The Association of Global Automakers, Inc. (Global Automakers) supports the goals of the National Program to reduce greenhouse gas (GHG) emissions and fuel use while ensuring customers have a wide choice of affordable vehicles that meet their needs. On September 26, 2016, Global Automakers submitted comments on the joint Environmental Protection Agency’s (EPA), National Highway Traffic Safety Administration’s (NHTSA), and California Air Resources Board’s (CARB) Draft Technical Assessment Report (TAR), released in July 2016, which addresses the assumptions underlying the model year (MY) 2022-2025 GHG and fuel economy standards. In short, these comments address the following based on our initial analysis of the TAR.
Customers today can choose from an unprecedented range of fuel-efficient vehicles and technologies when they shop for a new car or truck, but policymakers, and manufacturers, continue to face challenges in getting deeper and broader market embrace of fuel efficiency, and therefore in meeting future regulatory requirements.
The GHG and Corporate Average Fuel Economy (CAFE) standards—commonly referred to as “One National Program” or “National Program”—that were finalized in 2012 require dramatic improvements in motor vehicle fuel economy and GHG emissions, particularly in MY 2022-2025. A midterm evaluation was included in the regulations to provide policymakers, manufacturers and other stakeholders with an opportunity to evaluate assumptions and predictions about how technology and the motor vehicle market would develop more than ten years into the future in light of subsequent real-world experience. The Draft Technical Assessment Report (TAR) represents a pivotal step in the midterm evaluation, as it will provide the foundation for the policy decisions with respect to the MY 2022-2025 vehicle standards. Those final agency actions will greatly affect the vehicles that automakers will produce—and car buyers will purchase—for decades to come. It is therefore crucial that the TAR be the result of a robust, objective and data-driven process, and that the EPA and NHTSA give due consideration to all of the factors and underlying assumptions upon which the harmonized programs are based.
The TAR makes a substantial contribution to the ongoing discussion on how we can achieve these goals. However, the agencies’ models continue to be overly optimistic about the capabilities and costs of the technologies required to achieve the targets, and, as a result, additional technologies will be required. This will have a dual impact on the customer, in terms of both the prices of new motor vehicles and the driving and ownership experience. Any assessment of the feasibility of MY 2022-2025 standards must ensure that automakers will be able to continue providing customers with a full range of vehicles meeting all of their anticipated needs, and at prices they can afford. The standards must also continue to encourage and support innovation to ensure that future GHG reductions and fuel savings can be provided in the most cost-effective and forward-looking approach possible.
Four areas of importance must be addressed in the midterm evaluation: (a) Technology: whether the technologies discussed in the TAR will be sufficient for manufacturers to meet the standards, or whether additional technologies are likely necessary; (b) Customers: the extent to which customers will embrace and pay for technologies that have a greater impact on their driving experience; (c) Harmonization: whether improvements can be made to the regulatory program to reduce the “friction” caused by multiple inconsistent requirements; and (d) Incentives: how we can best ensure that the right tools are available for automakers to innovate and develop advanced vehicle systems to further reduce fuel consumption from the light duty fleet. These comments and the attachments hereto address these points.
Global Automakers and its members look forward to working further with the agencies to improve their technical analyses, harmonize the standards, ensure that innovations are quickly brought to market and educate customers about the benefits of fuel-economy technology. All of these efforts should bring us closer to achieving our shared policy goals.