Comments on:

Revisions and Additions to Motor Vehicle Fuel Economy Label Proposed Rule

National Highway Traffic Safety Administration and the Environmental Protection Agency

Docket No. NHTSA–2010-0087

Docket ID No. EPA–HQ–OAR–2009–0865

Submitted November 22, 2010

by the
International Council on Clean Transportation

For further information contact John German: John@theicct.org, 734-355-1055

These comments are submitted by the International Council on Clean Transportation

(hereafter, “ICCT”). The ICCT is made up of leading government officials and experts from
major countries and regions around the world that participate as individuals based on their
experience with air quality and transportation issues. The ICCT promotes best practices and
comprehensive solutions to improve vehicle emissions and efficiency, increase fuel quality and
sustainability of alternative fuels, reduce pollution from the in-use fleet, and curtail emissions of
local air pollutants and greenhouse gases (GHG) from international goods movement.

Overall

ICCT appreciates the extensive work done by the agencies to improve the labeling system and
encourage customers to use the numbers. We only have a few suggestions and comments.

Our primary suggestion is to use the same 5-cycle label adjustment requirements for electric
vehicles as is currently used for conventional vehicles. Range is an extremely important factor in
consumer purchase decisions for electric vehicles and there are sound reasons why in-use
adjustments are larger for low consumption vehicles in general. Electric vehicles also require
additional energy consumption to heat the cabin during cold weather operation.

Other suggestions are to avoid rating cars and trucks separately, add gas-guzzler and other
incentive information to the label, use separate ratings for GHG and other pollutants, evaluate
recent European reports on label effectiveness, add a linear fuel consumption metric to the label,
require car-selling websites to include links to electronic labels, and not include air conditioning
credits for greenhouse gas emissions.

More detailed information on our comments is provided, below.

ICCT Comments
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1) Fuel Economy Label Information and Format

The proposed rulemaking proposes to add additional information to the label, as well as ratings
to help the reader interpret the information. The additional information is potentially useful, but
will it just serve to confuse most customers? Past efforts by the agencies have focused on trying
to simplify the label information, so that customers can more easily understand the label values
and what they mean. Overall, ICCT does not believe we have the expertise to know whether
customers will find the additional information useful or confusing. In general, our sense is to try
to keep the label as simple and easy to understand as possible, but additional information may be
useful. Our primary recommendation is that the agencies should invest in studies of consumer
response to different information and label formats, using expert contractors.

Some specific suggestions on a few issues are:

• The agencies should not “rate” cars separately from light trucks unless the system moves
to a footprint-based adjustment. Vehicles need to be rated either against all other
vehicles or against vehicles in the same class. Either approach can be useful to
customers. However, just rating cars and light trucks separately accomplishes neither. It
would also be misleading and confusing to customers comparing similar vehicles
classified separately as cars and light trucks, such as 2wd and 4wd SUVs.
• ICCT supports the agencies’ proposal to place the gas-guzzler tax information on the
label. The agencies should also consider including other incentive information, such as
the federal tax credits for hybrids and other advanced vehicles.
• ICCT believes that separate ratings for GHG and other pollutants are better than a single,
combined rating. We appreciate and support the agencies’ desire for simplicity, but in
this case we believe a single rating would be more confusing than useful. Consumers
would not be able to tell if the vehicle is efficient or is clean without referring to
additional information. Another concern is that a single rating could lead consumers to
believe there is no difference between GHG emissions and pollutants that directly affect
local air quality. Separate ratings would also facilitate the introduction of incentive
programs linked to emissions in the future. For example, Japan has a dual-ratting system
on their labels that determines the tax incentive amount for efficient and clean vehicles.
Finally, separate ratings would be consistent with the labeling program already
implemented in California.

There are two recent studies in Europe on consumer label effectiveness that should be considered
by the agencies in development of the final rule. One was a June 2010 study for the Low Carbon
ICCT Comments
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Fuel Partnership in the UK, “LowCVP Car Buyer Survey: Improved environmental information
for consumers”.1 The second was a 2010 report on behalf of the European Parliament, “Study on
consumer information on fuel economy and CO2 emissions of new passenger cars”.2 While ICCT
does not endorse the specific findings and the situation in the U.S. may be different than in
Europe, the reports contain useful information. For example, the studies show that a color-coded
label more easily draws attention of customers and tends to have more of an impact on purchase
decisions than a black and white label. The studies also found that it is important to limit the
number of grades and regularly adjust the requirements for each grade.

2) Downward 5-Cycle Adjustment for BEVs and PHEVs

The more important aspect of the proposed rule is that plug-in hybrid electric vehicles (PHEVs)
and battery electric vehicles (BEVs) will be included in the labeling system for the first time. It is
extremely important that this be done properly, even more important than the fuel economy
adjustments for conventional vehicles. This is because range is one of the primary considerations
for customers considering PHEV and BEV purchases and is more important than the fuel
economy ratings for conventional vehicle purchasers. If the label does not properly reflect real-
world range, this will lead to customer dissatisfaction both with the vehicle and with the fuel
economy labeling system.

Range is also an important input into the California ZEV mandate and, for PHEVs, into the
CAFE standards. Longer-range vehicles will generate more credits under the ZEV mandate and
the range determines the proportion of electric driving for determining overall CAFE ratings for
PHEVs. While these programs currently use the range calculated from the test results, it would
be more accurate to base the calculations on the real-world range. If this improvement were
made to either or both of these programs in the future, it would make it even more important to
have realistic real-world range adjustments.

Instead of emphasizing the importance of the label adjustments for PHEVs and BEVs, less
accurate provisions were proposed. Conventional vehicles are required to conduct 5-cycle
testing and may only use the MPG-based equations if the 5-cycle testing falls within certain
criteria. PHEVs and BEVs are granted two additional options. One is to provide vehicle-specific
real world range data collected from in-use vehicles. The second is to use the MPG-based

1
http://www.lowcvp.org.uk/assets/reports/LowCVP-Car-Buyer-Survey-2010-Final-Report-03-
06-10-vFINAL.pdf
2
http://www.europarl.europa.eu/activities/committees/studies/download.do?language=fr&file=31
259
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equations without validation from 5-cycle testing. Worse, the MPG-based equation would be
capped at a 30% adjustment for the FTP, again without any validation from 5-cycle testing.

Given the importance of the real-world range, the exemption from 5-cycle testing is inexplicable.
The cost of conducting 5-cycle testing is small compared to the need for accurate range
calculations. In addition, both the exemption from 5-cycle testing and the cap on the MPG-based
adjustment are inappropriate for PHEVs and BEVs, for three reasons:

(1) Most loads not captured on the FTP and highway tests are relatively constant across a range
of vehicles:
• Aerodynamic loads go up with vehicle speed on all vehicles
• Aggressive driving is not difficult for high-power vehicles and has a larger impact on
lower-performance, higher efficiency vehicles
• Cold temperatures generate higher engine friction, higher air density, more fuel
enrichment, longer engine warmup times, and defroster use
• The initial cooling requirements for air conditioning are similar across all vehicles
• Short trips increase the relative amount of fuel used for engine warmup and A/C cooldown

These relatively constant off-cycle loads mean that the lower the baseline fuel consumption, the
larger the percentage impact on in-use fuel economy. The shape of the MPG-based equation
simply reflects this reality and generates larger adjustments for lower fuel consumption vehicles.
It has nothing to do with the technology on the vehicle, just the nature of vehicle and accessory
loads.

(2) There is good reason to believe that the off-cycle loads will be much larger on BEVs than on
conventional vehicles with the same fuel consumption. This is because of cabin heating at cold
ambient temperatures. On vehicles with internal combustion engines, the cabin is heated using
waste heat from the engine that is otherwise lost to the cooling system. No additional energy is
used to provide cabin heat, beyond that needed to run the fan inside the cabin. This situation does
not exist for BEVs, which will need to supply power from the battery pack to heat the cabin.
There are ways to mitigate the energy used to heat the cabin, but unless BEVs are required to
conduct 5-cycle testing the label values – and range – will not reflect such strategies.

(3) All testing is conducted with almost new batteries. However, there is normal degradation in
battery energy capacity over time. This will reduce the range of the vehicle over time, which is
not captured in the fuel economy testing. The proper solution is to require 5-cycle testing with
batteries representative of 5-year old batteries. While ICCT understands that testing with 5-year
old batteries would be very difficult and may not be feasible, it is important that the
overstatement of range at least is limited to this factor and is not multiplied by further range
overstatements.

Given the solid reasons why labeling shortfall increases as baseline fuel consumption goes down
and the high value associated with the range calculation, PHEVs and BEVs should be treated
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identically to conventional vehicles and should not be given additional options to comply,
especially the options to use the MPG-based equation without validation with 5-cycle testing and
capping the adjustment on the MPG-based equation.

The proposed option for allowing adjustments based on vehicle-specific real world range data
collected from in-use vehicles is reasonable in concept. However, it would be unfair to allow it
only for PHEVs and BEVs. More importantly, it is very difficult to collect data that properly
represents year-around operation throughout the nation. Any provision to allow real-world data
collection should be promulgated through rulemaking, in order to allow for comments and
consideration of the many difficult issues in designing such a program.

3) Fuel Consumption

ICCT supports the inclusion of a fuel consumption metric on the label. The distortion with MPG
will only get worse as vehicle fuel economy improves, potentially confusing customers and
leading them to make less than optimum purchase decisions. While it is not feasible to move
away from MPG today, including fuel consumption on the label will help some customers
understand the real difference between vehicles. More importantly, it will start the process of
familiarizing customers with a linear metric, with the eventual goal of replacing MPG.

A fuel consumption metric will also make it easier for consumers to calculate their individual
fuel costs. Few customers use the annual fuel cost estimate currently on the label because their
actual mileage and fuel cost can be very different from the estimates embedded in the annual fuel
cost. A fuel consumption metric would allow consumers to easily use customized mileage and
fuel price assumptions.

Canada started including a linear metric (liters per 100 km) about 25 years ago, so there is a
successful precedent. ICCT urges EPA to include a fuel consumption metric.

4) Website Links to Electronic Labels

The new vehicle purchase process is very different that it was when fuel economy labels were
first implemented more than three decades ago. Many potential buyers conduct research and
compare vehicle features, including fuel economy, through commercial websites, such as
Edmunds.com. Thus, in many cases they will have made their initial purchase decisions before
they see the labels at the dealership.
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It is necessary to change with the times and require websites designed to help sell vehicles to
include electronic label images, or prominent links to such images, as part of the broader
information shown for each model. In China, a website established by the Ministry of Industry
and Information Technology to provide buyer fuel consumption information already includes
electronic labels with broader information for each model. Electronic labels will be increasingly
important in the future and provisions should be implemented as quickly as possible.

5) Air Conditioning Credits for Greenhouse Gas Emissions

Greenhouse gas credits should not be include on the label for air conditioning. Air conditioning
systems will move to systems with virtually no greenhouse gas emissions in the next 3 to 7 years,
so the credits will become meaningless in a short period of time. Further, the contribution of air
conditioning to overall greenhouse gas emissions is much smaller than the greenhouse gas
emissions from production and disposal of the vehicle, which are also not included.