
consumers that get better or worse actual fuel economy. The EPA
estimates are meant to be a general guideline for consumers,
particularly to compare the relative fuel economy of one vehicle to
another. Nevertheless, we do believe that the new fuel economy test
methods will do a better job of giving consumers a more accurate
estimate of the fuel economy they can achieve in the real-world. Under
the new methods, the city mpg estimates for the manufacturers of most
vehicles will drop by about 12 percent on average relative to today's
estimates. City estimates for some of the most fuel-efficient vehicles,
including gasoline-electric hybrid vehicles, will decrease by 20 to 30
percent. The highway mpg estimates for most vehicles will drop on
average by about 8 percent, with some estimates dropping by as much as
25 percent relative to today's estimates.
    While the inputs to our estimates are based on data from actual
real-world driving behavior and conditions, it is essential that our
fuel economy estimates continue to be derived primarily from
controlled, repeatable, laboratory tests. Because the test is
controlled and repeatable, an EPA fuel economy estimate can be used for
comparison of different vehicle models and types. In other words, when
consumers are shopping for a car, they can be sure that the fuel
economy estimates were measured using a ``common yardstick''--that is
the same test run under the exact same set of conditions, making the
fuel economy estimates a fair comparison from vehicle-to-vehicle. While
some organizations have issued their own fuel economy estimates based
on real-world driving, such an approach introduces a wide number of
often uncontrollable variables--different drivers, driving patterns,
weather conditions, temperatures, etc.--that make repeatable tests
impossible. Our new fuel economy test methods are more representative
of real-world conditions than the current fuel economy tests--yet we
retain our practice of relying on controlled, repeatable, laboratory
tests. EPA and manufacturers test over 1,250 vehicle models annually
and every test is run under an identical range of conditions and under
a precise driver's trace, which assures that the result will be the
same for an individual vehicle model no matter when and where the
laboratory test is performed. Variations in temperature, road grade,
driving patterns, and other variables do not impact the result of the
test. While such external conditions impact fuel economy on a trip-to-
trip basis, they do not change the laboratory test result. Therefore, a
repeatable test provides a level playing field for all vehicles, which
is essential for comparing the fuel economy of one vehicle to another.
Finally, EPA must preserve the ability to confirm the values achieved
by the manufacturers' testing, and this can only be achieved with a
highly repeatable test or set of tests.
    In the Energy Policy Act of 2005, Congress required EPA to revise
the fuel economy labeling methods to better reflect a variety of real-
world factors that affect fuel economy. Section 774 of

the 2005 Energy Policy Act directs EPA to ``* * * update or revise the
adjustment factors in [certain sections of the fuel economy labeling
regulations] to take into consideration higher speed limits, faster
acceleration rates, variations in temperature, use of air conditioning,
shorter city test cycle lengths, current reference fuels, and the use
of other fuel depleting features.'' This final rule fully addresses
this statutory requirement. Section VII contains a detailed analysis of
the statute and regulations.

B. What Requirements Are We Adopting?

    This final rule establishes new methods for determining the city
and highway fuel economy estimates for the sole purpose of fuel economy
labeling by incorporating fuel economy results over a broader range of
driving conditions. The new methodology will result in EPA fuel economy
estimates that better approximate the miles per gallon that consumers
achieve in real-world driving. These changes include some revisions to
existing test procedures. In addition, we are revising the format and
content of the fuel economy label to make the information more useful
and easily understandable to consumers. The new rule also requires that
medium-duty passenger vehicles (a subset of vehicles 8,500 to 10,000
lbs gross vehicle weight) have fuel economy labels. We also are
finalizing minor changes related to the fuel economy information
program, including revising the comparable vehicle classes and adding a
new provision for the electronic distribution of the annual Fuel
Economy Guide. An overview of each of these requirements follows, with
additional detail provided in subsequent sections of this final rule.
1. Revised Methods for Calculating City and Highway Fuel Economy
Estimates
    This final rule revises the test methods by which the city and
highway fuel economy estimates are calculated. We are replacing the
current method, established in 1984, of adjusting the city (FTP) test
result downward by 10 percent and the highway (HFET) test result
downward by 22 percent. Instead, we are finalizing the proposed
approach that incorporates additional test methods that address factors
that impact fuel economy but that are missing from today's tests--
specifically, higher speeds, more aggressive driving (e.g., higher
acceleration rates), the use of air conditioning, and the effect of
cold temperature and other factors.
    Since 1984 when we last updated the fuel economy estimate
methodology, EPA has established several new test cycles for emissions
certification. EPA had become concerned that the FTP omitted many
critical driving modes and conditions that existed in actual use, and
that emissions could be substantially higher during these driving modes
compared to the FTP.\7\ Manufacturers frequently designed their
vehicles' emission control systems to meet the specified FTP test
conditions, often neglecting emissions control over other driving
conditions, resulting in higher real-world emissions.
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    \7\ Emissions from driving modes not reflected on EPA test
procedures became known as ``off-cycle'' emissions, meaning that
they occurred during driving conditions not typically encountered
over EPA's emission test cycle.
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    The need for action to address off-cycle emissions was recognized
by Congress in the passage of Sections 206(h) and 202(j) of the Clean
Air Act Amendments of 1990 (CAAA). Section 206(h) required EPA to study
and revise as necessary the test procedures used to measure emissions,
taking into consideration the actual current driving conditions under
which motor vehicles are used, including conditions relating to fuel,
temperature, acceleration, and altitude. Section 202(j) of the CAAA
required EPA to establish emission standards for carbon monoxide under
cold (20[deg]F) temperature conditions.
    In 1992, EPA published rules implementing the 202(j) cold
temperature testing requirement, acknowledging that the ambient
temperature conditions of the FTP test (run between 68 and 86 [deg]F)
did not represent the full range of ambient temperature conditions that
exist across the United States and that cold temperature had different
emissions effects on different vehicle designs.\8\ EPA's cold
temperature emission regulations required manufacturers to conduct FTP
testing at 20 [deg]F. By promulgating this new test procedure and
associated carbon monoxide emission standard, EPA sought to encourage
manufacturers to employ better emission control strategies that would
improve ambient air quality across a wider range of in-use temperature
conditions.
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    \8\ See 57 FR 31888 (July 17, 1992).
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    In fulfillment of the 206(h) CAAA requirement, EPA published a
report in 1993 which concluded that the FTP cycle did not represent the
full range of urban driving conditions that could impact the in-use
driving emission levels.\9\ Consequently, EPA promulgated a rule in
1996 that established two new test procedures, with associated emission
standards, that addressed certain shortcomings with the current FTP.
Known as the ``Supplemental FTP,'' or ``SFTP,'' these procedures,
similar to the cold temperature FTP, encouraged the use of the better
emission controls across a wider range of in-use driving conditions in
order to improve ambient air quality.\10\
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    \9\ U.S. Environmental Protection Agency. Federal Test Procedure
Review Project: Preliminary Technical Report. U.S. Environmental
Protection Agency, No. EPA420-R-93-007, May 1993.
    \10\ See 61 FR 54852 (October 22, 1996).
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    One of the SFTP test cycles, the US06, was designed to address high
speed, aggressive driving behavior (with more severe acceleration
rates) and rapid and frequent speed fluctuations. The US06 test
contains both lower-speed city driving and higher-speed highway driving
modes. Its top speed is 80 mph, and average speed is 48 mph. The top
acceleration rate exceeds 8 mph per second. The other SFTP test, the
SC03, was designed to address air-conditioner operation under a full
simulation of high temperature (95 [deg]F), high sun-load, and high
humidity. The SC03 drive cycle was designed to represent driving
immediately following a vehicle startup, and rapid and frequent speed
fluctuations. Its top speed is about 55 mph and average speed is 22
mph. The top acceleration rate is about 5 mph per second.
    The basis for the SFTP rulemaking was a study of real-world driving
in four cities, Baltimore, Spokane, Atlanta and Los Angeles, where
driving activity was measured on instrumented vehicles as well as by
chase cars.\11\ At that time, it was found that 18 percent of the
driving (in Baltimore) occurred outside of the speed/acceleration
distribution of the FTP drive schedule. More recent real-world driving
activity data indicates that driving has become even more aggressive
than it was in 1992. Recent real-world activity data collected in
California and Kansas City found that about 28 percent of driving
(vehicle miles traveled) is at speeds greater than 60 mph. Further,
about 33 percent of recent real-world driving falls outside of the FTP/
HFET speed and acceleration activity region. This is based on extensive
chase car studies in California and instrumented vehicle studies in
Kansas City.\12\ Our assessment of these

recent real-world driving activity studies is described in detail in
the Technical Support Document.
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    \11\ These studies were not designed to produce results that
would be representative of driving behaviors throughout the U.S.
Nonetheless, they were the best and most current data upon which to
base design of the new test cycles.
    \12\ A ``chase car'' study is a study in which driving behavior
is recorded by an instrumented vehicle that follows vehicles on the
road to record the behavior of the followed vehicle. In some cases
the chase car is equipped with a laser rangefinder to enable the
data collection systems to accurately determine the speed of the
chased vehicle relative to the chase car. An instrumented vehicle
study is a study in which data is collected from customer vehicles
where the customer has agreed to allow their vehicle to be equipped
with data collection instrumentation.
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    Clearly, the FTP and HFET tests alone do not fully capture the
broad range of real-world driving conditions; indeed, this has already
been conclusively demonstrated by the research that led to the revision
of the FTP for emission test purposes. In order for EPA's fuel economy
tests to be more representative of key aspects of real-world driving,
it is critical that we consider the test conditions represented by
these additional emission tests. The additional test methods will bring
into the fuel economy estimates the test results from the five
emissions tests in place today: FTP, HFET, US06, SC03, and Cold FTP.
Thus, we refer to this as the ``5-cycle'' method. The five test
procedures that make up the 5-cycle method and some of their key
characteristics are summarized in the table below.

                              Table I-1.--Characteristics of the Fuel Economy and Emission Tests of the 5-Cycle Methodology
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                                                                   Avg speed   Max speed   Max accel
                 Test                     Designed to represent      (mph)       (mph)     (mph/sec)     Ambient conditions            Primary use
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Federal Test Procedure (FTP)..........  Urban stop-and-go                 21          58         3.3  75 [deg]F...............  Emissions & fuel economy
                                         driving from 1970's.                                                                    testing.
Highway Fuel Economy Test (HFET)......  Rural driving...........          48          60         3.3  75 [deg]F...............  Fuel economy testing.
US06..................................  High speeds and                   48          80         8.5  75 [deg]F...............  Emissions testing.
                                         aggressive driving.
SC03..................................  Air conditioner                   22          55         5.1  95 [deg]F & 40% relative  Emissions testing.
                                         operation.                                                    humidity.
Cold FTP..............................  Cold temperature                  21          58         3.3  20 [deg]F...............  Emissions testing.
                                         operation.
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    Under the new requirements, rather than basing the city mpg
estimate solely on the adjusted FTP test result, and the highway mpg
estimate solely on the adjusted HFET test result, each estimate will be
based on a ``composite'' calculation of all five tests, weighting each
appropriately to arrive at new city and highway mpg estimates. The new
city and highway estimates will each be calculated according to
separate city and highway ``5-cycle'' formulae that are based on fuel
economy results over these five tests. The conditions represented by
each test will be ``weighted'' according to how frequently those
conditions occur over average real-world city or highway driving. For
example, we have derived weightings to represent driving cycle effects,
trip length, air conditioner compressor-on usage (it is the activity of
the compressor that most significantly affects emissions and fuel
economy), and operation over various temperatures. This methodology is
described in detail in Section II and in the Technical Support
Document.
    We also are finalizing a downward adjustment to account for effects
that are not reflected in our existing five test cycles. There are many
factors that impact fuel economy, but are difficult to account for in
the test cell on the dynamometer. These include roadway roughness, road
grade (hills), wind, low tire pressure, heavier loads, hills, snow/ice,
effects of ethanol in gasoline, larger vehicle loads (e.g., trailers,
cargo, multiple passengers), and others. We need to account for these
factors in our new fuel economy calculation methods, as they will lower
a driver's fuel economy beyond those factors represented by our
existing test cycles. We are finalizing a 9.5 percent downward
adjustment to account for these non-dynamometer effects, based on
detailed analyses of the impacts of each of these factors using the
most recent technical information and studies available. Additional
detail regarding this factor can be found in Section II and in the
Technical Support Document.
    Because the 5-cycle method is inherently vehicle-specific, the
difference between today's label values and the new fuel economy
estimates may vary significantly from vehicle to vehicle. In general,
however, the new approach will result in city fuel economy estimates
that are about 8 to 15 percent lower than today's labels for the
majority of conventional vehicles. The city mpg estimates for the
manufacturers of most vehicles will drop by about 12 percent on average
relative to today's estimates. For vehicles that achieve generally
better fuel economy, such as gasoline-electric hybrid vehicles, new
city estimates will be about 20 to 30 percent lower than today's
labels. The new highway fuel economy estimates will be about 5 to 15
percent lower for the majority of vehicles, including most hybrids. The
highway mpg estimates for the manufacturers of most vehicles will drop
on average by about 8 percent, with estimates for most hybrid vehicles
dropping by 10 to 20 percent relative to today's estimates.
    This final rule will greatly improve the EPA fuel economy
estimates, so that they come closer to the fuel economy that consumers
achieve in the real world. However, these are still estimates, and even
with the improved fuel economy test methods we are finalizing today,
some consumers will continue to get fuel economy that is higher or
lower than the new estimates. No single test or set of tests can ever
account for the wide variety of conditions experienced by every driver.
2. New Labeling Requirement for Medium-Duty Passenger Vehicles
    Based on the public comments and on specific events that have
transpired since the NPRM was published, we are finalizing in this rule
a fuel economy labeling program for Medium-Duty Passenger Vehicles
(MDPVs), a subset of vehicles between 8,500 and 10,000 lbs GVWR.
    MDPVs were first defined in the regulation that put in place the
``Tier 2'' emission standards and gasoline sulfur controls.\13\ This
newly-defined class of vehicles includes SUVs and passenger vans
between 8,500 and 10,000 lbs GVWR, but excludes large pick-up trucks.
The specific regulatory definition was designed to capture in the
light-duty vehicle emissions

program some of the heavy-duty vehicles that are designed and used
predominantly for passenger use.
---------------------------------------------------------------------------

    \13\ See 65 FR 6698 (Feb. 10, 2000).
---------------------------------------------------------------------------

    Under the Energy Policy and Conservation Act (EPCA), EPA is
required to establish regulations that require a manufacturer to attach
a label to each ``automobile'' manufactured in a model year.\14\
``Automobile'' is defined as a vehicle not more than 6,000 lbs GVWR,
and those vehicles between 6,000 and 10,000 lbs GVWR that DOT
determines are appropriate for inclusion in the Corporate Average Fuel
Economy (CAFE) program.\15\ ``Automobile'' for the purposes of labeling
also includes vehicles at no more than 8,500 lbs GVWR whether or not
the Department of Transportation (DOT) has included those vehicles in
the CAFE program.\16\ EPA has no authority to require labels on
vehicles that are not automobiles, therefore EPA has no authority to
require labeling of either vehicles above 10,000 lbs GVWR, or vehicles
between 8,500 and 10,000 lbs GVWR that are not included by DOT in the
CAFE program.
---------------------------------------------------------------------------

    \14\ See 49 U.S.C. 32908(b).
    \15\ See 49 U.S.C. 32901(a)(3).
    \16\ See 49 U.S.C. 32908(a).
---------------------------------------------------------------------------

    Since the time of EPA's proposal, DOT has included some vehicles
above 8,500 lbs GVWR and below 10,000 lbs in its CAFE program,
beginning in model year 2011.\17\ Since these vehicles now meet the
definition of automobile, EPA is authorized to include these vehicles
in labeling program. This final rule requires fuel economy labels on
these MDPVs beginning in model year 2011.
---------------------------------------------------------------------------

    \17\ See 71 FR 17565 (April 6, 2006).
---------------------------------------------------------------------------

3. Improved Fuel Economy Label Design
    We are adopting a new fuel economy label format that is easier to
read, has improved graphic design, and contains information that should
be more useful to prospective car buyers. The final label design
reflects input from the public comments received and from market
testing of prototype label designs conducted via a series of focus
groups. In addition to displaying revised city and highway mpg
estimates, the new label features the following items:
     A new layout featuring an updated fuel pump graphic, a
prominent heading, and prominent government logos;
     More prominent estimated annual fuel cost information,
including the addition of the basis for the estimated annual fuel cost
(dollars per gallon and miles driven per year);
     An easy-to-use graphic that allows quick comparison of the
labeled vehicle with other vehicles in its class;
     A simplified statement noting that ``Your mileage will
vary'';
     A link to the EPA/DOE Web site http://www.fueleconomy.gov; and,

     A transition statement noting that the mpg estimates are
the result of new EPA methods beginning with the 2008 models (for
inclusion on labels of model year 2008 and 2009 vehicles only).

Details about the label design and content are found in Section III. An
example label is shown below (actual size of the label is required by
statute to be 4.5 inches tall by 7 inches wide).

[GRAPHIC] [TIFF OMITTED] TR27DE06.017

4. New Vehicle Class Categories and Definitions
    EPCA requires that the label contain ``the range of fuel economy of
comparable automobiles of all manufacturers.'' \18\ EPA regulations
define what constitutes ``comparable automobiles.'' We proposed and are
finalizing changes to the vehicle class categories to better reflect
the current vehicle market and to allow consumers to make more
appropriate fuel economy comparisons. Specifically, we are finalizing
our proposal to add the vehicle class categories of ``Sport Utility
Vehicle'' and ``Minivan,'' with appropriate definitions, to the list of
categories used to classify vehicles for fuel economy comparison
purposes. We are also redefining the ``Small Pickup Truck'' class by
increasing the weight limit criteria. Section VI contains additional
detail on these changes.
---------------------------------------------------------------------------

    \18\ See 49 U.S.C. 32908(b)(1)(C).
---------------------------------------------------------------------------

5. Test Procedure Modifications
    We are finalizing several changes to existing test procedures to
allow the collection of appropriate fuel economy data and to ensure
that existing test procedures better represent real-world conditions.
Specifically, we are finalizing the following test procedure changes:
     A revised US06 test protocol that will collect the US06
exhaust emissions in two emissions samples (bags) in order to
separately assess city and highway fuel economy over this test, with
several alternative methods of determining a two-bag result allowed);
     Mandatory operation of the heater/defroster during the
cold temperature FTP for emissions and fuel economy testing;
     Testing diesel vehicles on the cold temperature FTP; and
     Requiring hybrid vehicles to perform all four phases/bags
of the FTP.

Details regarding these changes are described in Section IV.

C. Why Is EPA Taking This Action?

1. Energy Policy Act of 2005
    In the Energy Policy Act of 2005, Congress required EPA to update
or revise adjustment factors to better reflect a variety of real-world
factors that affect fuel economy. Section 774 of the Energy Policy Act
directs EPA to `` * * * update or revise the adjustment factors in
[certain sections of the fuel economy labeling regulations] to take
into consideration higher speed limits, faster acceleration rates,
variations in temperature, use of air conditioning, shorter city test
cycle lengths, current reference fuels, and the use of other fuel
depleting features.'' This final rule does take into account these
conditions and will address this statutory requirement. The Energy
Policy Act of 2005 and other relevant statutes are discussed in greater
detail in Section VII.
2. Comparing EPA Estimates to Actual Driving Experience
    First, it is important to stress that the EPA city and highway mpg
numbers are

estimates--they cannot give consumers an exact indication of the fuel
economy they will achieve. The complete range of consumer fuel economy
experience can not be represented perfectly by any one number. Fuel
economy varies based on a wide range of factors, some of which we have
discussed above. There will always be consumers that achieve real-world
fuel economy both better and worse than a given estimate.
    In recent years, there have been a number of studies, conducted by
a variety of sources, suggesting that there is often a shortfall
between the EPA estimates and real-world fuel economy. Several
organizations have provided consumers with their own fuel economy
estimates, which in some cases vary significantly from EPA's estimates.
Each of these studies differs in its test methods, driving cycles,
sampling of vehicles, and methods of measuring fuel economy. There are
strengths and weaknesses of each study, which we discuss further in the
Technical Support Document. Collectively, these studies indicate there
are many cases where real-world fuel economy falls below the EPA
estimates. The studies also indicate that real-world fuel economy
varies significantly depending on the conditions under which it is
evaluated. Nevertheless, taken as a whole, these studies reflect a wide
range of real-world driving conditions, and show that typical fuel
economy can be much lower than EPA's current estimates.
3. Representing Real-World Conditions on the Fuel Economy Tests
    The current city and highway fuel economy tests do not represent
the full range of real-world driving conditions. The 1985 adjustment
factors were designed to ensure that the fuel economy estimates across
the vehicle fleet reflected the average impacts of a number of
conditions not represented on the tests. However, as we noted earlier,
many changes have occurred since then that make it once again desirable
to reevaluate the fuel economy test methods and adjustment factors.
Given the significant degree of variation that is apparent across
vehicles, we believe it is important to reconsider the approach of
``one-size-fits-all'' adjustment factors and instead move to an
approach that more directly reflects the impacts of fuel economy on
individual vehicle models.
    There are several key limitations in the FTP and HFET tests that
cause them to not adequately reflect real-world driving today. First,
most consumers understandably think ``highway'' fuel economy means the
fuel economy you can expect under freeway driving conditions. In fact,
the highway test has a top speed of 60 mph, since the test was
developed more than 20 years ago to represent rural driving conditions
at a time when the national speed limit was 55 miles per hour. The
national speed limit has since been eliminated, many states have
established speed limits of 65 to 70 miles per hour, and much driving
is at even higher speeds. Recent real-world driving studies indicate
that about 28 percent of driving (vehicle miles traveled, or VMT) is at
speeds of greater than 60 mph. (This analysis is detailed in the
Technical Support Document.) These studies also show that 33 percent of
real-world driving VMT falls outside the FTP/HFET speed and
acceleration activity region. Thus, a substantial amount of high speed
driving behavior is not captured in today's FTP or HFET tests. This is
a weakness in our current fuel economy test procedures. Since higher
speed driving has a negative impact on fuel economy, incorporating
these higher speed driving conditions into the fuel economy tests would
lower the fuel economy estimates.
    Second, the maximum acceleration rates of both the FTP and HFET
tests are a relatively mild 3.3 miles-per-hour per second (mph/sec),
considerably lower than the maximum acceleration rates seen in real-
world driving. Recent real-world driving studies indicate that maximum
acceleration rates are as high as 11 to 12 mph/sec and significant
activity occurs beyond 3.3 mph/sec. (This analysis is detailed in the
Technical Support Document.) At the time these tests were first
developed, the real-world accelerations were higher than 3.3 mph/sec,
but the test cycle's acceleration rates were limited to accommodate the
mechanical limitation of the dynamometer test equipment. These
constraints no longer exist with today's dynamometers, so we now have
the ability to incorporate higher maximum acceleration rates that more
closely reflect those of actual driving. As with high speed driving,
higher acceleration rates have a negative impact on fuel economy; thus,
if these higher accelerations were factored into our fuel economy
methods, the estimates would be lower.
    The maximum deceleration rate of the FTP and HFET tests is
important to consider as well, because it relates to the regenerative
breaking effect of hybrid electric vehicles. The FTP and HFET tests
include a mild maximum deceleration rate of -3.3 mph/sec; yet in recent
real-world driving rates as high as -11 to -17 mph/sec were recorded.
(This analysis is detailed in the Technical Support Document.) Under
higher deceleration rates, the effects of regenerative breaking for
hybrid electric vehicles are diminished, thereby lowering fuel economy.
In this regard, today's FTP and HFET tests result in a higher fuel
economy for hybrid vehicles than is achieved under typical driving
conditions.
    Third, both the FTP and HFET tests are run at mild ambient
conditions (approximately 75 [deg]F), while real-world driving occurs
at a wide range of ambient temperatures. Moderate conditions tend to be
optimal for achieving good fuel economy, and fuel economy is lower at
temperatures colder or warmer than the 75 [deg]F test temperature. Only
about 20 percent of VMT occurs between 70 and 80 [deg]F, approximately
15 percent of VMT occurs at temperatures above 80 [deg]F, and 65
percent occurs below 70 [deg]F. (This analysis is detailed in the
Technical Support Document.) Moreover, neither the FTP nor HFET tests
are run with accessories operating, such as air conditioners, heaters,
or defrosters. These accessories, most notably air conditioning, can
have a significant impact on a vehicle's fuel economy.
    Finally, there are many factors that affect fuel economy that
cannot be replicated on dynamometer test cycles in a laboratory. These
include road grade, wind, vehicle maintenance (e.g., tire pressure),
snow/ice, precipitation, fuel effects, and others. It is not possible
to develop a test cycle that captures the full range of factors
impacting fuel economy. However, it is clear that the FTP and HFET
tests alone are missing some important elements of real-world driving.
All of these factors can reduce fuel economy. This largely explains why
our current estimates often do not reflect consumers' real-world fuel
economy experience.

D. When Will the New Requirements Take Effect?

1. New City and Highway Fuel Economy Estimates
    We want the public to benefit from the improved information
provided by the new fuel economy estimates as soon as possible.
Therefore, these new regulations take effect with the 2008 model year
vehicles, which will be available for sale at dealers in 2007. We
believe this is the earliest possible date for implementation.
Manufacturers can legally begin selling 2008 models as early as January
2, 2007. However, we are phasing in the new test methods in order to
provide manufacturers with sufficient lead time to plan for increased
fuel economy testing necessitated by the 5-cycle approach.

    For the first three model years (2008 through 2010), we provide
manufacturers with the option of deriving the 5-cycle fuel economy
using a scale of adjustments based on an analysis of data developed
from the 5-cycle method. This approach, called the ``mpg-based''
method, incorporates the effects of higher speed/aggressive driving,
air conditioning use, and colder temperatures, but less directly than
the 5-cycle vehicle-specific method.\19\ The mpg-based adjustments were
derived by applying the 5-cycle formulae to a data set of recent fuel
economy test data, and developing a regression line through the data.
(See Section II for a full description of this approach). These
adjustments differ based on the mpg a vehicle obtains over the FTP
(City) or HFET (Highway) tests. In other words, every vehicle with the
same mpg on the FTP test receives the same adjustment for its city fuel
economy label. Likewise, every vehicle with the same mpg on the HFET
test will receive the same adjustment for its highway fuel economy
label. This method of adjustment would not require any testing beyond
the FTP/HFET tests already performed today, thus, it can be implemented
sooner than the 5-cycle approach as an interim improvement to our fuel
economy test methods. However, during this time frame, manufacturers
may optionally choose to run full 5-cycle testing for any of their
vehicle models.\20\ The phase-in will provide consumers with more
accurate estimates as soon as possible, while allowing the industry the
necessary lead time to prepare for the necessary testing under the 5-
cycle approach.
---------------------------------------------------------------------------

    \19\ The ``mpg-based'' method is termed the ``derived 5-cycle''
approach in the regulatory text.
    \20\ Any manufacturer that chooses to optionally use the 5-cycle
approach prior to the 2011 model year must use that approach to
determine both city and highway label estimates.
---------------------------------------------------------------------------

    Starting with the 2011 model year, the 5-cycle approach will be
required. Under this approach, the manufacturers will be required to
implement vehicle-specific 5-cycle testing across some portion of their
fleet. The manufacturers will use the emission certification test
results over the five test procedures to calculate 5-cycle city and
highway fuel economy values. However, we are finalizing criteria as
proposed that will allow continued use of the mpg-based adjustments in
cases where we can predict with reasonable certainty that the fuel
economy results under the mpg-based approach will not differ
significantly from the results achieved by the 5-cycle method. These
criteria and the methodology by which vehicles are selected for 5-cycle
testing in the 2011 and later model years are described in detail in
Section II.
2. Implementation of New Label Design
    In order to allow manufacturers to transition to the new label
format, we are allowing use of the new label format to be optional
until September 1, 2007. This date aligns with the date manufacturers
must place National Highway Traffic Safety Administration (NHTSA) crash
test ratings on the vehicle pricing labels of all vehicles manufactured
as of that date. The September 1, 2007 date allows manufacturers to
redesign their vehicle pricing labels only once to incorporate two new
federal labeling requirements. However, we encourage manufacturers to
implement the new label format as quickly as possible such that the
majority of 2008 vehicles on dealer lots exhibit the new label format.
All 2008 model year vehicles must use the new methods to calculate fuel
economy estimates. Labels on all 2008 models will have a statement
indicating that the fuel economy estimates are based on new methods.
3. Fuel Economy Labeling of Medium-Duty Passenger Vehicles
    The requirement for MDPVs to be labeled with city and highway fuel
economy estimates begins with the 2011 model year. EPA does not have
the authority to require labeling of MDPVs sooner because of our
authority is linked to NHTSA's determination of CAFE standards for
vehicles over 8,500 lbs GVWR.\21\ However, we encourage manufacturers
to voluntarily label these vehicles sooner, if at all possible. Many
vehicles in the MDPV category have counterpart models below 8,500 lbs
GVWR, and these vehicles receive fuel economy labels today.
---------------------------------------------------------------------------

    \21\ See 49 U.S.C. 32908, 32901(a)(3)(B), and Section VII for a
detailed explanation of EPA's legal authority.
---------------------------------------------------------------------------

E. Periodic Evaluation of Fuel Economy Labeling Methods

    In the proposal, we expressed an interest in ensuring that the new
methods continue to reflect real-world fuel economy into the future,
and we encouraged stakeholders to submit data that would inform future
analysis and potential changes to the methodology. We believe it is
critical to ensure that the fuel economy methods are periodically
evaluated. We are committed to evaluating the 5-cycle method every
several years (e.g., five years) to ensure that it appropriately
accounts for advancements in vehicle technology, changes in driving
patterns, and any new data collected on in-use fuel economy. We also
remain open to reviewing any valid test data indicating that any of our
assumptions were inappropriate for a specific vehicle and considering
modifications to the 5-cycle formulae overall to account for these
differences. In the public comments, some stakeholders expressed an
interest in conducting studies of in-use fuel economy. We welcome
stakeholders to submit any such future data for use in our periodic
evaluation of the fuel economy test methods.
    We are also committed to offering technical guidance to any
stakeholder interested in undertaking an in-use testing and data-
collection program. By seeking our technical input up front,
stakeholders can better ensure that the data is collected in a way that
is ultimately best-suited to evaluate potential changes to the
methodology. However, we note that collecting in-use fuel economy data
alone can only indicate whether or not the 5-cycle estimates are
accurate; it would not provide the information needed to actually
improve the 5-cycle equations. The 5-cycle approach is based on
emission test results over the five test cycles and on the weighting of
a number of factors based on their average impact across all U.S.
driving. Data on in-use fuel economy alone, without complementary
driving behavior and activity data representative of the fleet, is
insufficient to initiate changes that may be appropriate to the 5-cycle
weighting factors.
    Finally, several commenters suggested that EPA conduct an
evaluation of the 5-cycle method prior to model year 2011, when the 5-
cycle method becomes required. If appropriate data is submitted prior
to the end of 2008, we would plan to review it in a timely manner. If
such data suggests that changes to the 5-cycle approach are necessary,
we would plan to issue a separate rulemaking to address changes to the
methodology, providing adequate lead time to the industry to comply.

F. This Final Rule Does Not Impact CAFE Standards or Test Procedures

    This final rule does not alter the FTP and HFET driving cycles, the
measurement techniques, or the calculation methods used to determine
CAFE. EPCA requires that CAFE for passenger automobiles be determined
from the EPA test procedures in place as of 1975 (or procedures that
give comparable results), which are the city and highway tests of
today, with a few small adjustments for minor procedural changes that
have occurred since

1975.\22\ This final rule will not impact the CAFE calculations.
---------------------------------------------------------------------------

    \22\ See 49 U.S.C. 32904(c).
---------------------------------------------------------------------------

G. Public Participation

    A wide variety of interested parties participated in the rulemaking
process that culminates with this final rule. This process provided
opportunity for public comment following the proposal published on
February 1, 2006.\23\ We held a public hearing on the proposal in
Romulus, Michigan on March 3, 2006. At that hearing, oral comments on
the proposal were received and recorded. A written comment period
remained open until April 3, 2006. Comments and hearing testimony have
been placed in the docket for this rule. We considered these comments
in developing the final rule.
---------------------------------------------------------------------------

    \23\ See 71 FR 5426 (Feb. 1, 2006).
---------------------------------------------------------------------------

    We have prepared a detailed Response to Comments document, which
describes the comments we received on the proposal and our response to
each of these comments. The Response to Comments is available in the
docket for this rule and on the EPA Web site.\24\
---------------------------------------------------------------------------

    \24\ See http://www.epa.gov/fueleconomy/ or http: //

http://www.regulations.gov.

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

II. New Test Methods and Calculation Procedures for Fuel Economy Labels

    The current fuel economy label values are based on measured fuel
economy over city and highway driving cycles, which are then adjusted
downward by 10 and 22 percent, respectively, to account for a variety
of factors not addressed in EPA's vehicle test procedures. These
adjustments are intended to account for differences between the way
vehicles are driven on the road and over the test cycles. Such
differences include air conditioning use, higher speeds, more
aggressive accelerations and decelerations, widely varying ambient
temperature and humidity, varying trip lengths, wind, precipitation,
rough road conditions, hills, etc. The purpose of the new methods is to
expand the basis for the fuel economy labels to include actual vehicle
testing over a wider range of driving patterns and ambient conditions
than is currently covered by the city (FTP) and highway (HFET) fuel
economy tests.
    For example, vehicles in the real world are often driven more
aggressively and at higher speeds than is represented in the FTP and
HFET tests. The incorporation of measured fuel economy over the US06
test cycle into the fuel economy label values will make the label
values more realistic. Drivers often use air conditioning in warm,
humid conditions, while the air conditioner is turned off during the
FTP and HFET tests. The incorporation of measured fuel economy over the
SC03 test cycle into the fuel economy label values will reflect the
added fuel needed to operate the air conditioning system. Vehicles also
often are driven at temperatures below 75[deg]F, at which the FTP and
HFET tests are performed. The incorporation of measured fuel economy
over the cold temperature FTP test into the fuel economy label values
will reflect the additional fuel needed to start up a cold engine at
colder temperatures.
    The new vehicle-specific, 5-cycle approach to calculating fuel
economy labels will incorporate estimates of the fuel efficiency of
each vehicle during high speed, aggressive driving, air conditioning
operation and cold temperatures into each vehicle's fuel economy label.
It will combine measured fuel economy over the two current fuel economy
tests, the FTP and HFET, as well as that over the US06, SC03 and cold
FTP tests into estimates of city and highway fuel economy for labeling
purposes. The test results from each cycle (and in some cases, portions
of cycles or emission ``bags'')\25\ will be weighted to represent the
contribution of each cycle's attributes to onroad driving and fuel
consumption. The vehicle-specific, 5-cycle approach will eliminate the
need to account for the effect of aggressive driving, air conditioning
use and colder temperatures on fuel economy through generic factors (as
done today) which may not appropriately reflect that particular
vehicle's sensitivity to these factors. A generic adjustment is still
necessary to account for factors not addressed by any of the five
dynamometer tests (e.g., road grade, wind, low tire pressure, gasoline
quality, etc.). The derivation of this adjustment factor is discussed
further below and in Chapter III of the Technical Support Document.
---------------------------------------------------------------------------

    \25\ The FTP consists of two parts, referred to in the
regulations as the ``cold start'' test and the ``hot start'' test.
Each of these parts is divided into two periods, or ``phases'': a
``transient'' phase and a ``stabilized'' phase. Because the
stabilized phase of the hot start test is assumed to be identical to
the stabilized phase of the cold start test, only the cold start
stabilized phase is typically run. These ``phases'' are often called
``bags,'' terminology that results from the sample bags in which the
exhaust samples are collected. The phases are run in the following
order: Cold start transient (Bag 1), cold start stabilized (Bag 2),
and hot start transient (Bag 3).
---------------------------------------------------------------------------

    Currently, the US06, SC03 and cold FTP tests are only performed on
a sub-set of new vehicle configurations, and only for emissions
compliance purposes. In contrast, for fuel economy purposes, FTP and
HFET tests are performed on many more vehicle configurations. In order
to minimize the number of additional US06, SC03 and cold FTP tests
resulting from the new testing and calculation procedures, we are
allowing manufacturers to estimate the fuel economy over these three
tests for vehicle configurations that are not normally tested for
emissions compliance purposes, using the fuel economy measurements that
are normally available. This is currently done on a more limited basis
for both the FTP and HFET, and is referred to as analytically derived
fuel economy (ADFE).\26\ This method uses test data to determine the
sensitivity of fuel economy to various vehicle parameters, and once
these relationships are well established, we will issue guidance that
provides manufacturers with the appropriate equations to use. We
believe that these provisions are designed to represent a reasonable
balance between the need for accurate fuel economy data and the need to
contain the cost of testing for both industry and EPA, where we
reasonably believe that actual testing would not produce a
significantly different result. We always retain the right to order
actual confirmatory testing where appropriate.
---------------------------------------------------------------------------

    \26\ EPA's current policy for analytically derived fuel economy
estimates for the FTP and HFET tests is contained in the EPA
memorandum entitled, ``Updated Analytically Derived Fuel Economy
(ADFE) Policy for 2005 Model Year,'' March 11, 2004, CCD-04-06 (LDV/
LDT). This memorandum is issued under 40 CFR 600.006-89(e), which
allows manufacturers to use analytical methods to determine fuel
economy.
---------------------------------------------------------------------------

    We also are finalizing the proposed provisions that allow
manufacturers to use the interim approach to fuel economy label
estimation, the ``mpg-based'' approach described below, when the
available 5-cycle fuel economy data indicate that a vehicle test
group's 5-cycle fuel economy is very close to that estimated by the
mpg-based curve. The mpg-based method will also be used to determine
label values for MDPVs that become mandatory with the 2011 model year,
as discussed further in Section II.E.2.
    Even with these provisions, we expect that some manufacturers will
have to perform some additional US06, SC03, or cold FTP tests to
address differences in vehicle designs which are not covered by the
analytical derivation methodology. Other manufacturers may voluntarily
choose to perform additional tests voluntarily to improve accuracy over
the analytical derivation methodology, especially in cases where

manufacturers have worked to improve fuel efficiency over the new test
cycle conditions (e.g., during cold temperatures or with air
conditioning on). Depending on how manufacturers choose to apply this
method, this additional testing could prompt the construction or
modification of test facilities. (Test burden and cost issues are
discussed further in Section V of this preamble.) Therefore, in order
to allow sufficient lead-time for the construction of these facilities,
we are finalizing the proposed provisions that allow manufacturers the
option of using an interim set of adjustments through the 2010 model
year. These interim adjustments are not vehicle-specific, but instead
reflect the effects of high speeds, hard accelerations, air
conditioning use, and cold temperatures, etc., on the average vehicle.
The vehicle-specific 5-cycle approach becomes mandatory with the 2011
model year. However, a manufacturer can voluntarily use the 5-cycle
method prior to the 2011 model year for any vehicle model.\27\
---------------------------------------------------------------------------

    \27\ Any manufacturer that chooses to optionally use the 5-cycle
approach prior to the 2011 model year must use that approach to
determine both city and highway label estimates.
---------------------------------------------------------------------------

    The interim set of adjustments is termed the ``mpg-based''
approach. (See Figure II-1 for a graphical depiction of these
adjustments.) The mpg-based approach is a sliding scale of adjustments
which varies according to a vehicle's measured fuel economy over the
FTP and HFET tests. The mpg-based adjustments were developed from
applying the 5-cycle formulae to 615 recent model year vehicles and
determining the average difference between the 5-cycle and current city
and highway fuel economies.\28\ Thus, because the data used to develop
the mpg-based adjustments were derived from 5-cycle fuel economies, the
mpg-based adjustments include the effects of high speeds, aggressive
driving, air conditioning, and colder temperatures. However, they do so
based on the impact of these factors on the average vehicle, not the
individual vehicle, which is the case with the 5-cycle formulae. For
example, for vehicles with fuel economy of 20-30 mpg over the FTP
(i.e., city) test, the mpg-based approach would adjust the city fuel
economy downward by 20-22 percent (or 4 to 7 mpg), versus today's
single 10 percent downward adjustment. Thus, city fuel economy label
values under the mpg-based approach tend to be about 11 percent lower
on average than today's label values. For vehicles with fuel economy of
25-35 mpg over the HFET (i.e., highway) test, the mpg-based approach
would adjust the highway fuel economy downward by about 28 percent (or
7 to 10 mpg), versus today's 22 percent downward adjustment. Thus,
highway fuel economy label values under the mpg-based approach would
tend to be about 8 percent lower than today's label values.
---------------------------------------------------------------------------

    \28\ Our database consists of 615 vehicles spanning the 2003 to
2006 model years. For these vehicles we have emission and/or fuel
economy test data on all five test procedures. Additionally,
manufacturers assisted with the development of this database by
submitting detailed fuel economy data for the three phases (or
``bags'') of the FTP and the Cold FTP (EPA requires that they submit
only the composite emissions and fuel economy data for certification
or fuel economy labeling). The database includes data from 14 hybrid
vehicles and one diesel vehicle, and represents all types of
vehicles from all major manufacturers and most smaller
manufacturers.
---------------------------------------------------------------------------

    Given that both approaches utilize the 5-cycle fuel economy
formulae in some fashion, it is useful to begin this section with a
description of how the fuel economy measured over the 5 test cycles are
combined to represent city and highway fuel economy. Then we will
describe how the fleet-average formulae for the mpg-based approach were
derived from these 5-cycle fuel economy estimates. Finally, we compare
fuel economy label results from both the 5-cycle and mpg-based methods
to onroad fuel economy data from a variety of sources.
    Under the new methods, we are replacing the 0.90 and 0.78
adjustment factors for city and highway fuel economy, respectively,
with new factors which are not simply constants. For model years 2008-
2010, a manufacturer has the option of using two distinct methodologies
to calculate the city and highway fuel economy values for any specific
vehicle. One approach is called the mpg-based method, since the city
and highway label values are based on the fuel economy (or mpg)
measured over the FTP and HFET, respectively. The other approach is
called the vehicle-specific 5-cycle approach, since the city and
highway label values are based on the test results of five test cycles,
the FTP, HFET, US06, SC03 and cold FTP. Both approaches also include an
additional downward adjustment to represent effects not reflected in
our existing laboratory dynamometer testing. Beginning with the 2011
model year, manufacturers are required to use the vehicle-specific 5-
cycle method, but may still use the mpg-based approach on vehicles most
sensitive to the new test conditions. Under the vehicle-specific 5-
cycle approach, the fuel economy measurements over the 5 dynamometer
test cycles will all be performed on (or estimated for) a specific
vehicle in the current model year. The mpg-based approach uses historic
fuel economy data over the 5 test cycles to estimate a fleet-wide
average relationship between (1) FTP fuel economy and 5-cycle city fuel
economy, and (2) HFET fuel economy and 5-cycle highway fuel economy.
Under the mpg-based approach, a specific vehicle's city and highway
fuel economy labels are based on this fleet-wide average relationship,
as opposed to that vehicle's own results over the 5 test cycles. In
other words, under the mpg-based approach every vehicle with the same
fuel economy over the FTP test will receive the same city fuel economy
label value. Likewise, every vehicle with the same fuel economy over
the HFET test will receive the same highway fuel economy label value.
This is illustrated further in Section II.B below. Below we present the
specific equations under the two approaches which would be used to
convert fuel economies measured over the dynamometer cycles into city
and highway fuel economy values.

A. Derivation of the Vehicle-Specific 5-Cycle Methodology

    The vehicle-specific, 5-cycle approach bases a vehicle's fuel
economy label values on fuel economy measurements over five test
cycles: FTP, HFET, US06, SC03 and cold FTP. These measurements are
combined based on detailed estimates, or ``weightings,'' of how and
when vehicles are driven, as well as under what ambient conditions. The
5-cycle formulae are derived from extensive data on real-world driving
conditions, such as driving activity, temperatures, air conditioner
operation, trip length, and other factors. We refer readers to the
Technical Support Document for a detailed description of the
development of the 5-cycle fuel economy formulae.
1. Overview of Public Comments on the 5-Cycle Methodology
    Of those commenters addressing the 5-cycle formulae, most commented
on the thoroughness of the analyses which supported the various cycle
weighting factors (also called coefficients) included in the formulae.
However, Honda, and to some extent Environmental Defense, criticized
several aspects of the 5-cycle formulae. These comments are addressed
in detail in the Response to Comments document. Overall, the key
criticisms included:
    (1) The 5-cycle formulae had not been validated for individual
vehicles. In particular, these commenters claimed that the 5-cycle
coefficients assume that all vehicles respond the same to various

changes in driving pattern and ambient conditions;
    (2) The three new test cycles represent extreme conditions, and;
    (3) The 5-cycle method could penalize advanced fuel efficient
technologies.

We present a summary of our responses to these three concerns below.
Additional detail can be found in the Response to Comments Document.
    First, all of the approaches to calculating label values involve
relationships between driving activity or ambient conditions and fuel
consumption. These relationships are never exact for each and every
vehicle. The 5-cycle formulae utilize more vehicle-specific fuel
consumption data than the mpg-based and current label approaches.
Therefore, the 5-cycle approach is based on fewer assumptions regarding
how individual vehicles react to temperature, soak time, low and high
speed driving, aggressive driving, idling, air conditioning, etc. The
5-cycle method, by incorporating additional data from the three newer
test cycles, improves our ability to estimate fuel economy outside of
the conditions evaluated by the FTP and HFET tests. We provide examples
and a detailed description of this analysis in the Technical Support
Document.
    Second, Honda states that the three new tests address vehicle
conditions that are so extreme that their use in the above types of
interpolations is actually worse than simply assuming that all vehicles
have the same response to the conditions being addressed by the three
tests. However, none of the available data indicates that this is the
case, and Honda did not provide data to support their claim. All of the
driving conditions addressed by the three tests clearly occur in-use.
Our detailed analysis of recent real-world driving activity studies is
contained in the Technical Support Document and Response to Comments
document. In particular, use of fuel economy data over the cold FTP at
20 [deg]F improves our ability to estimate fuel economy at 50 [deg]F,
compared to projecting fuel economy at 50 [deg]F solely using the FTP
test data at 75 [deg]F. This analysis is detailed in the Technical
Support Document as well.
    Third, Honda states that these aspects of the 5-cycle formulae
might actually penalize advanced fuel-efficient technology relative to
conventional technology vehicles. Our comparisons of 5-cycle fuel
economy for hybrids fall in the range of onroad fuel economy estimates
developed by various organizations (see Section II of the Technical
Support Document). It is true that the 5-cycle formulae decrease the
fuel economy of some hybrid vehicles more than conventional vehicles,
compared to the current label approach. However, this is easily
explained by the way that current hybrid technology works under various
operational and ambient conditions. For example, many current hybrid
engine shut-off strategies cease to operate when the heater is turned
on at cold temperatures. The current label approach assumes that any
engine shut-off strategies operating over the FTP and HFET tests always
operate in in-use. This is clearly not correct. Thus, some additional
adjustment to current hybrid vehicle fuel economy is to be expected.
Available data on hybrid fuel economy outside of the conditions
addressed by the FTP and HFET confirm the impact of the 5-cycle
formulae. We expect that future hybrid technology will significantly
improve fuel economy over real-world conditions outside the FTP and
HFET tests. Such improvements in real-world fuel economy will be
reflected under the new 5-cycle estimates.
2. Changes to the 5-Cycle Methodology From Proposal
    We received very few comments that provided new data with which to
modify the proposed methodology. However, based on a few comments and
new data we obtained, the methodology we are finalizing differs from
the proposed methodology in three ways. First, we reevaluated an
assumption with respect to the effect of ambient temperature on running
fuel use. This reduced the weighting factor for cold temperature
running fuel use. Second, we obtained new vehicle trip length data from
extensive vehicle monitoring ongoing in Atlanta. This increased our
estimate of trip length during city driving, which then reduced the
contribution of start fuel use to average fuel consumption during city
driving. Third, we updated our analyses based on the Federal Highway
Administration's release of 2004 fuel economy estimates and revised
2003 fuel economy estimates. This analysis, along with addressing
public comments, decreased the non-dynamometer adjustment factor
slightly. Readers are referred to the Technical Support Document for
detailed discussions of the analyses noted briefly below.
    In response to Honda's comments regarding the assumptions involved
in developing the 5-cycle formulae, we reevaluated our assumption
regarding the effect of ambient temperature on running fuel use. This
was the one area where the relationship in the proposed 5-cycle formula
was based on a simple assumption of linearity and not on the results of
actual vehicle testing. We performed an analysis of running fuel use of
several vehicles tested at 20 [deg]F, 50 [deg]F, and 75 [deg]F and
determined that the effect was non-linear. Using the new relationship
reduced the city and highway formulae's weighting of running fuel use
at 20 [deg]F from 0.30 to 0.18.
    Since the time of the proposal, we also obtained vehicle trip data
from extensive vehicle monitoring which is ongoing in Atlanta. Across a
total of 668,000 vehicle trips, the average trip length was found to be
7.25 miles. This is 20 percent longer than found in Atlanta in the
early 1990's. When we extrapolate this increase to the results of other
studies performed in the early 1990's, we determined that a more
reasonable estimate of trip length during city driving would be 4.1
miles, as opposed to the 3.5 mile estimate proposed in the 5-cycle city
fuel economy formulae. This effectively reduces the contribution of
start fuel use in the estimation of city fuel economy.
    Also, since the proposal, the Federal Highway Administration
published onroad fuel economy estimates for 2004, as well as a revised
onroad fuel economy estimate for 2003. These estimates are roughly 3%
lower than those contained in their 2003 report, which was the basis of
our proposal. At the same time, Honda correctly pointed out that we had
inappropriately assumed that the changes in FTP and HFET test
procedures implemented with the Supplemental FTP rule increased
measured fuel economy by 3%. These changes, plus other minor
adjustments, led us to revise the factor for non-dynamometer effects
from 0.89 to 0.905 (meaning that this factor further reduces both city
and highway estimates by 9.5 percent). Detailed discussion and analyses
of the non-dynamometer factor can be found in Section 5.0 of the
Response to Comments document and Chapter III of the Technical Support
Document.
    With these revisions, under the vehicle-specific 5-cycle approach,
the city fuel economy value will be calculated as follows:

[GRAPHIC] [TIFF OMITTED] TR27DE06.000

Where:
[GRAPHIC] [TIFF OMITTED] TR27DE06.001

Where:
[GRAPHIC] [TIFF OMITTED] TR27DE06.002

Where:

Bag y FEx = the fuel economy in miles per gallon of fuel
during the specified bag of the FTP test conducted at an ambient
temperature of 75 [deg] or 20 [deg]F.

For hybrid gasoline-electric vehicles tested over a 4-bag FTP the
calculation for start fuel consumption is somewhat different:
[GRAPHIC] [TIFF OMITTED] TR27DE06.003

Where:
[GRAPHIC] [TIFF OMITTED] TR27DE06.004

and
[GRAPHIC] [TIFF OMITTED] TR27DE06.005

Likewise,

[GRAPHIC] [TIFF OMITTED] TR27DE06.006

Where:

US06 FE = fuel economy in mile per gallon over the US06 test,
HFET FE = fuel economy in mile per gallon over the HFET test,
SC03 FE = fuel economy in mile per gallon over the SC03 test.

Hybrid gasoline-electric vehicles tested over a 4-bag 75 [deg]F FTP
will substitute the fuel economy over Bag 4 for Bag 2 in the
appropriate places in the above equation (except in the case of the
cold FTP, where hybrids, like conventional vehicles, will run a 3-bag
test). The resulting equation for hybrid vehicles thus becomes:

[GRAPHIC] [TIFF OMITTED] TR27DE06.007

    Under the vehicle-specific 5-cycle formula, the highway fuel
economy value would be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TR27DE06.008

Where:
[GRAPHIC] [TIFF OMITTED] TR27DE06.009

and,

[GRAPHIC] [TIFF OMITTED] TR27DE06.010

where the various symbols have the same definitions as described
under the formula for the vehicle-specific 5-cycle city fuel economy
value.

    For hybrid gasoline-electric vehicles tested over a 4-bag 75 [deg]F
FTP the highway fuel economy is calculated using the following
equations:
[GRAPHIC] [TIFF OMITTED] TR27DE06.011

Where:
[GRAPHIC] [TIFF OMITTED] TR27DE06.012

Where:
[GRAPHIC] [TIFF OMITTED] TR27DE06.013

and,
[GRAPHIC] [TIFF OMITTED] TR27DE06.014

and,

[GRAPHIC] [TIFF OMITTED] TR27DE06.015

Where:

US06 Highway FE = fuel economy in miles per gallon over the Highway
portion of the US06 test,
HFET FE = fuel economy in miles per gallon over the HFET test,
SC03 FE = fuel economy in miles per gallon over the SC03 test.

    Additional equations are necessary in the unusual cases where a
manufacturer test a hybrid gasoline-electric vehicle using a 2-bag FTP;
these equations are detailed in the Technical Support Document.

B. Derivation of the MPG-Based Methodology

    Although the 5-cycle vehicle-specific method will be optionally
available to manufacturers starting with the 2008 model year, it is the
mpg-based approach that will be more widely utilized for the 2008
through 2010 model years. Starting with the 2011 model year the mpg-
based approach may continue to be used where test data demonstrates
that the 5-cycle method is unlikely to produce significantly different
results. The mpg-based method applies an adjustment to a vehicle's FTP
or HFET test result based on that vehicle's measured fuel economy on
the FTP or HFET.
    The mpg-based adjustments were developed from applying the 5-cycle
formulae to fuel economy data from 615 recent model year vehicles and
determining the average relationship between the 5-cycle city and
highway fuel economy values and FTP and HFET fuel economy values. Thus,
because the data used to develop the average adjustments were derived
from 5-cycle fuel economies, the mpg-based adjustments include the
effect of high speeds, aggressive driving, air conditioning, and colder
temperatures. However, they do so based on the impact of these factors
on the average vehicle and do not reflect the fuel economy actually
achieved during these types of driving by individual vehicles, which is
the case with the 5-cycle formulae. As indicated by a comparison of the
fuel economy label values developed using the mpg-based and 5-cycle
approaches (see Figures II-1 and II-2), these ``fleet-average''
adjustments are reasonably accurate for most vehicles.
    For example, for vehicles with FTP fuel economy ranging from 20 to
30 mpg, the mpg-based approach will adjust the FTP fuel economy result
downward by 20-22 percent (i.e., by 4 to 7 mpg), versus today's 10
percent downward adjustment. Thus, city fuel economy label values under
the mpg-based approach will tend to be about 10-12 percent lower than
today's label values. For vehicles with HFET fuel economy in the range
of 25 to 35 mpg the mpg-based approach on average will adjust the HFET
fuel economy downward by 28 percent (i.e., by 7 to 10 mpg), versus
today's 22 percent downward adjustment. Thus, highway fuel economy
label values under the mpg-based approach will tend to be about 8
percent lower than today's label values.
    The characteristics of the mpg-based equations can be seen in
Figures II-1 and II-2 below. The 5-cycle fuel economies for 615 recent
model year vehicles are represented by the individual data points on
the charts. Hybrid vehicles are represented by large squares on the
charts. The mpg-based fuel economy curve, represented by the regression
line on the chart, was developed from these data. The horizontal axis
is the measured FTP fuel economy.
    Under the mpg-based approach, the city fuel economy value will be
calculated as follows:
[GRAPHIC] [TIFF OMITTED] TR27DE06.016

Where:

FTP FE = the fuel economy in miles per gallon of fuel during the FTP
test conducted at an ambient temperature of 75[deg]F. This value is
normally a sales-weighted average of the vehicle models included in
the ``model type'' vehicle grouping as defined in 40 CFR 600.002-93.

[GRAPHIC] [TIFF OMITTED] TR27DE06.018

    Likewise, the highway fuel economy value will be calculated as
follows:
[GRAPHIC] [TIFF OMITTED] TR27DE06.019

Where:

HFET FE = fuel economy in mile per gallon over the HFET test. This
value is normally a sales-weighted average of the vehicle models
included in the ``model type'' vehicle grouping as defined in 40 CFR
600.002-93.

[GRAPHIC] [TIFF OMITTED] TR27DE06.020

    These equations differ from those that we proposed in two ways.
First, as described above, we have modified the 5-cycle fuel economy
formulae slightly based on additional information received since the
proposal. Second, we have added 192 additional vehicles to our 5-cycle
fuel economy database. The mpg-based equations developed for the
proposal were based on 5-cycle fuel economy estimates for 423 2003 to
2005 model year vehicles, whereas the mpg-based equations shown above
were based on 5-cycle fuel economy estimates for 615 2003 to 2006 model
year vehicles. The net effect of these two changes is that the city and
highway fuel economy adjustments to the FTP and HFET fuel economy
values are a few percent smaller than those based on the proposed mpg-
based equations.
    As mentioned above, the mpg-based equations were developed from the
5-cycle fuel economy estimates for 615 2003-2006 model year vehicles.
In order to keep the mpg-based equations up-to-date and reflecting
changes in vehicle technology, EPA will update these equations
periodically using the same methodology, but no more frequently than on
an annual basis. We will update the mpg-based equations periodically,
especially if we determine that doing so would significantly change the
label results, using all of the available 5-cycle fuel economy
estimates for the previous three or more model years. These revised
mpg-based equations will be issued through the publication of an EPA
guidance document. The final regulations contain the equations that are
applicable to 2008 model year vehicles, as well as the components of
the equations to be utilized for future model year vehicles.
    We plan to update the mpg-based curves periodically using all of
the available 5-cycle fuel economy estimates for the previous three or
more model years. We proposed that these revised mpg-based equations
would be issued through the publication of an EPA guidance document
which would be released by January 1 of the calendar year prior to the
model year to which the equations first apply. We suggested in the
proposal that this meant, for example, that mpg equations for the 2012
year would be published prior to January 1 of 2011. However, we now
recognize that the model year for many manufacturers can begin almost a
full year before the start of the identically-named calendar year
(i.e., the 2012 model year can begin on January 2, 2011). Manufacturers
commented that issuing guidance applicable to a given model year
potentially mere days or weeks from the start of that model year for
some vehicle lines did not provide adequate lead time. We agree, and we
are finalizing regulations that require EPA to issue guidance regarding
revisions to the equations by no later than July 1 of the calendar year
prior to the earliest start of the model year that starts in the
following calendar year. In other words, for new equations to be
applicable to the 2010 model year (which can begin as early as January
2, 2009), EPA must issue guidance prior to July 1, 2008.

C. Effect of the New Methods on Fuel Economy Label Values

    The impact of the new methodology on city and highway fuel economy
label values was assessed using the same database of 615 recent model
year vehicles used to develop the mpg-based adjustments discussed
above. It is important to realize that these are projections based on
historical data, and that the actual impacts on fuel economy label
values will be dependent upon how a given vehicle performs over the
specific tests. Figures II-3 and II-4 show, for city and highway fuel
economy, respectively, how the label values would change under the 5-
cycle

method for each vehicle in the 615-vehicle database. Figures II-5 and
II-6 show, for city and highway fuel economy, respectively, the
distributions of the percent change in label values relative to the
current labels. More than 90 percent of the vehicles would have new
city label values that are from 8 to 15 percent lower than their
current label values. Figure II-3 also shows that the new city label
values for most hybrid vehicles will be between 20 and 30 percent lower
than today's city label values. Figure II-4 shows that about 90 percent
of the vehicles in the database, including most hybrids, would have new
highway label estimates that are from 5 to 15 percent lower than
today's current highway estimates. Under the current method all
vehicles would receive the same adjustment to account for the variety
of factors now accounted for by the new methodology. Under the 5-cycle
method vehicles receive differing ``adjustments'' relative to the
current label values based on each vehicle's response to the five
tests. Table II-1 presents the average results of this comparison for
all 615 vehicles, as well as various sub-sets of vehicles.
[GRAPHIC] [TIFF OMITTED] TR27DE06.021

[GRAPHIC] [TIFF OMITTED] TR27DE06.022

[GRAPHIC] [TIFF OMITTED] TR27DE06.023

[GRAPHIC] [TIFF OMITTED] TR27DE06.024

                                     Table II-1.--Effect of 5-Cycle Formulae on City and Highway Fuel Economy Labels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     City                           Highway                         Combined*
                                                      --------------------------------------------------------------------------------------------------
                                                                              Percent                          Percent                          Percent
                                                        Current    5-Cycle     change    Current    5-Cycle     change    Current    5-Cycle     change
                                                         (mpg)      (mpg)    (percent)    (mpg)      (mpg)    (percent)    (mpg)      (mpg)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hybrids..............................................       42.7       33.0      -22.3       42.8       36.9      -12.9       42.6       35.0      -17.1
Diesel (1 vehicle)...................................       26.2       23.4      -10.7       35.3       32.0       -9.3       29.6       27.6       -6.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Conventional Vehicles
--------------------------------------------------------------------------------------------------------------------------------------------------------
12 Highest FE........................................       30.9       26.9      -12.9       36.6       34.0       -6.9       33.2       30.5       -8.0
12 Lowest FE.........................................       10.2        9.5       -6.9       14.8       14.8       -0.2       11.9       11.9        0.4
Average..............................................       18.6       16.5      -10.8       24.6       22.8       -7.4       20.9       19.6      -6.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Combined fuel economy for Current MPG is based on weighting of 55%/45% city/highway, respectively. Combined fuel economy for 5-cycle MPG is based on
  weighting of 43%/57% city/highway, respectively (discussed further in Chapter II.C of the Technical Support Document).

    As can be seen from Table II-1, use of the 5-cycle formulae will
reduce both current city and highway fuel economy label values. For
conventional vehicles, city and highway fuel economy values will be
reduced an average of 10.8 percent and 7.4 percent, respectively. The
reduction in city fuel economy label values for conventional vehicles
with higher than average fuel economy will be slightly higher than
average (-12.9%), while the reduction for conventional vehicles with
lower than average fuel economy will typically be slightly lower than
average (-6.9%). The reduction in highway fuel economy for conventional
vehicles varies less around the average in the same way that it does
for city fuel economy. Vehicles with higher than average fuel economy
will typically experience a reduction in the highway label value
similar to all conventional vehicles, while vehicles with lower than
average fuel economy at the other end of the spectrum will, on average,
see little to no change in their highway label value (or possibly a
modest increase in some cases). Again, this is explained by each
vehicle's fuel economy response to the new test cycles, and some
vehicles are more sensitive to the new test conditions than others.
    The impact on hybrid vehicles will be greater, averaging a 22.3
percent reduction for city fuel economy and 12.9 percent for highway
fuel economy.\29\ This greater impact occurs primarily because a number
of the fuel efficient aspects of hybrid vehicles produce their maximum
benefit under conditions akin to the FTP and HFET tests, and are
somewhat less beneficial during aggressive driving, colder ambient
temperatures and when the air conditioner is turned on. However, these
vehicles will still remain among the top fuel economy vehicles.
---------------------------------------------------------------------------

    \29\ The database of 615 vehicles includes 14 hybrid vehicles.
All the hybrid models available as of the 2006 model year are
represented in the database: Honda Insight, Honda Civic, Honda
Accord, Toyota Prius, Toyota Highlander/Lexus RX400h, Ford Escape/
Mercury Mariner, and Chevrolet Silverado/GMC Sierra pickup truck.
---------------------------------------------------------------------------

    There is one diesel vehicle in our 5-cycle fuel economy database.
The

impact of the 5-cycle formulae on this one diesel is very similar to
that for the average conventional, gasoline-fueled vehicle.
    The impact of the mpg-based formulae will be very similar on
average to those shown in Table II-1 above for conventional vehicles.
This is not surprising, since the mpg-based formulae are based
essentially on the average results of the 5-cycle formulae. However,
the mpg-based formulae will increase the city fuel economy of hybrid
vehicles slightly, as indicated in Table II-2. This occurs because
there are only 14 hybrid vehicles in the database, compared to 601
gasoline-fueled, conventional vehicles. The mpg-based regression of
city fuel economy, therefore, represents essentially the impact of the
5-cycle formulae on conventional vehicles, which is less than that for
hybrids. The mpg-based regression of highway fuel economy is
essentially the same for conventional and hybrid vehicles.

                Table II-2.--Effect of MPG-Based Formulae on Conventional and Hybrid Fuel Economy
----------------------------------------------------------------------------------------------------------------
                                                     City                                 Highway
----------------------------------------------------------------------------------------------------------------
                                                                Percent                                Percent
                                      Current     MPG-based      change      Current     MPG-based      change
                                       (mpg)        (mpg)      (percent)      (mpg)        (mpg)      (percent)
----------------------------------------------------------------------------------------------------------------
Conventional......................         18.6         16.5        -10.9         24.6         22.7         -7.8
Hybrids...........................         42.7         35.1        -16.7         42.8         38.4         -9.8
----------------------------------------------------------------------------------------------------------------

    Table II-3 summarizes the projected impact of the new methods (5-
cycle and mpg-based) relative to the current label values of the 615
vehicle database.

                          Table II-3.--Effect of New Methods on Fuel Economy Estimates
----------------------------------------------------------------------------------------------------------------
                                          City fuel economy estimate           Highway fuel economy estimate
----------------------------------------------------------------------------------------------------------------
                                      Current      5-Cycle     MPG- based    Current      5-Cycle     MPG- based
----------------------------------------------------------------------------------------------------------------
Conventional Vehicles:
    MPG...........................         18.6         16.5         16.5         24.6         22.8         22.7
    Percent Change................  ...........       -10.8%       -10.9%  ...........        -7.4%        -7.8%
Hybrid Vehicles:
    MPG...........................         42.7         32.4         35.1         42.8         36.7         38.4
    Percent Change................  ...........       -23.6%       -16.7%  ...........       -13.2%        -9.8%
----------------------------------------------------------------------------------------------------------------

    In addition to looking at the overall change in fuel economy
estimates for all vehicles in the database, we also focused on those
manufacturers responsible for the majority of sales in the U.S. This
approach may better reflect the changes likely to be seen by the
majority of consumers. In effect, Table II-3 above includes vehicles by
Aston Martin and Rolls-Royce in the percent change, and these vehicles
are weighted equally with cars made by GM, Ford, DaimlerChrysler, and
other top-selling manufacturers. According to Autodata Corporation, the
seven manufacturers with the greatest U.S. market share account for
more than 90 percent of U.S. sales. Table II-4 shows these
manufacturers, their 2005 U.S. market share, and the average percent
change in city and highway fuel economy estimates for each of these
manufacturers as represented in our database. As can be seen in the
table, the city mpg estimates for these manufacturers will drop by
about 12 percent on average relative to today's estimates, and highway
estimates will drop by about 8 percent on average. It is important to
note, however, that these estimates are not intended to represent or
include the entirety of a manufacturer's product line, and should not
be interpreted as such. These estimates are derived from our database
of 615 test vehicles for which data on all five emission and fuel
economy test procedures is available, and because of differing ways in
which manufacturers test their vehicles and submit data to EPA, the
database may not reflect the range of makes and models similarly across
manufacturers.\30\
---------------------------------------------------------------------------

    \30\ The database spreadsheet is available in the public docket
for review.

              Table II.-4.--Effect of New Methods on Fuel Economy Estimates for Major Manufacturers
----------------------------------------------------------------------------------------------------------------
                                                                                Average change  Average change
                                                                     2005 U.S.     in city fuel     in highway
                          Manufacturer                             market share       economy      fuel economy
                                                                    (percent)*       estimate        estimate
                                                                                (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
General Motors..................................................            25.9             -10             -11
Ford Motor Co...................................................            17.9             -12             -10
DaimlerChrysler.................................................            14.9             -10             -11
Toyota..........................................................            13.7             -11              -7
Honda...........................................................             8.9             -13              -7

Nissan..........................................................             6.1             -11              -7
Hyundai.........................................................             2.9             -13              -8
Average.........................................................  ..............             -12             -8
----------------------------------------------------------------------------------------------------------------
* Source: Autodata Corp., Woodcliff Lake, New Jersey.

D. Comparison to Other Onroad Fuel Economy Estimates

    In the proposal, we compared fuel economy label values based on the
current, mpg-based, and 5-cycle formulae to estimates of onroad fuel
economy developed by a number of organizations. In the short time since
the proposal, little new data has become available. Also, as described
above, we are finalizing only minor changes to the proposed mpg-based
and 5-cycle formulae. Thus, overall, the relative comparisons described
in the proposal remain largely unchanged. We describe these generally
below, and refer the reader to Chapter II of the Technical Support
Document for a detailed description of these comparisons.
    We begin with a comparison of 5-cycle fuel economy values with the
fleetwide fuel economy estimates developed by the Federal Highway
Administration (FHWA). There are several differences in these two
estimates. First, we do not have fuel economy data for all vehicles
sold over the past 20-30 years over all five test procedures.
Therefore, we cannot develop a 5-cycle fuel economy estimate for the
current onroad fleet directly. Instead, we compare 5-cycle fuel economy
values to the current label values for the vehicles for which we have
5-cycle fuel economy data, and then extrapolate this relationship to
the rest of the vehicle fleet. Also, the FHWA light truck class
includes vehicles above 8,500 pound GVWR. The fuel economy estimated
for this class therefore requires adjustment to be comparable to EPA's
light-duty truck class. We also make this comparison for cars and light
trucks combined, in order to avoid differences in the ways that FHWA
categorizes vehicles.
    Since the NPRM, FHWA has published onroad fuel economy estimates
for the 2004 vehicle fleet and updated their estimates for 2003. FHWA's
estimates of light truck fuel economy onroad are almost 20 percent
lower than their previous estimate for the 2002-2003 fleets. After
adjusting for the difference in light truck categories, FHWA data
indicate that combined car and light truck fuel economy averaged 19.7-
19.9 mpg during 2003 and 2004. Extrapolating the fuel economy label
estimates from the 615 vehicles in our certification database to the
entire fleet produces an average combined fuel economy of 19.9 mpg.
This close match-up is not surprising, given that the value of the
factor representing effects not simulated during the dynamometer tests
(e.g., wind, road grade, etc.) was set using the FHWA estimates of
onroad fuel economy.
    Next, several governmental and non-governmental organizations
perform their own fuel economy assessments. Of these, the American
Automobile Association (AAA) and Consumer Report have tested the
greatest number of vehicles. Oak Ridge National Laboratory (ORNL) has
recently begun a program where drivers can submit their own fuel
economy measurements via the Internet. Argonne National Laboratory
(ANL) has also been operating an extensive hybrid demonstration project
for a few years as part of DOE's Freedom Car project.
    Each of these estimates of onroad fuel economy has their relative
strengths and weaknesses. The strengths of the non-governmental
organization testing include the fact that the vehicles are tested on
actual roads, usually in traffic and under real environmental
conditions. The primary weaknesses of this testing are:
    (1) The driving patterns involved are not typically published, so
they may or may not be representative of average U.S. driving,
    (2) Vehicles are tested throughout the year, so some vehicles are
tested in hot weather and others in cold weather, and some under
moderate conditions, thus leading to results that are not comparable
across vehicles and that may not reflect average U.S. driving, and
    (3) In some cases, the actual test procedures used to measure the
volume of fuel consumed during the test are not described, leaving some
doubt as to their accuracy. Still, because of the public interest in
these estimates, we have compared them to our mpg-based and 5-cycle
label estimates.
    We updated our comparison of mpg-based and 5-cycle fuel economy
estimates to Consumer Report's fuel economy estimates for 2000-2005
model year vehicles which were also in our 5-cycle database. We were
also able to match 70 of these vehicles with those in our 5-cycle fuel
economy database.\31\ As in the NPRM, we focused on Consumer Report's
combined fuel economy, which is a harmonic average of its fuel economy
measurements for city driving, highway driving, and a 150-mile trip. On
average, the mpg-based combined fuel economy values are 3 percent
higher than those of Consumer Report, while the 5-cycle fuel economy
values are 2% higher than those of Consumer Report. Thus, there is an
excellent match between the composite mpg-based fuel economy and the
Consumer Report combined fuel economy.
---------------------------------------------------------------------------

    \31\ In the NPRM, we identified 151 vehicles which were both
tested by Consumer Reports and in our certification database.
However, many of these matching vehicles were not from the same
model year.

             Table II-5.--Consumer Reports and Current EPA and MPG-Based Fuel Economy: 303 Vehicles
----------------------------------------------------------------------------------------------------------------
                                                   Consumer       Current EPA label             MPG-based
                                                   reports   ---------------------------------------------------
                                                -------------              Difference*                Difference
                                                     MPG          MPG       (percent)       MPG       (percent)
----------------------------------------------------------------------------------------------------------------
City...........................................         14.2         20.4          -30         18.0          -21
Highway........................................         29.3         26.9            9         24.7           19
Combined.......................................         20.7         22.9           -9         21.2           -3
----------------------------------------------------------------------------------------------------------------

    Table II-6 presents the same comparisons, except that it includes
the 5-cycle estimates and only includes the 70 matched vehicles.

                                    Table II-6.--CR and Current EPA, 5-Cycle and MPG-Based Fuel Economy: 70 Vehicles
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Consumer       Current EPA label              5-cycle                  MPG-based
                                                                 reports   -----------------------------------------------------------------------------
                                                              -------------              Difference*                Difference                Difference
                                                                   MPG          MPG        (percent)      MPG       (percent)       MPG       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
City.........................................................         14.3         20.4          -30         18.0          -21         17.8          -20
Highway......................................................         29.3         26.4           11         24.3           21         24.1           22
Combined.....................................................         20.6         22.7           -9         21.0           -2         20.9           -2
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We also updated our comparison to onroad fuel economy as estimated
by AAA.\32\ We were able to match 61 out of the 163 vehicles from their
2004 report to vehicles in our 5-cycle certification database. This is
lower than the 98 models which we matched in the analysis described in
the NPRM due to the use of a more stringent criterion that the vehicles
match in terms of model year. As AAA only develops a single fuel
economy estimate for each vehicle (i.e., no separate city or highway
estimates), we compared their estimates to combined fuel economy values
using the mpg-based and 5-cycle formulae. On average, the mpg-based
combined fuel economy values exceeded those of AAA by 6.7%, while the
5-cycle fuel economy values exceeded those of AAA by 6.1%.
---------------------------------------------------------------------------

    \32\ AAA Auto Guide: 2004 New Cars and Trucks. AAA Publishing,
2004.
---------------------------------------------------------------------------

    We obtained a recent compilation of consumer's onroad fuel economy
estimates which have been submitted to the Oak Ridge National
Laboratory's ``Your MPG'' database. Unlike Consumer Report and AAA,
drivers submit their own estimates of onroad fuel economy and city/
highway driving split to the YourMPG Web site. The strength of this
type of data is the fact that the vehicle is being operated by the
owner or regular driver in typical use. The weaknesses are the unknown
representativeness of the sample, the unknown nature of the technique
used by the owner/driver to measure fuel economy and the unknown time
period over which fuel economy is generally assessed (e.g., a couple of
tanks full or the past year). The database now contains 8180 estimates
of fuel economy for 4192 vehicles, compared to 2544 estimates of fuel
economy for 1794 vehicles at the time of the NPRM. The database does
not provide sufficiently precise vehicle descriptions to match vehicles
to those in our 5-cycle database. Thus, we limit our comparison to the
mpg-based method. We combined the mpg-based city and highway label
values using each driver's estimate of the percentage of their driving
that was in city or highway conditions. If a driver did not provide an
estimate of the breakdown of their driving pattern, we assumed that
their driving was 43 percent city and 57 percent highway in terms of
miles driven (not time driven).
    Diesels appear to perform better onroad than gasoline vehicles
compared to their current or mpg-based label values. Onroad fuel
economy by diesels in the YourMPG database exceeded the current label
combined label values by 4.3 percent. In contrast, conventional
gasoline vehicles fell short of their current combined label values by
1.4 percent.

                      Table II-7. --YourMPG Versus Current and MPG-Based Label Fuel Economy
----------------------------------------------------------------------------------------------------------------
                                     Number of                  Current     Difference   MPG-based    Difference
           Vehicle type              estimates     YourMPG       label      (percent)      label      (percent)
----------------------------------------------------------------------------------------------------------------
Conventional gasoline.............         7330         23.8         24.1         -1.4         21.7          9.1
High MPG Conventional Gasoline*...          680         35.1         35.8         -1.7         31.6         11.2
Hybrid Gasoline...................          520         43.2         47.1         -8.2         40.5          6.3
Diesel............................          221         41.8         40.1          4.3         35.3        18.3
----------------------------------------------------------------------------------------------------------------
* Combined EPA Label fuel economy value of 32 mpg or greater, representing about the top 10% fuel economy
  conventional vehicles.

    We also performed similar comparisons of EPA label and various
onroad fuel economy estimates focusing specifically on hybrids and high
fuel economy conventional vehicles. In the NPRM, we did this analysis
for hybrids. However, we received some comments that highlighting the
impact on hybrid vehicles specifically was misleading. The reason given
was that, if hybrids performed differently on the road compared to
their label values, it was

due to their relatively high fuel economy and not because of their
hybrid technology. However, we found that the relationship between mpg-
based and 5-cycle label values and the onroad fuel economy estimates
for conventional vehicles with relatively high fuel economy is
consistently more similar to that of lower fuel economy conventional
vehicles than to hybrids.
    There is a significant degree of scatter in the various estimates
of onroad hybrid fuel economy. Those from DOE's FreedomCar program,
Consumer Report and Edmunds \33\ tend to be much lower than those from
YourMPG and AAA. EPA's Kansas City data, although not representative of
the entire country, tends to fall in between these other two sets of
onroad hybrid estimates. The 5-cycle combined label values tend to be
in line with the lower set of estimates. The mpg-based label values
tend to be somewhat higher than the lower set of estimates, but well
below those of YourMPG and AAA. As described in the NPRM, the fuel
economy of hybrids is more sensitive to driving patterns and ambient
conditions than conventional vehicles. The scatter in the various
onroad fuel economy estimates for hybrids likely reflects this fact, as
each estimate is based on a unique set of driving activity and ambient
conditions.
---------------------------------------------------------------------------

    \33\ See http://www.edmunds.com.

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

    Overall, the mpg-based and 5-cycle fuel economy label values
compare favorably with estimates of onroad fuel economy made by other
organizations. However, lack of detailed knowledge of the driving
conditions and test procedures behind many of the latter estimates
prevents systematic comparisons, especially involving individual
weighting factors in the 5-cycle formulae.

E. Implementation of the New Fuel Economy Methods

1. 5-Cycle Vehicle Selection Criteria for 2011 and Later Model Years
    In addition to finalizing the mpg-based adjustments for the 2008-
2010 model years, as mentioned above, we are finalizing as proposed
selection criteria for the continued use of this method for 2011 and
later model years. These criteria will indicate for a given vehicle
test group whether the full 5-cycle testing would result in
significantly different fuel economy label values than the mpg-based
approach. If not, then those vehicles could use the mpg-based method
rather than the 5-cycle method. This approach is designed to avoid
additional test burden where the fuel economy label values would not be
significantly different under the 5-cycle method.
    Each year, manufacturers must demonstrate compliance with federal
emission standards by performing tests over all five test procedures.
The vehicles on which these tests are performed are known as ``emission
data vehicles'', which are selected to represent the ``worst-case''
emitting vehicle in a group of vehicles, known as a ``test group'',
which share common engine and emission control designs.\34\ EPA issues
certificates of emission conformity for each test group of vehicles in
each model year. Thus, for each test group, there exists a set of
official certification test data from all five test cycles--FTP, HFET,
US06, SC03 and Cold FTP. The fuel economy measured from these official
certification tests can be inserted into the 5-cycle city and highway
formulae to determine city and highway fuel economy values. Since FTP
and HFET testing is included in the official certification data, the
mpg-based city and highway fuel economy values can also be determined.
Thus, for each emission data vehicle, the 5-cycle city and highway fuel
economy values then can be compared to the mpg-based city and highway
fuel economy values. We believe that it is reasonable to allow
continued use of the mpg-based line when the available 5-cycle fuel
economy data (from emissions certification) indicates that the mpg-
based fuel economy determined from the official FTP and HFET tests
performed for the test group are similar enough to the 5-cycle fuel
economy determined from the official FTP, HFET, US06, SC03 and Cold FTP
tests for that same test group. In that case, the manufacturer can use
the mpg-based method for all model types covered under the EPA
certificate of conformity that is represented by the 5-cycle data
submitted to represent those vehicles. The manufacturer will not need
to conduct 5-cycle testing for fuel economy labeling for these model
types.
---------------------------------------------------------------------------

    \34\ The ``emission data vehicle'' is the test vehicle chosen to
represent a ``test group'' for emission certification purposes. A
``test group'' is made up of vehicles that share common combustion
cycle, engine type, fuel type, fuel metering system, catalyst
construction and precious metal content, engine displacement, number
and arrangement of cylinders, and emission standards. The emission
data vehicle is required to be the vehicle within the test group
that is expected to be worst-case for exhaust emissions. In general
the criteria that cause the emission data vehicle to be worst-case
for emissions will also cause it to be worst-case for fuel economy
(e.g., it will be the heaviest vehicle in the test group, with an
automatic transmission, four-wheel drive, etc.). In general, the
FTP, HFET, US06 and SC03 are performed on the emission data vehicle
to demonstrate that the test group complies with the federal
emission standards. The Cold FTP is performed on the worst-case
vehicle within a durability group, which represents a larger group
of vehicles, including those covered in the test group.
---------------------------------------------------------------------------

    To accomplish this, we defined the lower bound of a tolerance band
around the mpg-based line as the criteria for whether the mpg-based
line could be used or whether 5-cycle testing would be required for
further vehicle models within a test group. As proposed, we are
finalizing four and five percent as the tolerance bands for the city
and highway mpg lines, respectively. Mathematically, the tolerance line
is defined by Y x mpg-based fuel economy, where Y is 0.96 for city fuel
economy and 0.95 for highway fuel economy. In other words, if the 5-
cycle city fuel economy value is greater than or equal to 0.96 times
the mpg-based city fuel economy, all the vehicle model types covered
under the certificate of conformity for that test group are eligible to