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7 - 1 

# Chapter 7: **Ve hicle**  **- Related**  **Costs, Fuel Savings &**

**Maintenance Costs** Inthis chapter, the agencies present our estimate s of the vehicle
- related costs associated with the proposed standards along with corresponding fuel savings and maintenance costs
. For this rule, the agencies conducted coordinated and complementary analys es using two analy tical methods for the heavy- duty pick up and van segment by employing both DOT’s CAFE model and EPA’s MOVES model. The agencies used EPA’s MOVES model to estimate fuel consumption and emissions impacts for tractor
-trailers (including the engine that powers the tractor), and vocational vehicles (including the engine that powers the vehicle). Additional calculations were performed to determine corresponding monetized program costs and benefits. For heavy- duty pickups and vans, the agencies performed complementary analyses, which we refer to as “Method A” and “Method B”. In Method A, the CAFE model was used to project a pathway the industry

could use to comply

with each regulatory

alternative and the estimated effects on fuel consumption, emissions, benefits and costs. In Method B, the CAFE model was used to project a pathway the industry could use to comply

with each regulatory

alternative, along with resultant impacts on per vehicle costs, and the MOVES model was used to calculate corresponding changes in total fuel consumption and annual emissions. Additional calculations were performed to determine corresponding monetized program costs and benefits. NHTSA considered Method A as its central analys is and Method B as a supplemental analysis. EPA considered the results of both methods. The agencies concluded that both methods led the agencies to the same conclusions and the same selection of the proposed standards. Throughout this Chapter and in later chapters presenting program
-related costs and benefits, engine costs are included along with vehicle
-related costs. 

## 7.1 **Vehicle Costs, Fuel Savings and Maintenance Co sts vs. the Dynamic**  **Baseline and Using Method A** The agencies joint analys is of the potential costs of the proposed standards combines DOT CAFE model calculations of HD pickup and van costs with EPA MOVES modeling of vocational vehicle, tractor and trailer fuel consumption along with EPA analysis of vocational vehicle, tractor and trailer costs. The analysis includes costs for fuel
- saving technology that manufacturers could add in response to the proposed standards, EPA estimates of the additional complianc e and R&D costs for vocational vehicles and combination tractor trailers, and some additional maintenance costs. 

## 7.1.1 **Vehicle Program Costs** In this section, the agencies present our estimate of the vehicle
- -related costs associated with the proposed program versus Alternative 1b using the CAFE model analysis of HD pickups and vans. The presentation here summarizes the costs associated with new technology the agencies estimate manufacturers could add to meet the proposed GHG and fuel consumption standards. The analys is summarized here provides our estimate of incremental costs on a per vehicle basis and on a MY lifetime basis. In Chapter 7.2 , where the agencies present the Method B analys is, the analogous information is presented along with costs on an annual, or calendar

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7 - 2 ye ar, basis for all segments. For details behind the cost estimates associated with individual technologies, the reader is directed to Sections III through VI of the proposed preamble and to Chapter 2 of the draft RIA. Note that all discounted costs presented in this chapter, whether in the Calendar Year (or annual) analysis or the Model Year Li fetime analysis, are discounted back to 2015 at the disc ount rate shown in the table(s). 

## 7.1.1.1 Technology

Costs For the HD pickup trucks and vans, the agencies have used a methodology consistent with that used for our recent 2017
- 2025 light
- duty joint rulemaking since most of the technologies expected for HD pickup trucks and vans are consistent with those expected for the larger light
- duty trucks. The cost estimates presented in the recent light
- duty joint rulemaking were then scaled upward to account for the larger weight, towing capacity, and work demands of the trucks in these heavier classes. For details on that scaling process and the resultant costs for individual technologies, the reader is directed to Chapter 2.6 and 2.12 of this draft RIA. Note also that all cost estimates have been updated to 2012 dollars for this analysis while the 2017
- 2025 light
- duty

joint rulemaking was presented in 2010 dollars. 1 

### For vocational vehicles, tractors and trailers, consistent with the Phase 1 rule, the agencies have estimated costs using a different methodology than that employed in the recent light
- duty joint rulemaking establishing fuel economy and GHG standards. In the recent light
duty joint rulemaking, all fixed costs were included in the hardware costs via an indirect cost multiplier. As such, the hardware costs presented in that analys is included both the actual hardware and the associated fixed costs. For the vocational, tractor and trailer segments in this analys is, some of the fixed costs are estimated separatel y and are presented separately from the technology costs. As noted above, all costs are presented in 2012 dollars. The estimates of vehicle costs are generated relative to two unique “no action” baselines. The first of these (alternative 1a, presented below in Chapter 7.2 ) representing generally flat fuel consumption improvements, or a fleet of vehicles meeting the Phase 1 heavy
- duty requirements. The second of these (alternative 1b and presented here) representing dynamic fuel consumption improvements, or a fleet of vehi cles with improving fuel consumption despite the lack of regulatory

drivers. See Section X of the preamble and Chapter 11 of this draft RIA for more detail on these two baselines. As such, costs to comply with the Phase 1 standards are not included in the estimates here. In fact, in the methodology used for vocational vehicles, tractors and trailers, there are cases where Phase 1 technologies are being removed in favor of Phase 2 technologies

– that is, the technology basis for the Phase 2 proposed standards involves removing certain of the Phase 1 technologies. In those cases, savings are associated with the removal of the Phase 1 technology . The details of which technologies and where such savings occur are presented in Chapter 2.12 of the draft RIA.

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7 - 3 For HD pickups and vans, as described in Chapter 2 of this draft RIA, the agencies used NHTSA’s CAFE model to estimate the cost per vehicle associated with the proposed (and possible alternative) standards. A 

### That model has the capability to look ahead at future standards when making determinations of how vehicles should be changed to comply
. Itdoes this because redesign cycles do not always line up well with regulatory implementation schedules, so a manufacturer may

choose to redesign a vehicle in MY20 18 in preparation for upcoming MY2021
- 2025 standards if that particular vehicle is not scheduled for another redesign until, say, MY2026. The result being new technology costs in years prior to implementation of the standards. The CAFE model’s output would show such costs occurring in years prior to MY2021. On the other hand, the CAFE model also estimates the potential that credits generated in earlier model ye ars might be carried forward (i.e., “banked”) and then used in later model ye ars, potentially reducing costs in some model years covered b y the analys is. Table 7 - 1 presents the average incremental technology costs per vehicle for the proposed pro gram relative to alternative 1b. These tables include both engine and vehicle technologies
. For HD pickups and vans , costs begin with new standards in MY2018, as technology is utilized in vehicles with early redesign cycles. The costs jump in MY2021 as more complex technologies are utilized, then generally increase through the remainder of the anal ys is period. For vocational vehicles, the costs begin in MY2021, then decrease slightly through MY2023, with an increase in MY2024, decreasing slightly through MY2026, and followed by a large increase in costs from MY2027 until the end of the analys is period. For tractor/trailers, the costs begin in MY2018 as trailers begin adding new technology to meet the 2018 trailer standards. Costs then increase in MY2021 as the tractor standards begin through 2027. After 2027, costs begin to decrease due to learning effects. All costs shown in the table represent the weighted average cost of all vehicles within the category shown in the heading.

A The CAFE model also provides a full benefit
- cost analysis associated with proposed standards, and the agencies have used this analysis as part of Method A to provide estimates of the costs and benefits of today’s proposed standards. The full benefit
- cost analysis for Method A is presented in Chapters 9 and 10 of this draft RIA. The full benefit
- cost analysis for Method B is presented in Chapter 8 of this draft RIA.

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7 - 4 **Table 7**  **- 1**  **Estim ated**  **Technology Cost**  **s per**  **Vehicle for the Preferred Alternative versus the Dynamic Baseline**  **and using Method A (20**  **12$ )**  a MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS 2018 $98 $0 $639 2019 $92 $0 $548 2020 $95 $0 $478 2021 $493 $1,152 $7,445 2022 $485 $1,128 $7,273 2023 $766 $1,037 $6,790 2024 $896 $1,766 $10,690 2025 $1,149 $1,731 $10,476 2026 $1,248 $1,695 $10,206 2027 $1,366 $3,381 $12,487 2028 $1,356 $3,323 $12,292 2029 $1,357 $3,271 $12,178 2030 $1,348 $3,222 $12,070 2050 $1,348 $3,232 $11,981 Note : a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 As noted in the text, MYs 2018
- 2020 include costs for trailers only, and in MYs 2021 and later the costs include both tractor and trailer costs. Detailed technology and package costs for all segments can be found in Chapter 2 of this draft RIA (notably, see Sections 2.12 and 2.13). 

### Table 7 - 2 presents the model year lifetime costs for new technology discounted at 3 percent using M ethod A
. And Table 7 - 3 presents the model year lifetime costs for new technology

discounted at 7 percent using Method A
.

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7 - 5 **Table 7**  **- 2**  **Discounted MY Lifetim e**  **New Technology Costs of the**  **Preferred Alternative**

**Vs. the Dynamic Baseline and using Method A (** **3% Discount Rate, $M**  **illions of 2012$) a**  MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $61 $0 $104 $165 2019 $55 $0 $99 $154 2020 $55 $0 $95 $150 2021 $280 $488 $1,013 $1,781 2022 $269 $468 $976 $1,713 2023 $412 $421 $898 $1,731 2024 $479 $719 $1,412 $2,610 2025 $608 $705 $1,396 $2,709 2026 $654 $689 $1,369 $2,712 2027 $704 $1,363 $1,676 $3,743 2028 $688 $1,321 $1,642 $3,651 2029 $677 $1,279 $1,618 $3,574 Sum $4,942 $7,452 $12,299 $24,693 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 3**  **Discounted MY Lifetim e**  **New Technology Costs of the**  **Preferred Alternative**

**Vs. the Dynamic Baseline and using Method A (**  **7% Discount Rate, $M**  **illions of 2012$) a**  MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $54 $0 $91 $145 2019 $47 $0 $84 $131 2020 $46 $0 $77 $123 2021 $223 $381 $791 $1,395 2022 $206 $352 $734 $1,292 2023 $304 $305 $650 $1,259 2024 $340 $501 $984 $1,825 2025 $415 $473 $936 $1,824 2026 $430 $445 $884 $1,759 2027 $446 $847 $1,041 $2,334 2028 $419 $790 $982 $2,191 2029 $397 $736 $932 $2,065 Sum $3,327 $4,829 $8,186 $16,342 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 6 

## 7.1.1.2 Compliance Costs As noted above, some fixed costs were estimated separately from the hardware costs. As such, not all fixed costs are included in the tables presented in Section 7.1.1.1 . The agencies have estimated additional and/or new compliance costs associated with the proposed standards. Normally, compliance program costs would be considered part of the indirect costs and, therefore, would be accounted for via the markup applied to direct manufacturing costs. However, since the agencies are proposing new compliance elements that were not present during development of the indirect cost markups used in this analysis, additional compliance program costs are being accounted for via a separate “line
- item” here. Note that, for HD pickups and vans, compliance elements were present during development of the indirect cost markups used; as such, these costs are already included as part of the technology costs described above. There are three elements to the compliance costs estimated in this analysis. The first is for construction of new, or upgrades to existing, test facilities for conducting powertrain testing. The second co sts are for conducting the powertrain tests themselves. And the third is for reporting of compliance data to EPA and NHTSA. We estimated these latter costs in the Phase 1 rule as $0.24 million, $0.9 million and $1.1 million for HD pickups and vans, vocational and tractors, respectively, for a total of $2.3 million per year (2009$). 2 

### All of these are industry
wide, annual costs. We have estimated new reporting costs in this Phase 2 proposal associated with new powertrain testing within the vocational vehicle program, the increased level of reporting in the tractor program and an all new compliance program where none has existed to date within the trailer program. We have estimated those costs at $95,000 and $240,000 for vocational and tractor programs, and at $1.2 million in the trailer program, all in 2012$. All of these are industry
-wide, annual costs. For powertrain testing facility upgrades and construction, we have estimated that 6 manufacturers would upgrade and 5 would construct new facilities at an upgrade cost of $1.2 million and a new construction cost of $1.9 million, all in 2012$. The result being an industry
wide (but vocational program only) cost of $16.6 million (2012$). This cost would occur once which we have attributed to CY2021, what would be the first year of the Phase 2 vocational standards. B 

### Lastly, the vocational program is also estimated to incur costs associated with conducting powertrain testing. We have estimated the cost of testing at $69,000 per test and expect three large manufacturers to conduct 20 tests/year for a total of $4.1 million/year. C

B Note that, in alternative 2, we expect no manufacturers would conduct powertrain testing so none would construct or upgrade facilities. C Note that, in alternative 2, we expect no powertrain testing so no testing costs; in alternative 4, we expect 4 large manufacturers to conduct the testing for an annual cost of $5.5 million.

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7 - 7 Table 7 - 4 and Table 7 - 5 present the MY lifetime costs for new compliance program elements at 3 percent and 7 percent, respectively
.

**Table 7**  **- 4**  **Discounted MY Lifetim e**  **Compliance Costs of the**  **Preferred Alternative**

**Vs. The Dynamic Baseline and using Method A (** **3% Discount Rate, $M**  **illions of 2012$) a**  MODEL YEAR VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 2021 $13.7 $1.2 $14.9 2022 $3.4 $1.1 $4.5 2023 $3.3 $1.1 $4.4 2024 $3.2 $1.1 $4.3 2025 $3.1 $1.0 $4.1 2026 $3.0 $1.0 $4.0 2027 $2.9 $1.0 $3.9 2028 $2.8 $1.0 $3.8 2029 $2.8 $0.9 $3.7 Sum $38.3 $9.4 $47.7 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 8 **Table 7**  **- 5**  **Discounted MY Lifetim e**  **Compliance Costs of the**  **Preferred Alternative**

**Vs. The Dynamic Baseline and using Method A (**  **7% Discount Rate, $M**  **illions of 2012$) a**  MODEL YEAR VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 2021 $10.7 $0.9 $11.6 2022 $2.5 $0.9 $3.4 2023 $2.4 $0.8 $3.2 2024 $2.2 $0.7 $3.0 2025 $2.1 $0.7 $2.8 2026 $1.9 $0.7 $2.6 2027 $1.8 $0.6 $2.4 2028 $1.7 $0.6 $2.3 2029 $1.6 $0.5 $2.1 Sum $27.0 $6.4 $33.4 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 

## 7.1.1.3 Research & Development Costs Much like the compliance program costs described above, EPA has estimated additional engine, vocational vehicle and tractor R&D associated with the proposed standards that is not accounted for via the indirect cost markups used in this analysis for those segments
. The necessary R&D for HD pickups and vans is covered by the indirect costs included as part of the technology

costs described above. In the Phase 1 rule, the agencies estimated the engine R&D costs at $6. 8 million (2009$) per engine class per manufacturer per year for five ye ars. In this Phase 2 analys is, EPA has estimated this same level of R&D and has assumed 12 heavy-heavy and 12 medium
-heavy HD engine R&D programs would be conducted for a total of $214 million/year (2012$). In this analysis, EPA has assumed those costs would occur annually for 4 ye ars, MYs 2021
- 2024. The total being $857 million (2012$) over 4 years (by comparison, the Phase 1 rule estimated a total of $852 million (2009$) over 5 ye ars). To this, EPA has estimated an additional $6 million/year spent by vocational vehicle manufacturers and $20 million/year spent by tractor manufacturers. In the end, EPA is estimating a total of $961 million in R&D spending above and beyond the level included in the markups used to estimate indirect costs for these s egments. Under alternative 4, due to the accelerated implementation of technology, EPA has estimated even more R&D

—an additional $6.5 million per year or $26 million total spent by vocational vehicle and tractor manufacturers. Importantly, EPA estimates that these costs would occur during normal R&D and vehicle design cycles for both alternatives 3 and 4. EPA has not included any additional R&D would be spent b y trailer manufacturers since our cost estimates

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7 - 9 include R&D conducted by trailer parts suppliers which are subsequently included in the prices charged b y those suppliers to the trailer manufacturer. Additionally, the markups we have applied to cover indirect costs (see Chapter 2.12 of this draft RIA) include costs associated with R&D incurred b y the trailer manufacturer. Table 7 - 6 through Table 7 - 7 present the model ye ar li fetime R&D costs discounted at 3 percent and 7 percent, respectively
.

**Table 7**  **- 6**  **Discounted MY Lifetim e**  **R&D Costs of the**  **Preferred Alternative**

**Vs. The Dynamic Baseline and using Method A (** **3% Discount Rate, $M**  **illions of 2012$) a**  MODEL YEAR VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 2021 $93.4 $104.9 $198.3 2022 $90.6 $101.9 $192.5 2023 $88.0 $98.9 $186.9 2024 $85.4 $96.0 $181.5 2025 $0.0 $0.0 $0.0 2026 $0.0 $0.0 $0.0 2027 $0.0 $0.0 $0.0 2028 $0.0 $0.0 $0.0 2029 $0.0 $0.0 $0.0 Sum $357.5 $401.7 $759.2 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 10 **Table 7**  **- 7**  **Discounted MY Lifetim e**  **R&D Costs of the**  **Preferred Alternative**

**Vs. The Dynamic Baseline and using Method A (**  **7% Discount Rate, $M**  **illions of 2012$) a**  MODEL YEAR VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 2021 $72.9 $81.9 $154.9 2022 $68.1 $76.6 $144.7 2023 $63.7 $71.6 $135.3 2024 $59.5 $66.9 $126.4 2025 $0.0 $0.0 $0.0 2026 $0.0 $0.0 $0.0 2027 $0.0 $0.0 $0.0 2028 $0.0 $0.0 $0.0 2029 $0.0 $0.0 $0.0 Sum $264.3 $297.0 $561.3 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1


## 7.1.1.4 Summary of Vehicle
- Related Costs of the Proposed Program using Method A Table 7 - 8 presents the model year lifetime costs associated with the preferred alternative discounted at 3 percent relative to the dynamic base line and using Method A. Table 7 - 9 presents the model year lifetime costs associated with the preferred alternative discounted at 7 percent relative to the dynamic baseline and using Method A.

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7 - 11 **Table 7**  **- 8**  **Discounted MY Lifetim e**  **Vehicle -** **Related Costs of the**  **Preferred Alternative**

**Vs. The Dynamic Baseline and using Method A (** **3% Discount Rate, $M**  **illions of 2012$) a**  MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $61 $0 $104 $165 2019 $55 $0 $99 $154 2020 $55 $0 $95 $150 2021 $280 $595 $1,119 $1,994 2022 $269 $563 $1,079 $1,911 2023 $412 $512 $998 $1,922 2024 $479 $807 $1,509 $2,795 2025 $608 $708 $1,397 $2,713 2026 $654 $692 $1,370 $2,716 2027 $704 $1,366 $1,677 $3,747 2028 $688 $1,324 $1,643 $3,655 2029 $677 $1,282 $1,619 $3,578 Sum $4,942 $7,848 $12,710 $25,500 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 9**  **Discounted MY Lifetim e**  **Vehicle -** **Related Costs of the**  **Preferred Alternative**

**Vs. The Dynamic Baseline and using Method A (**  **7% Discount Rate, $M**  **illions of 2012$) a**  MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $54 $0 $91 $145 2019 $47 $0 $84 $131 2020 $46 $0 $77 $123 2021 $223 $465 $874 $1,562 2022 $206 $423 $811 $1,440 2023 $304 $371 $722 $1,397 2024 $340 $562 $1,051 $1,953 2025 $415 $475 $937 $1,827 2026 $430 $446 $885 $1,761 2027 $446 $849 $1,042 $2,337 2028 $419 $792 $983 $2,194 2029 $397 $738 $932 $2,067 Sum $3,327 $5,121 $8,489 $16,937 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 12 

## 7.1.2 **Changes in Fuel Consumption and Savings** 7.1.2.1 Changes in Fuel Consumption The proposed standards would result in significant improvements in the fuel efficiency of affected vehicles. Drivers of those vehicles would see corresponding savings associated with reduced fuel expenditures. The agencies have estimated the impacts on fuel consumption for the proposed standards. More detail behind these changes in fuel consumption is presented in Chapter 5 and Chapter 10 of this draft RIA. The expected impacts on fuel consumption are shown in Table 7 - 10 as reductions from the dy namic baseline reference case (i.e., positive values represent fewer gallons consumed) and using Method A. The gallons shown in this table include any increased consumption resulting from the rebound effect. **Table 7**  **- 10**  **MY Lifetim e**  **Fuel Consumption Reductions due to the Preferred Alternative**

**Vs. The Dynamic Baseline and using Method A**

**(M illion Gallons)**  **a** GASOLINE REDUCTIONS b DIESEL REDUCTIONS MODEL YEAR HD

PICKUPS & VANS VOC TRACTOR/

TRAILERS SUM HD

PICKUPS & VANS VOC TRACTOR/

TRAILERS SUM 2018 44 0 0 44 25 0 934 959 2019 41 0 0 41 20 0 870 890 2020 42 0 0 42 20 0 840 860 2021 172 54 0 226 136 340 4,091 4567 2022 173 54 0 227 136 340 4,057 4533 2023 265 54 0 319 246 340 3,958 4544 2024 306 127 0 433 283 705 6,289 7277 2025 678 130 0 808 309 722 6,330 7361 2026 782 133 0 915 315 738 6,359 7412 2027 884 297 0 1181 323 1,193 7,350 8866 2028 894 300 0 1194 326 1,210 7,417 8953 2029 910 303 0 1213 330 1,222 7,563 9115 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b Gasoline reductions include reductions in Ethanol85. 

## 7.1.2.2 Changes in Fuel Expenditures Using the fuel consumption reductions presented above , the agencies have calculate d the fuel expenditure changes associated with the proposed standards , subcategory by subcategory . To do this, reduced fuel consumption is multiplied in each ye ar b y the corresponding estimated average fuel price in that ye ar, using the reference case fuel prices from AEO 201 4 . For the Method A analys is, the AEO 2014 early release reference case was used for the vocational vehicles and tractor/trailers; the AEO 2014 final release reference case was used for HD pickups and vans. As the AEO fuel price projections go through 2040 and not beyond, fuel prices beyond 2040 were set equal to the 2040 values for vocational vehicles and tractor/trailers
. For the Method A

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7 - 13 HD pickups and vans, the retail price of gasoline was projected to rise at 0.2 percent per year for gasoline and 0.7 percent for diesel
. These e stimates do not account for the significant uncertainty in future fuel prices; the monetized fuel savings would be understated if actual fuel prices are higher (or overstated if fuel prices are lower) than estimated. The Annual Energy Outlook (AEO ) is a standard reference used by NHTSA and EPA and many other government agencies to estimate the projected price of fuel. This has been done using both the pre
-tax and post-tax fuel prices. Since the post
-tax fuel prices are the prices paid at fuel pumps, the fuel expenditure changes calculated using these prices represent the changes fuel purchasers would see. The pre
-tax fuel savings are those that society would see. Assuming no change in fuel tax rates, the difference between these two columns represents the reduction in fuel tax revenues that would be received b y state and federal governments
. The MY lifetime fuel savings for the preferred alternative relative to the dy namic baseline and using Method A are shown in Table 7 - 11 using a 3 percent discount rate and in Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 

### Table 7 - 12 using a 7 percent discount rate. Note that in Chapters 8 and 11 of this draft RIA , the overall benefits and costs of the rulemaking are presented and only the pre
-tax fuel expenditure impacts are presented there.

**Table 7**  **- 11**  **Discounted MY Lifetime Redu**  **ctions in Fuel Expenditures of the**  **Preferred Alternative Vs. The Dynamic Baseline and using Method A**  **( 3% Discount Rate,**  **Millions of 20 12$**  **) a**  REDUCED FUEL EXPENDI TURES

–

RETAIL REDUCED FUEL EXPENDI TURES

– UNTAXED MODEL YEAR HD

PICKUPS & VANS VOC TRACTO R/ TRAILER S SUM HD

PICKUPS & VANS VOC TRACTO R/ TRAILER S SUM 2018 $181 $0 $2,744 $2,925 $161 $0 $2,435 $2,596 2019 $157 $0 $2,515 $2,672 $140 $0 $2,238 $2,378 2020 $160 $0 $2,386 $2,547 $143 $0 $2,130 $2,273 2021 $794 $1,082 $11,422 $13,297 $711 $966 $10,222 $11,898 2022 $782 $1,064 $11,139 $12,984 $701 $952 $9,991 $11,645 2023 $1,281 $1,044 $10,675 $13,000 $1,151 $937 $9,596 $11,684 2024 $1,446 $2,156 $16,663 $20,264 $1,303 $1,937 $15,008 $18,248 2025 $2,294 $2,167 $16,460 $20,922 $2,066 $1,951 $14,855 $18,872 2026 $2,494 $2,172 $16,217 $20,883 $2,247 $1,959 $14,663 $18,870 2027 $2,686 $3,617 $18,381 $24,684 $2,423 $3,267 $16,650 $22,340 2028 $2,664 $3,591 $18,164 $24,419 $2,407 $3,250 $16,482 $22,138 2029 $2,654 $3,555 $18,144 $24,352 $2,402 $3,222 $16,491 $22,115 Sum $17,592 $20,446 $144,911 $182,949 $15,854 $18,442 $130,760 $165,056 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 14 **Table 7**  **- 12**  **Discounted MY Lifetime Reductions in Fuel Expenditures**  **of the Preferred Alternative**  **Vs. The Dynamic Baseline and using Method A (**  **7% Discount Rate, Millions of 20**  **12$ )**  **a** REDUCED FUEL EXPENDI TURES

–

RETAIL REDUCED FUEL EXPENDI TURES

– UNTAXED MODEL YEAR HD

PICKUPS & VANS VOC TRACTO R/ TRAILER S SUM HD

PICKUPS & VANS VOC TRACTO R/ TRAILER S SUM 2018 $130 $0 $1,954 $2,084 $116 $0 $1,729 $1,845 2019 $109 $0 $1,721 $1,830 $97 $0 $1,528 $1,625 2020 $107 $0 $1,566 $1,673 $95 $0 $1,395 $1,490 2021 $510 $689 $7,197 $8,395 $455 $614 $6,426 $7,495 2022 $483 $653 $6,766 $7,902 $433 $583 $6,056 $7,072 2023 $762 $617 $6,249 $7,628 $684 $553 $5,605 $6,842 2024 $828 $1,227 $9,401 $11,457 $745 $1,101 $8,451 $10,297 2025 $1,265 $1,188 $8,945 $11,399 $1,138 $1,068 $8,058 $10,264 2026 $1,324 $1,147 $8,487 $10,957 $1,191 $1,033 $7,661 $9,884 2027 $1,373 $1,840 $9,264 $12,476 $1,236 $1,660 $8,378 $11,274 2028 $1,311 $1,758 $8,810 $11,879 $1,183 $1,589 $7,982 $10,753 2029 $1,257 $1,676 $8,472 $11,406 $1,136 $1,517 $7,690 $10,343 Sum $9,459 $10,796 $78,832 $99,087 $8,508 $9,717 $70,958 $89,184 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1


## 7.1.3 **Maintenance Costs** The agencies have estimated increased maintenance costs associated with installation of lower rolling resistance tires. We expect that, when replaced, the lower rolling resistance tires would be replaced b y equivalent performing tires throughout the vehicle lifetime. As such, the incremental increases in costs for lower rolling resistance tires would be incurred throughout the vehicle lifetime at intervals consistent with current tire replacement intervals. Those intervals are difficult to quantify

given the variety of vehicles and operating modes within the HD industry . For HD pickups and vans, we have chosen a tire replacement interval of 40,000 miles. We have done the same for all vocational vehicles which is probably overly conservative as more frequent intervals results in higher maintenance costs. For tractors and trailers, we have used a maintenance interval of 200,000 miles. The presence of tire inflation management systems, and the increased use of those s ystems expected due to this proposed rule, should serve to improve tire maintenance intervals. In evaluating maintenance costs associated with the proposal relative to the less dy namic baseline, EPA has used the maintenance intervals noted above, the MOVES policy case VMT, and the MOVES population of specific MY vehicles in future calendar years to estimate the increased maintenance costs associated with the proposal, again for each subcategory . Note that, in the context of the benefit
- cost analys is, EPA has estimated maintenance costs using the policy case VMT which, b y definition, includes rebound VMT (see Section IX of the preamble and

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7 - 15 Chapter 8 of this draft RIA for a discussion of rebound VMT). In evaluating maintenance costs assoc iated with the proposal relative to Alternative 1b, NHTSA has used, for HD pickups and vans, the integrated analysis performed using the CAFE modeling s ystem. For vocational vehicles, tractors and trailers, NHTSA has used the MOVES
-based approach outlined above. Table 7 - 13 shows the incremental increased costs associated with lower rolling resistance tires for HD pickups and vans, vocational vehicles, tractors, trailers and tractor/trailers relative to the dy namic baseline. **Table 7**  **- 13**  **Increased Maintenance Costs at Maintenance Intervals Associated with the Preferred Alternative Vs. The Dynamic Baseline using Method**  **A**

**(20 12$/event)**  **a ,b**  MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR TRAILER TRACTOR/ TRAILER 2018 $0.00 $0.00 $0.00 $79.92 $67.16 2019 $0.00 $0.00 $0.00 $77.77 $65.36 2020 $0.00 $0.00 $0.00 $75.69 $63.60 2021 $1.72 $6.99 $33.16 $78.81 $99.38 2022 $3.45 $6.91 $32.53 $75.98 $96.39 2023 $5.17 $8.12 $31.66 $71.17 $91.46 2024 $6.90 $17.66 $33.50 $73.97 $95.66 2025 $8.62 $17.47 $32.92 $72.02 $93.43 202 6 $8.62 $13.50 $30.01 $70.72 $89.44 2027 $8.62 $21.34 $32.27 $69.44 $90.62 2028 $8.62 $20.26 $31.52 $68.18 $88.81 2029 & later $8.62 $15.99 $31.22 $66.27 $86.91 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b The maintenance category includes only the incremental expenditure required to assure that low rolling resistance, rather than conventional, tires are used throughout the useful life of the vehicle. The agencies request comment and information on other relevant maintenance costs 

### Table 7 - 14 presents the model year lifetime in
-use maintenance costs

— versus the dy namic baseline and using Method A

— discounted at 3 percent. Table 7 - 15 presents the model ye ar lifetime in
-use maintenance costs

— versus the dy

namic baseline and using Method A

— discounted at 7 percent.

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7 - 16 **Table 7**  **- 14**  **Discounted MY Lifetime Mai** **ntenance Costs of the**  **Preferred Alternative**

**Vs. The Dynamic Baseline and using Method A**  **( 3% Discount Rate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $51.2 $51.2 2019 $0.0 $0.0 $49.2 $49.2 2020 $0.0 $0.0 $47.5 $47.5 2021 $3.3 $14.1 $72.6 $90.0 2022 $6.5 $13.5 $69.0 $88.9 2023 $9.4 $15.4 $64.0 $88.8 2024 $12.3 $33.3 $66.6 $112.2 2025 $15.1 $32.7 $65.1 $112.9 2026 $15.0 $25.0 $62.1 $102.1 2027 $14.7 $38.9 $62.3 $115.9 2028 $14.4 $36.2 $60.2 $110.7 2029 $14.0 $27.9 $57.9 $99.8 Sum $104.6 $237.0 $727.6 $1,069.2 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 15**  **Discounted MY Lifetime Maintenance**  **Costs of the Preferred Alternative** 

**Vs. The Dynamic Baseline and using Method A**  **( 7% Discount Rate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $35.8 $35.8 2019 $0.0 $0.0 $33.2 $33.2 2020 $0.0 $0.0 $30.9 $30.9 2021 $2.1 $8.9 $45.5 $56.6 2022 $3.9 $8.3 $41.7 $53.9 2023 $5.5 $9.1 $37.3 $51.9 2024 $6.9 $18.9 $37.4 $63.2 2025 $8.3 $17.8 $35.2 $61.3 2026 $7.9 $13.1 $32.4 $53.4 2027 $7.4 $19.7 $31.3 $58.5 2028 $7.0 $17.7 $29.2 $53.9 2029 $6.6 $13.1 $27.1 $46.8 Sum $55.7 $126.6 $417.2 $599.5 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 17 

## 7.1.4 **Analysis of Payback Periods** An important metric to vehicle purchasers is the pay back period that can be expected on any new purchase. In other words, there is greater willingness to pay for new technology

if that new technology

“pays back” within an acceptable period of time. We make no effort to define the acceptable period of time here, but seek to estimate the pay back period for others to make the decision themselves. We define the pay back period as the point at which reduced fuel expenditures outpace increased vehicle costs. For example, a new MY2027 HD pickup truck is estimated to cost roughly $1, 400 more (on average, in 2012$, and relative to the reference case vehicle) due to the addition of new fuel consumption improving and GHG reducing technology
. This new technology

would result in lower fuel consumption and, therefore, reduced fuel expenditures. But how many months or years would pass before the reduced fuel expenditures would surpass the increased costs? To estimate the costs, we have considered not only the cost of the new technology, but also the taxes paid on the incrementally higher purchase expense, the slightly higher insurance expenses on the slightly

higher value vehicle, the increased finance cost, and the increased maintenance costs associated with the new technology
. Taxes and fee s paid were estimated as 5.46 percent of the final MSRP. Financing was estimated to be 15.32 percent of final MSRP, and for insurance costs, the model uses an estimate of 19.23 percent of the final MSRP of a vehicle as the cost of insurance. For maintenance costs, the results shown in Table 7 - 16 express the average incremental maintenance costs associated with new technology added to an average HD pickup or van which drives an average amount of miles each ye ar. These calculations do not represent specific vehicle classes or specific use cases so should not be seen as being applicable to any particular individual’s situation. However, the pay back periods do provide a general sense, on average, of what sort of pay back periods are likely at a national, societal perspective. Table 7 - 16 presents the discounted annual increased vehicle costs and fuel expenditure impacts associated with owning a new MY2027 HD pickup or van using both 3 percent and 7 percent discount rates. The results in this table use Method A . As shown in the table, the pay back for HD pickups and vans occurs late in the 3rd year of ownership (the year in which cumulative expenditures become negative) using a 3 percent discount rate and in the early part of the 4th year using a 7 percent discount rate. For other class es of vehicles , including vehicle ty pes such as refuse trucks and transit buses , refer to the Method B analysis of pay back periods presented in Chapter 0 .

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7 - 18 **Table 7**  **- 16**  **Discounted Owner Expenditures & Payback Period for MY2027 HD Pickups & Vans under the**

**Preferred Alternative Vs. The Dynamic Baseline and using Method A**

**3% and 7% Discount Rates (2012$) a**  Age 3% Discount Rate 7% Discount Rate Technology cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures Technology

cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures 1 $1,855 $0
- $522 $1,333 $1,779 $0
- $501 $1,278 2 $0 $0
- $513 $820 $0 $0
- $471 $806 3 $0 $0
- $467 $353 $0 $0
- $411 $395 4 $0 $0
- $429
- $76 $0 $0
- $363 $32 5 $0 $0
- $408
- $484 $0 $0
- $330
- $298 6 $0 $0
- $369
- $852 $0 $0
- $286
- $584 7 $0 $0
- $325
- $1,177 $0 $0
- $242
- $826 8 $0 $0
- $282
- $1,459 $0 $0
- $201
- $1,027 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b 6% sales tax; insurance estimates are described in text. c Fuel expenditures calculated using retail fuel prices according to AEO2014 early release, reference case estimates. 

## 7.2 **Vehicle Costs , Fuel Savings and Maintenance Costs**  **vs. the Less**  **Dynamic Baseline and using**  **Method B** As noted in the introduction to Chapter 7.1 , the agencies joint analys is of the potential costs of the proposed standards combines EPA MOVES modeling of vo cational vehicle, tractor and trailer fuel consumption, EPA analysis of vocational vehicle, tractor and trailer costs, along with DOT CAFE model calculations of HD pickup and van costs per vehicle . The analys is includes costs for fuel
- saving technology that manufacturers could add in response to the proposed standards, EPA estimates of the additional compliance and R&D costs for vocational vehicles and combination tractor trailers, and some additional maintenance costs. 3 

## 7.2.1 **Vehicle Program**  **Costs** In this section, the agencies present our estimate of the vehicle
- related costs associated with the preferred alternative (Alternative 3) versus the less dy namic baseline (Alternative 1a) using the MOVES analys is of HD pickups and vans as well as vocational vehicle, tractors and trailers . The presentation here summarizes the costs associated with new technology the agencies estimate manufacturers could add to meet the proposed GHG and fuel consumption standards. The analys is summarize d here provides our estimate of incremental costs on a per vehicle basis , on a MY lifetime basis and on an annual basis. For details behind the cost estimates associated with individual technologies, the reader is directed to Sections III through VI of the proposed preamble and to Chapter 2 of the draft RIA . The analysis here also includes a look at pay

back periods

—the time at which cumulative fuel savings outweigh increased costs associated with new, more fuel efficient vehicles. And finally, the analys is here includes a look at the cost per ton of GHG emissions reduced by the addition of new technology
.

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7 - 19 Note that all discounted costs presented in this chapter, whether in the Calendar Year (or annual) analysis or the Model Year Li fetime analysis, are dis counted back to 2015 at the discount rate shown in the table(s). 

## 7.2.1.1 Technology

Costs For the HD pickup s and vans , the agencies have used a methodology consistent with that used for our recent 2017
- 2025 light
- duty joint rulemaking since most of the technologies expected for HD pickup s and vans are consistent with those expected for the larger light
- duty trucks. The cost estimates presented in the recent light
- duty joint rulemaking were then scaled upward to account for the larger weight, towing capacity, and work demands of the trucks in these heavier classes. For details on that scaling process and the resultant costs for individual technologies, the reader is directed to Chapter 2.12 of this draft RIA . Note also that all cost estimates have been updated to 2012 dollars for this analysis while the 2017
- 2025 light
- duty joint rulemaking was presented in 2010 dollars. 4 

### For vocational vehicles, tractors and trailers , consistent with the Phase 1 rule , the agencies have estimated costs using a different methodology than that employed in the recent light
- duty joint rulemaking establishing fuel economy and GHG standards . In the recent light
duty joint rulemaking, all fixed costs were included in the hardware costs via an indirect cost multiplier. As such, the hardware costs presented in that analysis included both the actual hardware and the associated fixed costs. For the vocational, tractor and trailer segments in this analys is, some of the fixed costs are estimated separately and are presented separately from the technology costs. As noted above, all costs are presented in 2012 dollars. The estimates of vehicle costs are generated relative to two unique “no action” baselines. The first of these (alternative 1a , presented here) representing generally flat or less dy namic fuel consumption improvements, or a fleet of vehicles meeting the Phase 1 heavy
- duty requirements
. The second of these (alternative 1b and presented in detail in Chapter 7.1 ) representing dynamic fuel consumption improvements, or a fleet of vehicles with improving fuel consumption despite the lack of regulatory

drivers. See Section X of the preambl e and Chapter 11 of this draft RIA for more detail on these two baselines. As such, costs to comply with the Phase 1 standards are not included in the estimates here. In fact, in the methodology used for vocational vehicles, tractors and trailers, there are cases where Phase 1 technologies are being removed in favor of Phase 2 technologies

– that is, the technology basis for the Phase 2 proposed standards involves removing certain of the Phase 1 technologies
. In those cases, savings are associated with the removal of the Phase 1 technology . The details of which technologies and where such savings occur are presented in Chapter 2 .12 of the draft RIA. For HD pickups and vans, as described in Chapter 2 of this draft RIA, the agencies used NHTSA’s CAFE model to estimate the cost per vehicle associated with the preferred and

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7 - 20 possible alternative standards. D 

### That model has the capability to look ahead at future standards when making determinations of how vehicles should be changed to comply
. Itdoes this because redesign cycles do not always line up well with regulatory implementation schedules, so a manufacturer may

choose to redesign a vehicle in MY2018 in preparation for upcoming MY2021
- 2025 standards if that particular vehicle is not scheduled for another redesign until, say, MY2026. The result being new technology costs in years prior to implementation of the standards. The CAFE model’s output would show such costs occurring in years prior to MY2021. On the other hand, the CAFE model also estimates the potential that credits generated in earlier model ye ars might be carried forward (i.e., “banked”) and then used in later model ye ars, potentially reducing costs in some model ye ars covered b y the analys is. In Table 7 - 17 , EPA has taken those early costs and spread them over the ye ars 2021 through 202 6 so that those costs can be fully

realized while showing them occurring during the expected ye ars of implementation. Table 7 - 17 presents the average incremental technology costs per vehicle for the preferred alternative relative to the less dy namic baseline and using Method B (the MOVES analys is for all vehicle categories). These tables include both engine and vehicle technologies
. For HD pickups and vans , costs begin with new standards in MY2021 then generally increase through MY2027 after which time they begin to decrease as vehicles continue to meet the MY2027 standards at ever decreasing cost due to learning effects. The trend is similar for vocational vehicles. For tractor/trailers, the costs begin in MY2018 as trailers begin adding new technology

to meet the 2018 trailer standards. Costs then increase in MY20 21 as the tractor standards begin through 2027. After 2027, costs begin to decrease due to learning effects. All costs shown in the table represent the weighted average cost of all vehicles within the category shown in the heading.

D The CAFE model also provides a full benefit
- cost analysis associated with the HD pickup and van portion of the proposed and alternative standards, and the agencies have used this analysis as part of Method A to provide estimates of the costs and benefits of today’s propos ed standards. The full benefit
- cost analysis for Method A is presented in Chapters 9 and 10 of this draft RIA. The full benefit
- cost analysis for Method B is presented in Chapter 8 of this draft RIA.

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7 - 21 **Table 7**  **- 17**  **Estim ated**  **Technology Cost**  **s per**  **Vehicle for the Preferred Alternative**  **versus the Less Dyna**  **mic Baseline**  **and using Method B (** **20 12**  **$ )**  a MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR / TRAILERS 2018 $0 $0 $639 2019 $0 $0 $613 2020 $0 $0 $592 2021 $558 $1,152 $7,606 2022 $551 $1,128 $7,482 2023 $834 $1,037 $7,016 2024 $991 $1,766 $10,947 2025 $1,204 $1,731 $10,763 2026 $1,267 $1,695 $10,513 2027 $1,342 $3,381 $12,849 2028 $1,332 $3,323 $12,655 2029 $1,334 $3,271 $12,548 2030 $1,324 $3,222 $12,439 2050 $1,324 $3,232 $12,415 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 As noted in the text, MYs 2018
- 2020 include costs for trailers only, and in MYs 2021 and later the costs include both tractor and trailer costs , inclusive of engine
-related costs
. Detailed technology and package cost s for all segments can be found in Chapter 2 of this draft RIA (notably, see Sections 2.12 and 2.13). Also, for HD pickups and vans, EPA has taken early costs and spread them over the years 2021 through 2026 so that those costs can be fully realized w hile showing them occurring during the expected years of implementation. 

### Table 7 - 18 present s the annual costs

— versus the l ess dyn amic b aseline and using Method B

—for new engine
- and vehicle
-related technology along with net present values at 3 percent and 7 percent. Table 7 - 19 present s the model ye ar lifetime costs

— versus the less dy

namic baseline and using Method B

—for new technology discounted at 3 percent
. Table 7 - 20 presents the model year lifetime costs

— versus the less dy

namic baseline and using Method B

—for new technology

discounted at 7 percent.

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7 - 22 **Table 7**  **- 18**  **Annual Technology Costs and Net Present Values Associated with the Preferred Alternative**  **vs .**  **the Less Dyna mic Baseline**  **and using Method B** 

**($Millions of 2012$) a**  CALENDAR YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0 $0 $116 $116 2019 $0 $0 $113 $113 2020 $0 $0 $112 $112 2021 $328 $591 $1,254 $2,173 2022 $324 $585 $1,252 $2,161 2023 $491 $541 $1,192 $2,224 2024 $590 $951 $1,913 $3,455 2025 $731 $961 $1,955 $3,647 2026 $788 $967 $1,980 $3,736 2027 $844 $1,972 $2,493 $5,309 2028 $847 $1,969 $2,519 $5,334 2029 $854 $1,963 $2,559 $5,376 2030 $855 $1,956 $2,589 $5,399 2035 $892 $2,076 $2,888 $5,856 2040 $935 $2,204 $3,177 $6,316 2050 $1,024 $2,414 $3,548 $6,987 NPV, 3% $13,475 $29,183 $43,268 $85,926 NPV, 7% $6,461 $13,502 $20,553 $40,516 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 23 **Table 7**  **- 19**  **Discounted MY Lifetime New Technology**  **Costs of the Preferred Alternative** 

**Vs. the Less Dynamic Baseline**  **and using Method B**  **( 3%**  **D iscount**  **R ate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0 $0 $104 $104 2019 $0 $0 $99 $99 2020 $0 $0 $95 $95 2021 $271 $488 $1,035 $1,794 2022 $260 $468 $1,003 $1,731 2023 $382 $421 $927 $1,730 2024 $446 $719 $1,445 $2,610 2025 $536 $705 $1,434 $2,674 2026 $561 $689 $1,410 $2,660 2027 $583 $1,363 $1,723 $3,670 2028 $568 $1,321 $1,690 $3,580 2029 $556 $1,279 $1,667 $3,502 Sum $4,164 $7,452 $12,632 $24,248 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 20**  **Discounted MY Lifetime New Technology**  **Costs of the Preferred Alternative** 

**Vs. the Less Dynamic Baseline**  **and using Method B**  **( 7%**  **D iscount**  **R ate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0 $0 $91 $91 2019 $0 $0 $84 $84 2020 $0 $0 $77 $77 2021 $212 $381 $808 $1,401 2022 $195 $352 $754 $1,302 2023 $276 $305 $671 $1,252 2024 $311 $501 $1,007 $1,818 2025 $360 $473 $961 $1,793 2026 $362 $445 $910 $1,717 2027 $363 $847 $1,071 $2,280 2028 $340 $790 $1,011 $2,141 2029 $320 $736 $960 $2,017 Sum $2,738 $4,829 $8,405 $15,973 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 24 

## 7.2.1.2 Compliance Costs As noted above, some fixed costs were estimated separately from the hardware costs. As such, not all fixed costs are included in the tables presented in S ection 7.2.1.1 . The agencies have estimated additional and/or new compliance costs associated with the proposed standards. Normally, compliance program costs would be considered part of the indirect costs and, therefore, would be accounted for via the markup applied to direct manufacturing costs. However, since the agencies are proposing new compliance elements that were not present during development of the indirect cost markups used in this analysis, additional compliance program costs are being accounted for via a separate “line
- item” here. Note that, for HD pickups and vans, compliance elements were present during development of the indirect cost markups used; as such, these costs are already included as part of the technology costs described above. There are three elements to the compliance costs estimated in this analysis. The first is for construction of new, or upgrades to existing, test facilities for conducting p owertrain testing. The second cost s are for conducting the p owertrain tests themselves. And the third is for reporting of compliance data to EPA and NHTSA. We estimated these latter costs in the Phase 1 rule as $0.24 million, $0.9 million and $1.1 million for HD pickups and vans, vocational and tractors, respectively, for a total of $2.3 million per year (2009$ )
. 5 

### All of these are industry
wide, annual costs. We have estimated new reporting costs in this Phase 2 proposal associated with new p owertrain testing within the vocational vehicle program, the increased level of reporting in the tractor program and an all new compliance program where none has existed to date within the trailer program. We have estimated those costs at $95,000 and $240,000 for vocational and tractor programs, and at $1.2 million in the trailer program, all in 2012$. All of these are industry
-wide, annual costs. For p owertrain testing facility upgrades and constr

uction, we have estimated that 6 manufacturers would upgrade and 5 would construct new facilities at an upgrade cost of $1.2 million and a new construction cost of $1.9 million, all in 2012$. The result being an industry
wide (but vocational program only) cost of $16.6 million (2012$). This cost would occur once which we have attributed to CY2021, what would be the first year of the Phase 2 vocational standards. E 

### Lastly, the vocational program is also estimated to incur costs associated with conducting p owertrain testing. We have estimated the cost of testing at $69,000 per test and expect three large manufacturers to conduct 20 tests/year for a total of $4.1 million/year. F

E Note that, in alternative 2, we expect no manufacturers would conduct powertrain testing so none would construct or upgrade facilities. F Note that, in alternative 2, we expect no powertrain testing so no testing costs; in alternative 4, we expect 4 large manufacturers to conduct the testing for an annual cost of $5.5 million.

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7 - 25 Table 7 - 21 through Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1


### Table 7 - 23 present the annual costs for new compliance program elements along with net present values at 3 percent and 7 percent , and the model year lifetime compliance costs discounted at 3 percent and 7 percent , respectively
. **Table 7**  **- 21**  **Annual Compliance Costs and Net Present Values Associated with the Preferred Alternative**  **Vs. The Less Dynamic Baseline**  **and using Method B** 

**($Millions of 2012$) a**  CALENDAR YEAR HD PICKUPS

& VANS VO CATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 $0.0 2021 $0.0 $16.6 $1.4 $18.1 2022 $0.0 $4.2 $1.4 $5.7 2023 $0.0 $4.2 $1.4 $5.7 2024 $0.0 $4.2 $1.4 $5.7 2025 $0.0 $4.2 $1.4 $5.7 2026 $0.0 $4.2 $1.4 $5.7 2027 $0.0 $4.2 $1.4 $5.7 2028 $0.0 $4.2 $1.4 $5.7 2029 $0.0 $4.2 $1.4 $5.7 2030 $0.0 $4.2 $1.4 $5.7 2035 $0.0 $4.2 $1.4 $5.7 2040 $0.0 $4.2 $1.4 $5.7 2050 $0.0 $4.2 $1.4 $5.7 NPV, 3% $0.0 $80.8 $23.7 $104.4 NPV, 7% $0.0 $44.2 $12.1 $56.4 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 26 **Table 7**  **- 22**  **Discounted MY Lifetime Compliance**  **Costs of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 3%**  **D iscount**  **R ate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 $0.0 2021 $0.0 $13.7 $1.2 $14.9 2022 $0.0 $3.4 $1.1 $4.5 2023 $0.0 $3.3 $1.1 $4.4 2024 $0.0 $3.2 $1.1 $4.3 2025 $0.0 $3.1 $1.0 $4.1 2026 $0.0 $3.0 $1.0 $4.0 2027 $0.0 $2.9 $1.0 $3.9 2028 $0.0 $2.8 $1.0 $3.8 2029 $0.0 $2.8 $0.9 $3.7 Sum $0.0 $38.3 $9.4 $47.7 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 23**  **Discounted MY Lifetime Compliance**  **Costs of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 7%**  **D iscount**  **R ate,**  **$M illions of 2012$**  **) a**  MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 $0.0 2021 $0.0 $10.7 $0.9 $11.6 2022 $0.0 $2.5 $0.9 $3.4 2023 $0.0 $2.4 $0.8 $3.2 2024 $0.0 $2.2 $0.7 $3.0 2025 $0.0 $2.1 $0.7 $2.8 2026 $0.0 $1.9 $0.7 $2.6 2027 $0.0 $1.8 $0.6 $2.4 2028 $0.0 $1.7 $0.6 $2.3 2029 $0.0 $1.6 $0.5 $2.1 Sum $0.0 $27.0 $6.4 $33.4 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 27 

## 7.2.1.3 Research & Development Costs Much like the compliance program costs described above, EPA has estimated additional engine, vocational vehicle and tractor R&D associated with the proposed standards that is not accounted for via the indirect cost markups used in this analysis for those segments
. The necessary R&D for HD pickups and vans is covered by the indirect costs included as part of the technology

costs described above. In the Phase 1 rule, the agencies estimated the engine R&D costs at $6. 8 million (2009$) per engine class per manufacturer per year for five ye ars. In this Phase 2 analys is, EPA has estimated this same level of R&D and has assumed 12 heavy-heavy and 12 medium
-heavy HD engine R&D programs would be conducted for a total of $214 million/year (2012$)
. In this analysis, EPA has assumed those costs would occur annually for 4 ye ars, MYs 2021
- 2024. The total being $857 million (2012$) over 4 years (by comparison, the Phase 1 rule estimated a total of $852 million (2009$) over 5 ye ars). To this, EPA has estimated an additional $6 million/ye ar spent b y vocational vehicle manuf acturers and $20 million/year spent by tractor manufacturers
. In the end, EPA is estimating a total of $961 million in R&D spending above and beyond the level included in the markups used to estimate indirect co sts for these segments
. Under alternative 4, due to the accelerated implementation of technology, EPA has estimated even more R&D

—an additional $6.5 million per year or $26 million total spent by vocational vehicle and tractor manufacturers
. Importantly, EPA estimate s that these costs would occur during normal R&D and vehicle design cycles for both alternatives 3 and 4. EPA has not included any additional R&D would be spent b y trailer manufacturers since our cost estimates include R&D conducted by trailer parts suppliers which are subsequently included in the prices charged b y those suppliers to the trailer manufacturer. Additionally, the markups we have applied to cover indirect costs (see Chapter 2.12 of this draft RIA) include costs associated with R&D incurred b y the trailer manufacturer. Table 7 - 24 through Table 7 - 26 present the annual costs for R&D spending along with net present values at 3 percent and 7 percent , and the model year lifetime R&D costs discounted at 3 percent and 7 percent , respectively
.

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7 - 28 **Table 7**  **- 24**  **Annual R& D Costs and Net Present Values Associated with the**  **Preferred Alternative**

**Vs. The Less Dynamic Baseline**  **and using Method B** 

**($Millions of 2012$) a**  CALENDAR YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 $0.0 2021 $0.0 $113.1 $127.1 $240.3 2022 $0.0 $113.1 $127.1 $240.3 2023 $0.0 $113.1 $127.1 $240.3 2024 $0.0 $113.1 $127.1 $240.3 2025 $0.0 $0.0 $0.0 $0.0 2026 $0.0 $0.0 $0.0 $0.0 2027 $0.0 $0.0 $0.0 $0.0 2028 $0.0 $0.0 $0.0 $0.0 2029 $0.0 $0.0 $0.0 $0.0 2030 $0.0 $0.0 $0.0 $0.0 2035 $0.0 $0.0 $0.0 $0.0 2040 $0.0 $0.0 $0.0 $0.0 2050 $0.0 $0.0 $0.0 $0.0 NPV, 3% $0.0 $357.5 $401.7 $759.2 NPV, 7% $0.0 $264.3 $297.0 $561.3 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

### *** E.O. 12866 Review
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7 - 29 **Table 7**  **- 25**  **Discounted MY Lifetime R&D**  **Costs of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 3%**  **D iscount**  **R ate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 $0.0 2021 $0.0 $93.4 $104.9 $198.3 2022 $0.0 $90.6 $101.9 $192.5 2023 $0.0 $88.0 $98.9 $186.9 2024 $0.0 $85.4 $96.0 $181.5 2025 $0.0 $0.0 $0.0 $0.0 2026 $0.0 $0.0 $0.0 $0.0 2027 $0.0 $0.0 $0.0 $0.0 2028 $0.0 $0.0 $0.0 $0.0 2029 $0.0 $0.0 $0.0 $0.0 Sum $0.0 $357.5 $401.7 $759.2 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 26**  **Discounted MY Lifetime R&D**  **Costs of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 7%**  **D iscount**  **R ate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $0.0 $0.0 2019 $0.0 $0.0 $0.0 $0.0 2020 $0.0 $0.0 $0.0 $0.0 2021 $0.0 $72.9 $81.9 $154.9 2022 $0.0 $68.1 $76.6 $144.7 2023 $0.0 $63.7 $71.6 $135.3 2024 $0.0 $59.5 $66.9 $126.4 2025 $0.0 $0.0 $0.0 $0.0 2026 $0.0 $0.0 $0.0 $0.0 2027 $0.0 $0.0 $0.0 $0.0 2028 $0.0 $0.0 $0.0 $0.0 2029 $0.0 $0.0 $0.0 $0.0 Sum $0.0 $264.3 $297.0 $561.3 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 30 

## 7.2.1.4 Summary of Vehicle
- Related Costs of the Program using Method B Table 7 - 27 present s the annual new vehicle costs (including engine
-related costs) associated with the preferred alternative for HD pickup s and van s , vocational vehicle s , and tractor and trailer program s along with net present values at 3 percent and 7 percent. This table present s costs relative to the less dy namic baseline and using the MOVES analysis of all vehicle categories (Method B)
. Table 7 - 28 present s the model year lifetime costs associated with the preferred alternative discounted at 3 percent relative to the less dy namic baseline and using Method B
. Table 7 - 29 present s the model year lifetime costs associated with the preferred alternative discounted at 7 percent relative to the less dy namic baseline and using Method B
. **Table 7**  **- 27**  **Annual Vehicle** **- Related**  **Costs and Net Present Values Associated with the Preferred Alternative**  **Vs. The Less Dynamic Baseline**  **and using Method B** 

**($Millions of 2012$) a**  CALENDAR YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0 $0 $116 $116 2019 $0 $0 $113 $113 2020 $0 $0 $112 $112 2021 $328 $721 $1,382 $2,432 2022 $324 $702 $1,381 $2,407 2023 $491 $659 $1,320 $2,470 2024 $590 $1,069 $2,042 $3,701 2025 $731 $965 $1,956 $3,653 2026 $788 $972 $1,982 $3,742 2027 $844 $1,976 $2,495 $5,315 2028 $847 $1,973 $2,520 $5,340 2029 $854 $1,967 $2,560 $5,381 2030 $855 $1,960 $2,591 $5,405 2035 $892 $2,080 $2,890 $5,862 2040 $935 $2,209 $3,179 $6,322 2050 $1,024 $2,418 $3,550 $6,992 NPV, 3% $13,475 $29,621 $43,693 $86,789 NPV, 7% $6,461 $13,810 $20,862 $41,133 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 31 **Table 7**  **- 28**  **Discounted MY Lifetime Vehicle** **- Related**  **Costs of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 3%**  **D iscount**  **R ate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0 $0 $104 $104 2019 $0 $0 $99 $99 2020 $0 $0 $95 $95 2021 $271 $595 $1,141 $2,007 2022 $260 $563 $1,106 $1,928 2023 $382 $512 $1,027 $1,921 2024 $446 $807 $1,542 $2,795 2025 $536 $708 $1,435 $2,678 2026 $561 $692 $1,411 $2,664 2027 $583 $1,366 $1,724 $3,673 2028 $568 $1,324 $1,691 $3,583 2029 $556 $1,282 $1,668 $3,506 Sum $4,164 $7,848 $13,044 $25,055 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 29**  **Discounted MY Lifetime Vehicle** **- Related**  **Costs of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 7%**  **D iscount**  **R ate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0 $0 $91 $91 2019 $0 $0 $84 $84 2020 $0 $0 $77 $77 2021 $212 $465 $891 $1,567 2022 $195 $423 $832 $1,450 2023 $276 $371 $743 $1,390 2024 $311 $562 $1,074 $1,947 2025 $360 $475 $962 $1,796 2026 $362 $446 $911 $1,719 2027 $363 $849 $1,072 $2,283 2028 $340 $792 $1,012 $2,143 2029 $320 $738 $960 $2,019 Sum $2,738 $5,121 $8,709 $16,568 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 32 

## 7.2.2 **Changes i n Fuel**  **Consumption and Savings** 7.2.2.1 Changes in Fuel Consumption The proposed standards would result in significant improvements in the fuel efficiency of affected vehicles . Drivers of those vehicles would see corresponding savings associated with reduced fuel expenditures. The agencies have estimated the impacts on fuel consumption for the proposed standards. More detail behind these changes in fuel consumption is presented in Chapter 5 of this draft RIA. The expected impacts on fuel consumption are shown in Table 7 - 30 as reductions from the less dy namic baseline reference case (i.e., positive values represent fewer gallons consumed) and using the MOVES analys is of all vehicle categories (Method B) . The gallons shown in this table include any increased consumption resulting from the rebound effect.

**Table 7**  **- 30**  **Annual Fuel Con**  **s um** **ption Reductions due**  **to the**  **Preferred Alternative**

**Vs. The Less Dynamic Baseline**  **and using Method B** 

**(M illion**  **G allons)**  **a** GASOLINE REDUCTIONS DIESEL REDUCTIONS CALENDAR YEAR HD

PICKUPS & VANS VOC TRACTOR/

TRAILERS SUM HD PICKUPS & VANS VOC TRACTOR/

TRAILERS SUM 2018 0 0 0 0 0 0 74 74 2019 0 0 0 0 0 0 150 150 2020 0 0 0 0 0 0 227 227 2021 5 5 0 10 5 29 489 523 2022 19 10 0 29 20 58 817 894 2023 42 15 0 57 43 86 1,147 1,276 2024 73 26 0 99 76 146 1,674 1,895 2025 113 37 0 151 117 205 2,202 2,523 2026 161 48 0 210 167 263 2,722 3,152 2027 217 74 0 291 224 357 3,308 3,890 2028 270 99 0 369 280 449 3,871 4,600 2029 321 123 0 445 333 538 4,407 5,278 2030 370 147 0 516 383 622 4,918 5,924 2035 561 240 0 801 579 962 6,975 8,517 2040 674 294 0 968 690 1,169 8,349 10,209 2050 783 343 0 1,127 803 1,390 10,117 12,310 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 33 **Table 7**  **- 31**  **MY Lifetim e Fuel Consumption Reductions due to the Preferred Alternative** 

**Vs. The Less Dynamic Baseline and using Method B**

**(M illion Gallons)**  **a** GASOLINE REDUCTIONS DIESEL REDUCTIONS MODEL YEAR HD

PICKUPS & VANS VOC TRACTOR/

TRAILERS SUM HD PICKUPS & VANS VOC TRACTOR/

TRAILERS SUM 2018 0 0 0 0 0 0 754 754 2019 0 0 0 0 0 0 745 745 2020 0 0 0 0 0 0 738 738 2021 58 54 0 113 59 340 4,025 4,424 2022 162 54 0 216 164 340 4,064 4,568 2023 263 54 0 317 267 340 4,096 4,703 2024 366 127 0 493 373 705 6,551 7,628 2025 472 130 0 602 481 722 6,763 7,967 2026 582 133 0 714 593 738 6,958 8,289 2027 685 297 0 982 699 1,193 8,092 9,984 2028 692 300 0 992 707 1,210 8,265 10,181 2029 696 303 0 999 712 1,222 8,427 10,360 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1


## 7.2.2.2 Changes in Fuel Expenditures Using the fuel consumption reductions presented above , the agencies have calculate d the fuel expenditure changes associated with the proposed standards , subcategory by subcategory . To do this, reduced fuel consumption is multiplied in each ye ar b y the corresponding estimated average fuel price in that ye ar, using the reference case fuel prices from AEO 201 4 . As the AEO fuel price projections go through 2040 and not beyond, f uel prices beyond 20 40 were set equal to the 2040 values
. These estimates do not account for the significant uncertainty in future fuel prices; the monetized fuel savings would be understated if actual fuel prices are higher (or overstated if fuel prices are l ower) than estimated. The Annual Energy Outlook (AEO ) is a standard reference used by NHTSA and EPA and many other government agencies to estimate the projected price of fuel. This has been done using both the pre
-tax and post
-tax fuel prices. Since the post-tax fuel prices are the prices paid at fuel pumps, the fuel expenditure changes calculated using these prices represent the changes fuel purchasers would see. The pre
-tax fuel savings are those that society would see. Assuming no change in fuel tax rates, the difference between these two columns represents the reduction in fuel tax revenues that would be received by state and federal governments , or about $ 240 million in 20 21 and $ 5.2 billion by 2050 as shown in Table 7 - 32 . Table 7 - 33 presents the model year lifetime fuel savings

— versus the less dy

namic baseline and using Method B

—discounted at 3 percent. Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 34 Table 7 - 34 presents the model year lifetime costs fuel savings

— versus the less dy

namic baseline and using Method B

—discounted at 7 p ercent. Note that in Chapters 8 and 1 1 of this draft RIA , the overall benefits and costs of the rulemaking are presented and only the pre
-tax fuel expenditure impacts are presented there. **Table 7**  **- 32**  **Annual Reductions**  **in Fuel**  **Expenditures and Net Present Values**  **due to the Preferred Alternative**  **Vs. The Less Dynamic Baseline**  **and using Method B** 

**(M illions of**  **20 12**  **$ )**  **a** REDUCED FUEL EXPENDI TURES

–

RETAIL REDUCED FUEL EXPENDI TURES

– UNTAXED CALENDAR YEAR HD

PICKUPS & VANS VOC TRACTOR/

TRAILERS SUM HD PICKUPS & VANS VOC TRACTOR/

TRAILERS SUM 2018 $0 $0 $261 $261 $0 $0 $227 $227 2019 $0 $0 $540 $540 $0 $0 $472 $472 2020 $0 $0 $834 $834 $0 $0 $731 $731 2021 $36 $124 $1,830 $1,989 $31 $109 $1,610 $1,750 2022 $137 $251 $3,117 $3,505 $120 $222 $2,753 $3,095 2023 $303 $381 $4,435 $5,119 $267 $337 $3,928 $4,532 2024 $536 $656 $6,558 $7,750 $474 $581 $5,824 $6,879 2025 $838 $937 $8,756 $10,531 $742 $833 $7,797 $9,372 2026 $1,206 $1,218 $10,953 $13,378 $1,071 $1,085 $9,777 $11,934 2027 $1,643 $1,708 $13,508 $16,859 $1,462 $1,525 $12,089 $15,076 2028 $2,062 $2,182 $15,937 $20,181 $1,837 $1,952 $14,289 $18,079 2029 $2,478 $2,658 $18,349 $23,485 $2,213 $2,383 $16,487 $21,083 2030 $2,877 $3,120 $20,677 $26,675 $2,574 $2,803 $18,616 $23,993 2035 $4,633 $5,175 $31,160 $40,968 $4,190 $4,698 $28,354 $37,242 2040 $5,896 $6,681 $39,501 $52,078 $5,385 $6,122 $36,276 $47,783 2050 $6,859 $7,917 $47,862 $62,638 $6,264 $7,255 $43,955 $57,474 NPV, 3% $59,038 $66,542 $418,711 $544,290 $53,537 $60,566 $381,492 $495,595 NPV, 7% $24,187 $27,169 $176,228 $227,584 $21,881 $24,670 $160,096 $206,646 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 35 **Table 7**  **- 33**  **Discounted MY Lifetime Reductions in**  **Fuel Expenditure s**  **of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 3%**  **D iscount**  **R ate,**  **Millions of 20 12$**  **) a**  REDUCED FUEL EXPENDI TURES

–

RETAIL REDUCED FUEL EXPENDI TURES

– UNTAXED MODEL YEAR HD

PICKUPS & VANS VOC TRACTO R/ TRAILER S SUM HD

PICKUPS & VANS VOC TRACTO R/ TRAILER S SUM 2018 $0 $0 $2,183 $2,183 $0 $0 $1,937 $1,937 2019 $0 $0 $2,123 $2,123 $0 $0 $1,890 $1,890 2020 $0 $0 $2,066 $2,066 $0 $0 $1,844 $1,844 2021 $296 $1,066 $11,074 $12,436 $263 $952 $9,911 $11,126 2022 $813 $1,048 $10,995 $12,856 $724 $938 $9,862 $11,525 2023 $1,296 $1,029 $10,888 $13,212 $1,157 $923 $9,787 $11,867 2024 $1,774 $2,124 $17,103 $21,001 $1,587 $1,909 $15,405 $18,901 2025 $2,246 $2,136 $17,330 $21,712 $2,013 $1,923 $15,640 $19,577 2026 $2,712 $2,140 $17,490 $22,342 $2,436 $1,931 $15,814 $20,180 2027 $3,135 $3,564 $19,944 $26,643 $2,821 $3,220 $18,065 $24,106 2028 $3,104 $3,539 $19,949 $26,592 $2,798 $3,202 $18,101 $24,101 2029 $3,064 $3,503 $19,925 $26,493 $2,767 $3,175 $18,109 $24,052 Sum $18,440 $20,149 $151,070 $189,659 $16,567 $18,173 $136,364 $171,105 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 **Table 7**  **- 34**  **Discounted MY Lifetime Reductions in**  **Fuel Expenditure s**  **of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 7%**  **D iscount**  **R ate,**  **Millions of 20 12$**  **) a**  REDUCED FUEL EXPENDI TURES

–

RETAIL REDUCED FUEL EXPENDI TURES

– UNTAXED MODEL YEAR HD

PICKUPS & VANS VOC TRACTO R/ TRAILER S SUM HD

PICKUPS & VANS VOC TRACTO R/ TRAILER S SUM 2018 $0 $0 $1,529 $1,529 $0 $0 $1,352 $1,352 2019 $0 $0 $1,428 $1,428 $0 $0 $1,267 $1,267 2020 $0 $0 $1,331 $1,331 $0 $0 $1,185 $1,185 2021 $186 $666 $6,848 $7,701 $165 $594 $6,115 $6,874 2022 $492 $631 $6,555 $7,678 $437 $564 $5,867 $6,869 2023 $755 $597 $6,255 $7,607 $673 $535 $5,611 $6,819 2024 $995 $1,187 $9,472 $11,654 $889 $1,065 $8,515 $10,469 2025 $1,213 $1,149 $9,244 $11,607 $1,086 $1,033 $8,328 $10,447 2026 $1,410 $1,109 $8,986 $11,505 $1,265 $999 $8,111 $10,374 2027 $1,570 $1,780 $9,868 $13,218 $1,411 $1,605 $8,924 $11,940 2028 $1,496 $1,701 $9,500 $12,697 $1,347 $1,537 $8,607 $11,490 2029 $1,423 $1,621 $9,135 $12,179 $1,283 $1,468 $8,291 $11,041 Sum $9,540 $10,442 $80,151 $100,134 $8,555 $9,399 $72,174 $90,128 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 36 

## 7.2.3 **Maintenance Costs** The agencies have estimated increased maintenance costs associated with installation of lower rolling resistance tires. We expect that, when replaced, the lower rolling resistance tires would be replaced b y equivalent performing tires throughout the vehicle lifetime. As such, the incremental increases in costs for lower rolling resistance tires would be incurred throughout the vehicle lifetime at intervals consistent with current tire replacement intervals. Those intervals are difficult to quantify

given the variety of vehicles and operating modes within the HD industry
. For HD pickups and vans, we have chosen a tire repl acement interval of 40,000 miles. We have done the same for all vocational vehicles which is probably overly conservative as more frequent intervals results in higher maintenance costs. For tractors and trailers, we have used a maintenance interval of 200 ,000 miles. The presence of tire inflation management systems, and the increased use of those s ystems expected due to this proposed rule, should serve to improve tire maintenance intervals. In evaluating maintenance costs associated with the proposal relative to the less dy namic baseline , EPA has used the maintenance intervals noted above, the MOVES policy case VMT, and the MOVES population of specific MY vehicles in future calendar years to estimate the increased maintenance costs associated with the prop osal , again for each subcategory
. Note that, in the context of the benefit
- cost analys is, EPA has estimated maintenance costs using the policy case VMT which, b y definition, includes rebound VMT (see Section IX of the preamble and Chapter 8 of this draft RIA for a discussion of rebound VMT) . In contrast, in the context of the pay back analys is discussed below, EPA estimate s maintenance costs using the reference case VMT which, b y definition, excludes rebound VMT. EPA does this for reasons explained in the pay back discussion presented in Chapter 0 of this draft RIA
. Table 7 - 35 shows the incremental increased costs associated with lower rolling resistance tires for HD pickups and vans, vocational vehicles, tractors, trailers and tractor/trailers relative to the less dy

namic baseline and using Method B
. Table 7 - 36 shows the lifetime maintenance intervals for MY2018 through MY2029 .

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7 - 37 **Table 7**  **- 35**  **Increased Maintenance Costs at Maintenance Intervals**  **A ssociated with the Preferred Alternative**  **Vs. The Less Dynamic Baseline**  **and using Method B** 

**(2012$/event) a**  MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR TRAILER TRACTOR/ TRAILER 2018 $0.00 $0.00 $0.00 $79.92 $67.16 2019 $0.00 $0.00 $0.00 $77.77 $65.36 2020 $0.00 $0.00 $0.00 $75.69 $63.60 2021 $1.72 $6.99 $33.16 $78.81 $99.38 2022 $3.45 $6.91 $32.53 $76.74 $97.02 2023 $5.17 $8.12 $31.66 $71.17 $91.46 2024 $6.90 $17.66 $33.50 $73.97 $95.66 2025 $8.62 $17.47 $32.92 $72.02 $93.43 202 6 $8.62 $13.50 $30.01 $70.72 $89.44 2027 $8.62 $21.34 $32.27 $69.44 $90.62 2028 $8.62 $20.26 $31.52 $68.85 $89.37 2029 & later $8.62 $15.99 $31.22 $68.27 $88.59 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 36**  **Lifetim e Maintenance Intervals for the Indicated Model Years** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **a ,**  **b** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR / TRAILER 2018 7.19 7.89 7.74 2019 7.18 7.85 7.74 2020 7.16 7.82 7.73 2021 7.24 7.93 7.74 2022 7.23 7.90 7.74 2023 7.23 7.88 7.74 2024 7.23 7.87 7.75 2025 7.23 7.86 7.77 2026 7.25 7.87 7.80 2027 7.28 7.88 7.85 2028 7.32 7.90 7.90 2029 & later 7.37 7.93 7.97 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b Includes rebound vehicle miles traveled (VMT).

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7 - 38 Table 7 - 37 present s the annual in
-use maintenance costs associated with the preferred alternative along with net present values at 3 percent and 7 percent. This tabl e presents costs relative to the less dynamic baseline and using the MOVES anal ys is for all vehicle categories (Method B)
. Table 7 - 38 present s the model ye ar lifetime in
-use maintenance costs

— versus the l ess dynamic b aseline and using Method B

— discounted at 3 percent. Table 7 - 39 present s the model year lifetime in
-use maintenance costs

— versus the l ess dyn amic b aseline and using Method B

—discounted at 7 percent. **Table 7**  **- 37**  **Annual Increased**  **Maintenance Costs and Net Present Values Associated with the Preferred** 

**Alternative Vs.**  **The Less Dynamic Baseline**  **and using Method B** 

**($Millions of 2012$) a**  CALENDAR YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $5.5 $5.5 2019 $0.0 $0.0 $11.0 $11.0 2020 $0.0 $0.0 $16.5 $16.5 2021 $0.4 $1.8 $25.4 $27.6 2022 $1.3 $3.5 $33.8 $38.6 2023 $2.5 $5.6 $41.5 $49.6 2024 $4.2 $10.2 $49.3 $63.8 2025 $6.3 $14.7 $56.8 $77.8 2026 $8.4 $18.1 $63.4 $90.0 2027 $10.4 $23.6 $69.8 $103.7 2028 $12.3 $28.5 $75.5 $116.3 2029 $14.1 $32.0 $80.7 $126.8 2030 $14.1 $32.0 $80.7 $126.8 2035 $14.1 $32.0 $80.7 $126.8 2040 $14.1 $32.0 $80.7 $126.8 2050 $14.1 $32.0 $80.7 $126.8 NPV, 3% $183.5 $417.8 $1,194.7 $1,796.0 NPV, 7% $83.7 $191.1 $585.4 $860.2 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 39 **Table 7**  **- 38**  **Discounted MY Lifetime Maintenance**  **Costs of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 3%**  **D iscount**  **R ate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $51.2 $51.2 2019 $0.0 $0.0 $49.2 $49.2 2020 $0.0 $0.0 $47.5 $47.5 2021 $3.3 $14.1 $72.6 $90.0 2022 $6.5 $13.5 $69.4 $89.4 2023 $9.4 $15.4 $64.0 $88.8 2024 $12.3 $33.3 $66.6 $112.2 2025 $15.1 $32.7 $65.1 $112.9 2026 $15.0 $25.0 $62.1 $102.1 2027 $14.7 $38.9 $62.3 $115.9 2028 $14.4 $36.2 $60.6 $111.1 2029 $14.0 $27.9 $59.1 $101.0 Sum $104.6 $237.0 $729.5 $1,071.2 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 39**  **Discounted MY Lifetime Maintenance**  **Costs of the Preferred Alternative** 

**Vs. The Less Dynamic Baseline**  **and using Method B**  **( 7%**  **D iscount**  **R ate,**  **$M illions of 2012$)**  **a** MODEL YEAR HD PICKUPS

& VANS VOCATIONAL TRACTOR/ TRAILERS SUM 2018 $0.0 $0.0 $35.8 $35.8 2019 $0.0 $0.0 $33.2 $33.2 2020 $0.0 $0.0 $30.9 $30.9 2021 $2.1 $8.9 $45.5 $56.6 2022 $3.9 $8.3 $42.0 $54.2 2023 $5.5 $9.1 $37.3 $51.9 2024 $6.9 $18.9 $37.4 $63.2 2025 $8.3 $17.8 $35.2 $61.3 2026 $7.9 $13.1 $32.4 $53.4 2027 $7.4 $19.7 $31.3 $58.5 2028 $7.0 $17.7 $29.4 $54.0 2029 $6.6 $13.1 $27.6 $47.3 Sum $55.7 $126.6 $418.2 $600.5 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 40 

## 7.2.4 **Analysis of Payback Periods** An important metric to vehicle purchasers is the pay back period that can be expected on any new purchase. In other words, there is greater willingness to pay for new technology

if that new technology

“pays back” within an acceptable period of time. We make no effort to define the acceptable period of time here, but seek to estimate the pay back period for others to make the decision themselves. We define the pay back period as the point at which reduced fuel expenditures outpace increased vehicle costs. For example, a new MY2027 tractor with trailer is estimated to cost roughly $ 12,8 50 more (on average , including an “average” trailer, in 2012$ , and relative to the reference case vehicle) due to the addition of new GHG reducing/fuel consumption improving technology . This new technology would result in lower fuel consumption and, therefore, reduced fuel expenditures. But how many months or years would pass before the reduced fuel expenditures would surpass the increased costs? To estimate the costs, we have considered not only the cost of the new technology, but also the taxes paid on the incrementally higher purchase expense, the slightly higher insurance expenses on the slightly

higher value vehicle, and the increase d maintenance costs associated with the new technology
. Taxes paid were estimated as 6 percent sales tax in all regulated sectors and a 12 percent excise tax applicable in the tractor/trailer and vocational sectors. As such, the vehicle costs presented here are slightly higher than those presented elsewhere in this draft RIA. For insurance costs, we have estimated the collision insurance to be 2 percent of the purchase price of a vehicle consistent with the approach taken in our 2017
- 2025 light
- duty GHG/CAFE rule. 6 

### Therefore, increased insurance costs would equal 2 percent of the increased technology

costs, and would be incurred every year going forward. But, since collision insurance is tied to vehicle value, we have also included a depreciation rate consisting of straight
- line depreciation of 3 percent each ye ar through the 25 th 

### year of ownership at which time we have flat
- lined the depreciation and held vehicle value constant (see Table 7 - 59 in Chapter 7.3 , below)
. For maintenance costs, we have us ed the same method described above (see Chapter 0 of this draft RIA) except that we have used reference case VMT for the calculation rather than policy

case VMT (i .e., we exclude rebound miles here) because ty pical pay back considerations generally do not account for possible increased miles driven. Also, here we use retail fuel prices since those are the prices paid b y owners of these vehicles. We have conducted this pay back analys is for HD pickups and vans, vocational vehicles and for tractor/trailers (including the engines used in each of these subcategories)
. All calculations are for the average vehicle, or average tractor/trailer combination, that drives the average number of miles each ye ar. The calculations do not represent specific vehicle classes or specific use cases so should not be seen as being applicable to any particular individual’s situation. However, the pay back periods do provide a general sense , on average, of what sort of pay back periods are likely

at a national, societal perspective. Table 7 - 40 presents the discounted annual increased vehicle costs and fuel expenditure impacts associated with owning a new MY202 7 HD pickup or van using both 3 percent and 7 percent discount rates. The results in this table use Method B
. As shown in the table, the pay back for HD pickups and vans occurs late in the 3 rd 

### ye ar o f ownership (the year in which cumulative expenditures become negative) using a 3 percent discount rate and in the early part of the 3 rd 

### ye ar using a 7 percent discount rate
.

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7 - 41 **Table 7**  **- 40**  **Discounted Owner Expenditures & Payback Period for**  **MY2027 HD Pickups & Vans under the** 

**Preferred Alternative Vs.**  **The Less Dynamic Baseline and using**  **Method B**

**3% and 7% Discount Rates (2012$) a**  Age 3% D iscount Rate 7% D iscount Rate Technology cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures Technology

cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures 1 $1,587 $4
- $759 $832 $1,558 $3
- $745 $817 2 $25 $3
- $734 $126 $23 $3
- $694 $150 3 $23 $3
- $714
- $561 $21 $3
- $649
- $476 4 $22 $3
- $693
- $1,229 $19 $3
- $606
- $1,060 5 $20 $3
- $651
- $1,857 $17 $2
- $549
- $1,590 6 $19 $3
- $611
- $2,446 $15 $2
- $496
- $2,067 7 $18 $2
- $571
- $2,997 $14 $2
- $446
- $2,497 8 $16 $2
- $536
- $3,514 $12 $2
- $403
- $2,886 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b 6% sales tax; insurance estimates are described in text. c Fuel expenditures calculated using retail fuel prices according to AEO2014 early release, reference case estimates. 

### Table 7 - 41 and Table 7 - 42 show the same information for a MY202 7 vocational vehicle and a tractor/trailer, respectively. As shown, payback for vocational vehicles occurs in the 5 th 

### ye ar of ownership (using 3 percent discounting and in the 6 th 

### ye ar using 7 percent discounting) while pay back for tractor/trailers occurs early in the 2 nd 

### ye ar of ownership. **Table 7**  **- 41**  **Discounted Owner Expenditures & Payback Period for MY2027** **Vocational Vehicles under the**

**Preferred Alternative Vs.**  **The Less Dynamic Baseline and using**  **Method B**

**3% and 7% Discount Rates (2012$) a**  Age 3% Discount Rate 7% Discount Rate Technology cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures Technology

cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures 1 $3,998 $10
- $965 $3,043 $3,924 $10
- $947 $2,987 2 $63 $9
- $937 $2,178 $59 $9
- $885 $2,169 3 $59 $9
- $914 $1,331 $53 $8
- $832 $1,399 4 $55 $9
- $891 $504 $48 $8
- $780 $675 5 $51 $8
- $829
- $265 $43 $7
- $699 $27 6 $48 $7
- $771
- $981 $39 $6
- $625
- $554 7 $45 $7
- $716
- $1,645 $35 $5
- $559
- $1,073 8 $42 $6
- $667
- $2,264 $31 $5
- $501
- $1,538 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b 6% sales tax and 12% excise tax ; insurance estimates are described in text. c Fuel expenditures calculated using retail fuel prices according to AEO2014 early release, reference case estimates.

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7 - 42 **Table 7**  **- 42**  **Discounted Own er Expenditures & Payback Period for**  **MY2027 Tractor/Trailers under the** 

**Preferred Alternative Vs.**  **The Less Dynamic Baseline and using**  **Method B**

**3% and 7% Discount Rates (2012$) a**  Age 3% Discount Rate 7% Discount Rate Technology cost, taxes, insuranceb Maintenance

expenditures Fuel

expenditures c Cumulative expenditures Technology

cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures 1 $15,194 $48
- $14,649 $593 $14,914 $47
- $14,379 $582 2 $238 $46
- $14,204
- $13,327 $225 $43
- $13,421
- $12,571 3 $223 $44
- $13,809
- $26,869 $203 $40
- $12,561
- $24,889 4 $209 $42
- $13,416
- $40,034 $183 $37
- $11,746
- $36,415 5 $195 $39
- $12,391
- $52,191 $164 $33
- $10,443
- $46,661 6 $182 $35
- $11,411
- $63,385 $148 $29
- $9,258
- $55,743 7 $170 $32
- $10,511
- $73,694 $133 $25
- $8,209
- $63,794 8 $158 $29
- $9,704
- $83,211 $119 $22
- $7,295
- $70,949 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b 6% sales tax and 12% excise tax ; insurance estimates are described in text. c Fuel expenditures calculated using retail fuel prices according to AEO2014 early release, reference case estimates. 

### The fuel expenditure column uses retail fuel prices specific to gasoline and diesel fuel as projected in AEO2014 E arly Release
. This pay

back analys is does not include other private impacts, such as reduced refueling events, or other societal impacts, such as the potential rebound miles driven or the value of driving those rebound miles, or noise, congestion and accidents. It also does not include societal impacts such as co
-pollutant environmental benefits or benefits associated with reduced GHG emissions. We use retail fuel prices and exclude these other private and social impacts because the focus is meant to be on those factors that buyers think about most while considering a new vehicle purchase and those factors that result in more or fewer dollars in their pockets. In an effort to provide further information on payback, we have also looked at the pay back periods for more specific vehicle subcategories. For example, while the tractor/trailer pay back shown in Table 7 - 42 occurs early in the 2 nd 

### ye ar, the pay back for a Class 8 sleeper cab would occur within the first year of ownership as shown in Table 7 - 43 .

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7 - 43 **Table 7**  **- 43**  **Discounted Owner Expenditures & Payback Period for MY2027**  **Sleeper Cab with Trailer under**

**the Preferred Alternative**  **Vs. The Less Dynamic Baseline**  **and using Method B** 

**3% and 7% Discount Rates (2012$) a**  Age 3% Discount Rate 7% Discount Rate Technology cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures Technology

cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures 1 $16,541 $60
- $20,087
- $3,486 $16,236 $59
- $19,717
- $3,422 2 $259 $58
- $19,477
- $22,646 $244 $55
- $18,403
- $21,526 3 $243 $56
- $18,936
- $41,285 $221 $50
- $17,224
- $38,479 4 $227 $53
- $18,396
- $59,401 $199 $47
- $16,107
- $54,341 5 $212 $49
- $17,053
- $76,193 $179 $41
- $14,373
- $68,494 6 $198 $45
- $15,768
- $91,718 $161 $36
- $12,793
- $81,090 7 $185 $41
- $14,591
- $106,083 $144 $32
- $11,395
- $92,309 8 $172 $37
- $13,538
- $119,412 $129 $28
- $10,178
- $102,330 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b 6% sales tax and 12% excise tax ; insurance estimates are described in text. c Fuel expenditures calculated using retail fuel prices according to AEO2014 early release, reference case estimates. 

### Given the variety in the vocational market, the subcategory analys is becomes more interesting. For example, Table 7 - 44 shows the pay back for an intercity

bus. Table 7 - 45 shows the same information for a transit bus, while Table 7 - 46 shows this information for a school bus. These tables highlight how much the pay back period can vary depending on the level of technology

cost and fuel consumption improvement versus the number of miles driven. The high VMT intercity

bus (~80,000 miles/year) and transit bus (~60,000 miles/year) pay back in the 1 st 

### and 3 rd 

### year, respectively, despite first year costs exceeding $4,000 and $8,000, respectively . By contrast, the lower VMT school bus (~13,000 miles/year) pays back in the 11 th 

### ye ar (or 14 th 

### ye ar with 7 percent discounting) despite first year costs under $ 6 ,000 . **Table 7**  **- 44**  **Discounted Owner Expenditures & Payback Period for MY2027**  **Intercity Bus under the**

**Preferred Alternative Vs.**  **The Less Dynamic Baseline and using**  **Method B**

**3% and 7% Discount Rates (2012$) a**  Age 3% Discount Rate 7% Discount Rate Technology cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative

expenditures Technology

cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative

expenditures 1 $4,863 $57
- $8,388
- $3,469 $4,773 $56
- $8,234
- $3,405 2 $76 $55
- $8,203
- $11,541 $72 $52
- $7,751
- $11,032 3 $71 $53
- $8,046
- $19,462 $65 $48
- $7,318
- $18,237 4 $67 $52
- $7,881
- $27,225 $58 $45
- $6,901
- $25,034 5 $62 $50
- $7,734
- $34,846 $53 $42
- $6,518
- $31,457 6 $58 $49
- $7,593
- $42,332 $47 $39
- $6,160
- $37,530 7 $54 $47
- $7,459
- $49,689 $42 $37
- $5,826
- $43,277 8 $51 $46
- $7,357
- $56,950 $38 $34
- $5,531
- $48,735 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b 6% sales tax and 12% excise tax ; insurance estimates are described in text. c Fuel expenditures calculated using retail fuel prices according to AEO2014 early release, reference case estimates.

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7 - 44 **Table 7**  **- 45**  **Discounted Owner Expenditures & Payback Period for MY2027**  **Transit Bus under the**  **Preferred**

**Alternative Vs.**  **The Less Dynamic Baseline and using**  **Method B**

**3% and 7% Discount Rates (2012$) a**  Age 3% Discount Rate 7% Discount Rate Technology cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures Technology

cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures 1 $8,718 $45
- $4,328 $4,435 $8,558 $44
- $4,248 $4,353 2 $136 $42
- $4,098 $516 $129 $40
- $3,872 $650 3 $128 $40
- $3,892
- $3,209 $116 $36
- $3,540
- $2,738 4 $120 $37
- $3,689
- $6,741 $105 $33
- $3,230
- $5,830 5 $112 $35
- $3,503
- $10,097 $94 $29
- $2,953
- $8,659 6 $104 $33
- $3,330
- $13,290 $85 $27
- $2,702
- $11,249 7 $97 $31
- $3,170
- $16,332 $76 $24
- $2,476
- $13,625 8 $91 $29
- $3,026
- $19,238 $68 $22
- $2,275
- $15,810 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b 6% sales tax and 12% excise tax ; insurance estimates are described in text. c Fuel expenditures calculated using retail fuel prices according to AEO2014 early release, reference case estimates. **Table 7**  **- 46**  **Discounted Owner Expenditures & Payback Period for MY2027**  **School Bus under the**  **Preferred**

**Alternative Vs.**  **The Less Dynamic Baseline and using**  **Method B**

**3% and 7% Discount Rates (2012$) a**  Age 3% Discount Rate 7% Discount Rate Technology cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures Technology

cost, taxes, insurance b Maintenance

expenditures Fuel

expenditures c Cumulative expenditures 1 $5,687 $7
- $675 $5,019 $5,582 $7
- $662 $4,926 2 $89 $7
- $660 $4,455 $84 $6
- $623 $4,393 3 $83 $6
- $647 $3,897 $76 $6
- $589 $3,886 4 $78 $6
- $634 $3,348 $68 $6
- $555 $3,405 5 $73 $6
- $622 $2,805 $62 $5
- $524 $2,948 6 $68 $6
- $611 $2,268 $55 $5
- $495 $2,512 7 $63 $6
- $600 $1,737 $50 $4
- $469 $2,098 8 $59 $6
- $592 $1,210 $44 $4
- $445 $1,701 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b 6% sales tax and 12% excise tax ; insurance estimates are described in text. c Fuel expenditures calculated using retail fuel prices according to AEO2014 early release, reference case estimates. 

### We could present tables for each MOVES subcategory, but since all are calculated using the same methodology, the detailed tables seem unnecessary
. Instead, we provide Table 7 - 47 which summarizes the pay back period for each MOVES subcategory at both 3 percent and 7 percent discount rates and for each fuel type.

### *** E.O. 12866 Review
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7 - 45 **Table 7**  **- 47**  **Payback Periods Associated with the**  **Preferred Alternative Vs.**  **The Less Dynamic Baseline and using**  **Method B for**  **MY2027 Vehicle Subcategories at 3% and 7%**  **D iscount**  **R ates** 

**Payback occurs in Year Shown a**  

### Subcategory 3% Discount Rate 7% Discount Rate Gasoline Diesel All Gasoline Diesel All HD Pickups & Vans (MY202 7 ) 3 2 3 3 2 3 Vocational (MY202 7 for each) Intercity bus N/A 1 1 N/A 1 1 Transit bus 3 3 3 3 3 3 School bus 13 11 11 18 13 14 Refuse truck N/A 4 4 N/A 4 4 Single unit short haul 4 5 5 4 5 5 Single unit long haul N/A 3 3 N/A 3 3 Motor home >23 >23 >23 >23 >23 >23 All 5 5 5 5 6 6 Tractor/Trailer (MY202 7 for each) Combination short haul N/A 2 2 N/A 2 2 Combination long haul N/A 1 1 N/A 1 1 All N/A 2 2 N/A 2 2 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 N/A denotes no such vehicles in this segment. 

## 7.2.5 **Cost per Ton of CO**  **2** 

## Equivalent **Reduced vs.**  **t he Less Dynamic Baseline**  **and using**  **Method B** The agencies have calculated the cost per ton of GHG (CO 2 

### - equivalent, or CO 2 

### eq) reductions associated with this rulemaking using the costs presented in Chapter 7.2.1 and 7.2.2 , and the GHG emissions reductions described in Chapter 5 of this draft RIA . These costs per ton-reduction values are presented in Table 7 - 48 through Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 GHG reductions include CO 2 and CO 2 equivalents of CH4 , N2 O and HFCs. 

### Table 7 - 51 for HD pickups & vans, vocational vehicles , tractor/trailers and all segments , respectively. The cost per metric ton of GHG emissions reductions in 2050 represents the long
term cost per ton of the emissions reduced. The agencies have also calculated the cost per metric ton of GHG emission reductions including the savings associated with reduced fuel consumption. The calculation s presented here include all engine
- related costs but do not include benefits associated with the preferred alternative such as those associated with criteria pollutant reductions or energy

security benefits (discussed in Chapter 8 of this draft RIA). By including

### *** E.O. 12866 Review
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7 - 46 the fuel savings, the cost per ton
-reduction is less than $0 since the estimated value of fuel savings outweighs the program costs. **Table 7**  **- 48**  **Annual Cost per Metric Ton of CO 2**  **eq Em issions Reduced in**  **the Preferred Alternative Vs.**  **The Less Dynamic Baseline and using**  **Method B HD Pickups and Vans only (dollar values are 2012$)**  **a** Calendar Year Vehicle &

Maintenance Costs ($Billions) Fuel

Savings ($Billions) GHG

Reduced (MMT) $/metric

ton w/o fuel $/metric

ton w/ fuel 2021 $0.3 $0.0 0 $2,600 $2,400 2024 $0.6 $0.5 2 $330 $67 2027 $0.9 $1.5 5 $160
- $110 2030 $0.9 $2.6 9 $95
- $190 2035 $0.9 $4.2 14 $65
- $240 2040 $0.9 $5.4 17 $57
- $270 2050 $1.0 $6.3 19 $54
- $270 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 GHG reductions include CO 2 and CO 2 equivalents of CH4 , N2 O and HFCs.

### *** E.O. 12866 Review
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7 - 47 **Table 7**  **- 49**  **Annual Cost per Metric Ton of CO 2**  **eq Em issions Reduced in**  **the Preferred Alternative Vs.**  **The Less Dynamic Baseline and using**  **Method B Vocational Vehicles only (dollar values are 201**  **2$) a**  Calendar Year Vehicle &

Maintenance Costs ($Billions) Fuel

Savings ($Billions) GHG

Reduced (MMT) $/metric

ton w/o fuel $/metric

ton w/ fuel 2021 $0.7 $0.1 0 $1,500 $1,300 2024 $1.1 $0.6 2 $460 $210 2027 $2.0 $1.5 6 $340 $81 2030 $2.0 $2.8 10 $190
- $78 2035 $2.1 $4.7 16 $130
- $160 2040 $2.2 $6.1 20 $110
- $200 2050 $2.5 $7.3 23 $110
- $210 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 GHG reductions include CO 2 and CO 2 equivalents of CH4 , N2 O and HFCs. **Table 7**  **- 50**  **Annual Cost per Metric Ton of CO 2**  **eq Em issions Reduced in**  **the Preferred Alternative Vs.**  **The Less Dynamic Baseli ne**  **and using Method B**  **Tractor/Trailers only (dollar values are 2012$) a**  Calendar Year Vehicle &

Maintenance Costs ($Billions) Fuel

Savings ($Billions) GHG

Reduced (MMT) $/metric

ton w/o fuel $/metric

ton w/ fuel 2021 $1.4 $1.6 7 $210
- $30 2024 $2.1 $5.8 23 $90
- $160 2027 $2.6 $12.1 46 $56
- $210 2030 $2.7 $18.6 69 $39
- $230 2035 $3.0 $28.4 97 $31
- $260 2040 $3.3 $36.3 116 $28
- $280 2050 $3.6 $44.0 141 $26
- $290 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 GHG reductions include CO 2 and CO 2 equivalents of CH4 , N2 O and HFCs.

### *** E.O. 12866 Review
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7 - 48 **Table 7**  **- 51**  **Annual Cost per Metric Ton of CO 2**  **eq Em issions Reduced in**  **the Preferred Alternative Vs.**  **The Less Dynamic Baseline**  **and using Method B**  **All Vehicle Segments (dollar values are 2012$) a**  Calendar Year Vehicle &

Maintenance Costs ($Billions) Fuel

Savings ($Billions) GHG

Reduced (MMT) $/metric

ton w/o fuel $/metric

ton w/ fuel 2021 $2.5 $1.7 7 $330 $96 2024 $3.8 $6.9 28 $140
- $110 2027 $5.4 $15.1 57 $94
- $170 2030 $5.5 $24.0 88 $63
- $210 2035 $6.0 $37.2 127 $47
- $250 2040 $6.4 $47.8 152 $42
- $270 2050 $7.1 $57.5 183 $39
- $270 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 GHG reductions include CO 2 and CO 2 equivalents of CH4 , N2 O and HFCs. 

### For comparison, Table 7 - 52 through Table 7 - 55 show the same information as it was presented in Chapter 7 of the final RIA for the Phase 1 HD rule. 7
**Table 7**  **- 52**  **Annual Cost per Metric Ton of CO 2**  **eq Em issions Reduced in the**  **HD Phase 1 Final Rule HD**  **Pickups and Vans only (dollar values are 2009$)** Calendar Year Vehicle &

Maintenance Costs ($Billions) Fuel

Savings ($Billions) GHG

Reduced (MMT) $/metric

ton w/o fuel $/metric

ton w/ fuel 2020 $0,8 $0.9 3 $240
- $30 2030 $0.9 $3.0 10 $90
- $200 2040 $1.0 $4.3 14 $70
- $240 2050 $1.2 $5.5 16 $80
- $270

**Table 7**  **- 53**  **Annual Cost per Metric Ton of CO 2**  **eq Em issions Reduced in the**  **HD Phase 1 Final Rule Vocational Vehicles only (dollar values are 2009$)**  Calendar Year Vehicle &

Maintenance Costs ($Billions) Fuel

Savings ($Billions) GHG

Reduced (MMT) $/metric

ton w/o fuel $/metric

ton w/ fuel 2020 $0.2 $1.1 4 $50
- $210 2030 $0.2 $2.4 9 $20
- $250 2040 $0.3 $3.5 12 $30
- $270 2050 $0.4 $4.7 14 $30
- $310

### *** E.O. 12866 Review
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7 - 49 **Table 7**  **- 54**  **Annual Cost per Metric Ton of CO 2**  **eq Em issions Reduced in the**  **HD Phase 1 Final Rule Tractor/Trailers only (dollar values are 2009$)**  Calendar Year Vehicle &

Maintenance Costs ($Billions) Fuel

Savings ($Billions) GHG

Reduced (MMT) $/metric

ton w/o fuel $/metric

ton w/ fuel 2020 $1.0 $7.7 32 $30
- $210 2030 $1.1 $15.3 57 $20
- $250 2040 $1.4 $20.2 68 $20
- $280 2050 $1.8 $26.4 78 $20
- $320

**Table 7**  **- 55**  **Annual Cost per Metric Ton of CO 2**  **eq Em issions Reduced in the**  **HD Phase 1 Final Rule All Vehicle Segments (dollar values are 2009$)**  Calendar Year Vehicle &

Maintenance Costs ($Billions) Fuel

Savings ($Billions) GHG

Reduced (MMT) $/metric

ton w/o fuel $/metric

ton w/ fuel 2020 $2.0 $9.6 39 $50
- $190 2030 $2.2 $20.6 76 $30
- $240 2040 $2.7 $28.0 94 $30
- $270 2050 $3.3 $36.5 108 $30
- $310 

## 7.3 **Key Parameters Used in the Estimation of Costs and Fuel Savings**  This section presents some of the parameters used in generating expenditure impacts associated with the program . Table 7 - 56 presents estimated sales of complyingvehicles by calendar year. Table 7 - 57 presents AEO 2014 early release reference case fuel prices. Note that AEO projects fuel prices out to 2040. Table 7 - 58 presents AEO 2014 final reference case fuel prices which are used in Method A for analys is of HD pickups and vans. For that analys is, the retail (post
-tax) prices are increased for each year after 2040 b y 0.2 percent for gasoline and 0.7 percent for diesel. For years beyond 2040, EPA has kept fuel prices at the 2040 level rather than growing those fuel prices at a rate consistent with years prior to 2040. Table 7 - 59 shows the depreciation rates used in the pay back period analysis presented in Chapter 0 . Table 7 - 60 through Table 7 - 62 show the policy and reference case VMT values used in MOVES modeling.

### *** E.O. 12866 Review
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7 - 50 **Table 7**  **- 56**  **Estim ated Calendar Year Sales by**  **Vehicle Type**  **using Method B a** **, b** Calendar Year HD Pickup &

Vans Vocational

Vehicles Tractors Semi
-trailers 2018 601,428 508,986 152,323 181,264 2019 592,824 508,189 155,452 184,988 2020 588,718 511,308 159,221 189,473 2021 588,166 513,187 161,198 191,826 2022 588,277 518,192 163,719 194,826 2023 588,468 522,188 166,094 197,652 2024 595,880 538,609 171,770 204,406 2025 607,607 555,144 178,532 212,453 2026 622,297 570,707 185,102 220,271 2027 629,008 583,170 190,777 227,025 2028 635,564 592,507 195,631 232,801 2029 640,235 600,238 200,434 238,516 2030 645,344 606,945 204,610 243,486 2031 650,635 613,681 208,775 248,442 2032 656,130 620,670 213,612 254,198 2033 660,463 625,768 217,695 259,057 2034 665,671 633,244 222,677 264,986 2035 673,795 643,148 228,335 271,719 2036 680,860 651,588 233,285 277,609 2037 688,683 660,629 238,296 283,572 2038 697,131 670,643 243,855 290,187 2039 702,434 676,957 247,759 294,833 2040 706,025 682,097 251,554 299,349 2041 711,730 682,945 247,952 295,063 2042 718,283 689,604 251,409 299,177 2043 724,911 696,394 254,917 303,351 2044 731,657 703,351 258,472 307,582 2045 738,470 710,389 262,079 311,874 2046 745,352 717,507 265,734 316,223 2047 752,303 724,711 269,440 320,634 2048 759,313 731,984 273,199 325,107 2049 766,385 739,323 277,009 329,641 2050 773,523 746,732 280,872 334,238 Notes: a Sales are estimated using population data contained in MOVES. See Chapter 5 of this draft RIA for a description of the MOVES modeling done in support of this proposal. b For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

### *** E.O. 12866 Review
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7 - 51 **Table 7**  **- 57**  **AEO 2014**  **Early Release Reference Case Fuel Prices (** **2012$ /gallon)** 



### Pre - Tax Post- Tax Calendar Year Gasoline Diesel Gasoline Diesel 2018 $2.61 $3.07 $3.02 $3.53 2019 $2.62 $3.15 $3.03 $3.61 2020 $2.67 $3.22 $3.08 $3.67 2021 $2.71 $3.29 $3.12 $3.74 2022 $2.77 $3.37 $3.17 $3.82 2023 $2.82 $3.43 $3.22 $3.87 2024 $2.86 $3.48 $3.26 $3.92 2025 $2.89 $3.54 $3.29 $3.98 2026 $2.92 $3.59 $3.32 $4.02 2027 $2.96 $3.65 $3.36 $4.08 2028 $2.98 $3.69 $3.37 $4.12 2029 $3.01 $3.74 $3.40 $4.16 2030 $3.04 $3.79 $3.43 $4.20 2031 $3.08 $3.84 $3.46 $4.25 2032 $3.12 $3.89 $3.50 $4.30 2033 $3.16 $3.95 $3.54 $4.36 2034 $3.24 $4.02 $3.61 $4.43 2035 $3.27 $4.06 $3.65 $4.47 2036 $3.32 $4.11 $3.69 $4.51 2037 $3.36 $4.15 $3.73 $4.54 2038 $3.40 $4.19 $3.77 $4.58 2039 $3.47 $4.26 $3.83 $4.65 2040 $3.54 $4.34 $3.90 $4.73 2041 $3.54 $4.34 $3.90 $4.73 2042 $3.54 $4.34 $3.90 $4.73 2043 $3.54 $4.34 $3.90 $4.73 2044 $3.54 $4.34 $3.90 $4.73 2045 $3.54 $4.34 $3.90 $4.73 2046 $3.54 $4.34 $3.90 $4.73 2047 $3.54 $4.34 $3.90 $4.73 2048 $3.54 $4.34 $3.90 $4.73 2049 $3.54 $4.34 $3.90 $4.73 2050 $3.54 $4.34 $3.90 $4.73

### *** E.O. 12866 Review
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7 - 52 **Table 7**  **- 58**  **AEO 2014 Final Reference Case Fuel Prices Used in Method A Analysis for HD Pickups and**  **Vans (2012$/gallon)** 

### Pre - Tax Post- Tax Calendar Year Gasoline Diesel Gasoline Diesel 2018 $2.63 $3.10 $3.02 $3.53 2019 $2.64 $3.19 $3.03 $3.61 2020 $2.69 $3.25 $3.08 $3.67 2021 $2.74 $3.32 $3.12 $3.74 2022 $2.79 $3.41 $3.17 $3.82 2023 $2.84 $3.46 $3.22 $3.87 2024 $2.88 $3.51 $3.26 $3.92 2025 $2.92 $3.58 $3.29 $3.98 2026 $2.95 $3.62 $3.32 $4.02 2027 $2.99 $3.68 $3.36 $4.08 2028 $3.00 $3.73 $3.37 $4.12 2029 $3.03 $3.77 $3.40 $4.16 2030 $3.07 $3.81 $3.43 $4.20 2031 $3.10 $3.87 $3.46 $4.25 2032 $3.14 $3.92 $3.50 $4.30 2033 $3.18 $3.98 $3.54 $4.36 2034 $3.27 $4.06 $3.62 $4.43 2035 $3.30 $4.10 $3.65 $4.47 2036 $3.34 $4.14 $3.69 $4.51 2037 $3.38 $4.18 $3.73 $4.54 2038 $3.43 $4.22 $3.77 $4.58 2039 $3.49 $4.29 $3.83 $4.65 2040 $3.56 $4.38 $3.90 $4.73 2041 $3.57 $4.41 $3.91 $4.76 2042 $3.58 $4.44 $3.92 $4.80 2043 $3.59 $4.48 $3.93 $4.83 2044 $3.59 $4.51 $3.93 $4.86 2045 $3.60 $4.54 $3.94 $4.90 2046 $3.61 $4.58 $3.95 $4.93 2047 $3.62 $4.61 $3.96 $4.97 2048 $3.63 $4.65 $3.97 $5.00 2049 $3.63 $4.68 $3.97 $5.04 2050 $3.64 $4.72 $3.98 $5.07

### *** E.O. 12866 Review
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7 - 53 **Table 7**  **- 59**  **Depreciation Schedule used in Payback Analysis for Method B**  **a** Age Depreciation 0 0% 1 3% 2 7% 3 10% 4 13% 5 17% 6 20% 7 23% 8 27% 9 30% 10 33% 11 37% 12 40% 13 43% 14 47% 15 50% 16 53% 17 57% 18 60% 19 63% 20 67% 21 70% 22 73% 23 77% 24 80% 25 83% 26 83% 27 83% 28 83% 29 83% 30 83% Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

### *** E.O. 12866 Review
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7 - 54 **Table 7**  **- 60**  **Reference Case and Policy Case Vehicle Miles Traveled (VMT) For the Preferred Alternative relative to the Less Dynamic Baseline using Method B**  **Gasoline & Diesel Fueled HD Pickups and Vans**  **a** 

### Model Year Reference case Policy Case Rebound VMT 2018 115,829,944,373 115,829,944,373 0 2019 113,678,239,954 113,678,239,954 0 2020 112,489,612,844 112,489,612,844 0 2021 111,945,040,889 113,266,026,805 1,320,985,916 2022 111,677,755,878 112,995,512,359 1,317,756,481 2023 111,450,161,386 112,765,269,187 1,315,107,801 2024 112,709,425,730 114,039,351,705 1,329,925,975 2025 114,748,238,188 116,102,258,642 1,354,020,454 2026 117,275,813,888 118,659,694,470 1,383,880,582 2027 118,386,726,732 119,783,672,794 1,396,946,063 2028 119,534,232,399 120,944,733,432 1,410,501,033 2029 120,302,585,242 121,722,263,013 1,419,677,771 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 7**  **- 61**  **Reference Case and Policy Case Vehicle Miles Traveled (VMT) For the Preferred Alternative relative to the Less Dynamic Baseline using Method B**  **Gasoline & Diesel Fueled**  **Vocational Vehicles a**  

### Model Year Reference case Policy Case Rebound VMT 2018 118,450,357,579 118,450,357,579 0 2019 116,749,449,396 116,749,449,396 0 2020 116,127,003,082 116,127,003,082 0 2021 115,248,392,233 117,357,427,520 2,109,035,287 2022 115,272,965,194 117,382,447,329 2,109,482,135 2023 115,175,262,339 117,282,914,481 2,107,652,142 2024 117,884,442,538 120,041,702,114 2,157,259,576 2025 120,740,410,310 122,949,989,775 2,209,579,465 2026 123,305,465,962 125,561,901,338 2,256,435,376 2027 125,295,415,305 127,588,325,885 2,292,910,580 2028 126,961,637,088 129,285,065,704 2,323,428,616 2029 128,161,021,270 130,506,385,592 2,345,364,323 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 55 **Table 7**  **- 62**  **Reference Case and Policy Case Vehicle Miles Traveled (VMT) For the Preferred Alternative relative to the Less Dynamic Baseline using Method B**  **Gasoline & Diesel Fueled Tractor/Trailer**  **a** 

### Model Year Reference case Policy Case Rebound VMT 2018 205,633,186,090 206,868,892,110 1,235,706,020 2019 208,901,077,400 210,286,134,790 1,385,057,390 2020 212,879,741,190 214,425,143,290 1,545,402,100 2021 214,192,002,054 215,883,987,009 1,691,984,954 2022 216,140,641,720 217,848,264,966 1,707,623,246 2023 217,755,803,295 219,476,052,250 1,720,248,954 2024 223,503,856,041 225,269,560,066 1,765,704,025 2025 230,652,945,572 232,475,299,910 1,822,354,338 2026 237,271,789,952 239,146,338,666 1,874,548,714 2027 242,810,503,298 244,728,847,129 1,918,343,832 2028 247,759,768,627 249,716,945,459 1,957,176,832 2029 252,434,280,992 254,428,339,577 1,994,058,585 Note: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

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7 - 56 

# References

1 Light
-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rulemaking 75 Fed. Reg. 25323 (May 7, 2010). 2 Final Rulemaking to Establish Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium
and Heavy
- Duty Engines and Vehicles, Regulatory Impact Analysis, EPA
-420
-R- 11
- 901, August 2011. 3 All of EPA’s calculations of costs and benefits (monetized) along with payb acks can be found in the docket as “GHGHD2 NPRM Package Costs.xlsb,” “GHGHD2 NPRM BCA.xlsb,” and “GHGHD2 NPRM Payback.xlsb.” 4 Light
-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rulemaking 75 Fed. Reg. 25323 (May 7, 2010). 5 Final Rulemaking to Establish Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium
and Heavy
- Duty Engines and Vehicles, Regulatory Impact Analysis, EPA
-420
-R- 11
- 901, August 2011. 6 Final Rulemaking for 2017
- 20 25 Light
-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, Regulatory Impact Analysis, EPA
-420
-R- 12
- 016, August 2012. 7 Final Rulemaking to Establish Greenhouse Gas Emissions Standards and Fuel Efficiency Standard s for Medium
and Heavy
- Duty Engines and Vehicles, Regulatory Impact Analysis, EPA
-420
-R- 11
- 901, August 2011.