# From: <james.tamm@dot.gov>

To: <Chandana_L._Achanta@omb.eop.gov>

Cc: William Charmley/AA/USEPA/US@EPA

Date: 05/04/2012 02:01 PM

Subject: OMB Briefing on CAFE GHG - Presentation



# Hi Chandana,

Attached is the presentation for today’s briefing. As you know, the presentation contains pre-decisio nal and

deliberative information. The presentation should not be cited, quoted, or released until the final r ule is issued.

Jim

OMB_Meeting_on_Modeling_Inputs_CAFE_&_GHG_Final.ppt xCAFE-GHG 2017-2025 Final Rule1NHTSA-EPA Joint Briefing for Inter-AgencyMay 4, 2012NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewAgenda•Overview of Public Hearing and Written Comments•Schedule•NHTSA-EPA plans for modeling inputs:▫Flat versus increasing fuel economy baseline assumptions▫Technology costs/effectivenessbattery costseffectiveness for advanced engines and transmissionsmass reduction costs2Mild hybrid-electric vehicle technology▫New vehicle simulation work from NHTSA contractor Argonne National Laboratory▫Vehicle maintenance, repair, and other operating costs▫Manufacturing learning curve assumptions▫VMT growth estimations▫VMT rebound▫Inclusion of incentives in formal modeling (off-cycle credits, pickup truckcredits, EV/PHEV multiplier)▫Probabilistic uncertainty analysis▫Other updates for the FRM•Next StepsNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewBackground for today’s briefing•NHTSA and EPA have locked down technology and economicinputs and are working on the final rulemaking analyses. Theagencies have not finished internal agency discussionsregarding potential programmatic changes for the final rule.•Today we will providedetails regarding a number of technical3inputs to the analysis, many of which OMB requested, as wellas an overview of the public comments and issues.•We have also included the current schedule for thefinal rule•While today’s briefing is prior to the formal interagencyreview, EPA will be placing this material into thepublic docketonce the final rule is completedNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During Review•Nearly 400 testifiers across the 3 public hearings(Detroit,Philadelphia, San Francisco) in January•About 290,000 written comments received▫~140 comments submitted by organizationsOverview of Public Hearings & WrittenComments4▫Remainder are comments from individuals, mostly spurred bywrite-in campaigns, virtually all supportive•Strong support from most auto manufacturers, UAW, NGOs,consumer groups, citizens, military security organizations,state/local governments, auto suppliers.•See Appendix for summary of key comments by stakeholdersNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewSchedule**Milestone Date** NHTSA/EPA teams perform final rule modeling and analysis,draft responses to comments and the packageNow through early JulyFinal EIS Chapters 3-6 review by CEQ, OMB and EPA(cooperating agency) (6 days)June21-June 265(cooperating agency) (6 days)June21-June 26Final EIS Interagency review (3 days) June 27-June 29Final EIS issuedJuly 9EIS Notice of Availability published in Federal Register July 13Package to Interagency review (30 days) July 13-August 14SignatureAugust 15NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewFlat versus “market-driven” baseline projection•NPRM▫EPA and NHTSA both used a “flat” baseline for primary analysis, i.e., assumed that the reference casefleet inMY 2017-2025 would meet the MY 2016 standards without voluntary over compliance▫NHTSA also included a sensitivity case with a ”market-driven response” (increasing baseline, and sameapproach for all regulatory alternatives), including those technologies with a 1-year payback•Comments▫5 comments supported “flat” baseline: ACEEE, EDF, ICCT, NRDC, Sierra Club“Little or no” basis for increasing baseline without much higher fuel pricesEIA gasoline price projections for 2025+ are similar to today’s pricesConcern that accounting foran “market driven response” marketrole would reduce benefitsattributedto6Concern that accounting foran “market driven response” marketrole would reduce benefitsattributedtostandards▫5 comments on consumer valuation of fuel economy expressed as payback period:EDF and Sierra Club commented at least 5 yearNADA commented at most 5 yearVW commented less than 4 yearICCT commented 3 years▫CBD commented that one of the draft EIS analyses “suggests a much lower fuel efficiency increase driven solelyby market forces than actual experience demonstrates occurs. A University of Michigan study found an averageannual increase of 4.2% in an environment of low regulatory pressures”.•Plan for final rule▫EPA will continue to use a “flat” baseline▫NHTSA plans to assume a “flat” baseline (manufacturers will not apply more technology than needed tocomply with standards) for the primary analysis anda “market-driven technology application” as a sensitivitycase for technologies with a 1-year payback.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewLithium-ion Battery Costs for HEV, PHEV,and EVs: NPRM and Public CommentsNPRM•Agencies used peer-reviewed BatPac Model developed byArgonne National LaboratoryPublic CommentsGeneral comments that our battery costs were too low7•(Porsche) and too high (Tesla)•BatPaC model should allow for choice of either air or liquidcooling of battery (ICCT)•Beyond these high-level comments, no specific comments onthe use of the ANL BatPac model, or the modeling inputs usedby the agencies in BatPacNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewBattery Costs – FRM•Both agencies are using an updated version of theBatPaC model▫Updated model allows choice of air or liquid cooling▫Updated model allows for parallel modules and parallelpacks as well as parallel cells8▫We have included costs for a battery discharge system toallow for safe discharge of pack’s stored energy bydealers,road-side assistant companies, emergency responders, orothers as needed. These discharge system costs were notincluded in NPRM.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewEffectiveness for Advanced Engines andTransmissions – NPRM•Both agencies used the same effectiveness values for advanced ICengines, transmissions, hybrids, etc.•Effectiveness estimates were derived largely from vehicle simulation runsfrom the 2011 Ricardo report and modeling tool▫Ricardo is an international engineering firm with >1,600 consultants, engineers,9staff▫Primarily perform work for auto companies and suppliers, but also govt’s▫2011 report was a 2-year effort building on 2008 study used for 2012-2016 rule▫2011 report was peer reviewed at time of NPRM, andrecently Ricardopublished a high-level peer-reviewed technical paper at the 2012 Society ofAutomotive Engineers World Congress summarizing the2011 study•The effectiveness estimates include projections ofthese technologies intothe future, such as the engine maps for turbo-charged and cooled-EGRtechnologiesNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewEffectiveness for Advanced Engines andTransmissions – Public CommentsGeneral comments from industry – relates to all technologies•Given the considerable uncertainty about future technology development, cost and consumeracceptability, the proposed mid-term evaluation isessential in order to assure that the maximumfeasible fuel economy benefits are obtained in a cost-effective and safety neutral manner. (Alliance)Advanced engines•Uncertainty remains in the viability of high (27 bar) BMEP engines and obstacles are significant.Investigation has found effectiveness benefits arelower than agency estimates. (VW)10•The simulation modeling used to assess future technology benefits is conservative and futurebenefits will be larger than projected (ICCT – it should be noted that ICCT funded ~10% of Ricardostudy)•Engine maps used in simulation modeling for dieselsand cooled EGR gasoline engines are out of dateand have been surpassed by other sources, thereby underestimating effectiveness (ICCT)•The agencies diesel effectiveness estimates may beunderstated (L. Marz, private citizen)Advanced transmissions•No comments on the agencies’ transmission technologies or effectiveness estimatesNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewEffectiveness for Advanced Engines andTransmissions– FRM•EPA▫Final analysis will use the same effectiveness values as NPRM foradvanced engines and transmissions•NHTSA11▫The primary analysis for final rule will use the same effectivenessvalues as NPRM for advanced engines and transmissions.▫Transmissions with naturally aspirated engines will use lowereffectiveness based on Argonne National Laboratory (ANL)modeling.▫A sensitivity case analysis will be conducted using transmissionshift optimizer shift schedule effectiveness (lower effectiveness)based on ANL modeling on advanced engines with dual clutchtransmissions.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewMass Reduction Costs – NPRM•Both agencies used the same mass cost curve fortheir respective central analyses•Each agency performed sensitivity analysis usingmass costs + and–40% compared to the central12analysis•Agencies also discussed ongoing efforts looking atthe feasible amount of mass reduction and massreduction costs and expressed possibility of usingtheresults in the final rule.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewMass Reduction Costs – Public Comments•ICCT (who partially funded the new FEV mass study)stated that EPA’s mass costs studies (Lotus Engineering andFEV) should be considered in our analyses. They expect costs for the program will be less than expected due totechnology advancements.•Volkswagen states that mass reduction costs are underestimated▫VW stated “The NPRM predicts for large cars and some trucks upwards of 20% mass reduction potential.Volkswagenfeels that this may exceed cost effective limits.”VW supports 7-10% mass reduction in the regulationtimeframe.▫“The (exponential) function remains too conservative in its overall estimate of total price increase,i.e. the curve is too‘shallow’. Volkswagen maintains that above 10%, costs accelerate at a faster rate making reductions beyond this levelless economically practical.“ Significant capitalinvestment to upgrade to lighter material is of concern due toequipment’s longer useful lives.•VW stated “Volkswagen has had many successes in applying advanced technologies to our economy models as pricesand complexity decrease, but this process is lengthy and risky. “13•Mass reduction for smaller vehicles▫The Aluminum Association believes “advanced small vehicle designs will be developed using aluminum body andstructural components that will achieve significantweight reduction while preserving vehicle size andimproving safetyperformance.“•Some businesses did state that they were working onother mass reduction technologies.▫American Iron and Steel Institute & United Steel Workers – new steels and automotive manufacturing techniquescontinue to be developed and will enable significant increases in mass reduction▫SABIC – plastic fenders, plastic front end modules,polycarbonate glazing for roof and backlight applications andcomposite lift-gates▫Society of the Plastics Industry, Inc. (SPI) – plastics and composites in glazing, body panels and interior parts.▫Bayer Material Science – polycarbonate for headlamps, interior consoles and body panels•The Alliance stated there are uncertainties with Computer-Aided Engineering crash modeling with advancedmaterials that may possibly be available for mass production in the MY 2017-2025 time-frame .NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewMass Reduction Costs – FRM•Both agencies intend to use the identical cost curve asused in the NPRM in their respective central analyses•EPA and NHTSA both have new mass reduction studieswhich are undergoing peer review.The agencies will not14use the results from these studies in the central analysisfor the final rule because the peer review processandpotential response to comments is not complete.•We will discuss the results of these studies in thefinalrule, and may perform specific sensitivity assessmentsbased on their results.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewMild Hybrid Electric Vehicle Technology•For the NPRM, both agencies included two types of hybridization in ourmodeling▫12 volt start-stop systems and strong hybrids basedon the P2 configuration•Agencies did not explicitly model mild hybrids, though in the case of thefull-size pickup trucks we proposed to provide incentive credits for the useof this technology for 2017-202115•For the final rule, we have explicitly included mild-HEVs as one of theavailable technologies in our models, based on theE-assist mild HEVsoffered today by General Motors•Cost estimates based on scaling of similar components from the SaturnVue mild HEV tear-down costs and battery pack costsfrom the ANL BatPacModel•Technology effectiveness based on mild HEV system modeled usingArgonne National Laboratory Autonomie modelNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVehicle Maintenance & Repair Costs –NPRM•Maintenance costs/savings were not included in theNPRM analysis.▫We noted areas where maintenance costs and savingswerepossible but not quantified and requested comment.16•Warranty repair costs were included during the warrantyperiod as a component of the indirect cost multiplier, butnot for the post-warranty period in the NPRM.•The NPRM stated that there is a great deal of uncertaintysurrounding repair costs and that they were not includedin the modeling. NHTSA requested comment on howrepair costs might be quantify in the final rule.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVehicle Maintenance & Repair Costs –Public Comments•One substantive comment on operatingmaintenance costs, from the National AutomobileDealers Association (NADA)▫Payback analysis should include finance, opportunity,17and additional maintenance costs.▫The final rule should evaluate the potential impactona vehicle’s total cost of ownership.▫NADA cited their web site as providing informationregarding these costs, which also includes repair costsNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVehicle Maintenance & Repair Costs – FRM•Agencies performed a detailed review of existing owners manuals maintenancerequirements for a large number of vehicles with and without specifictechnologies▫For example, gasoline vehicles with and without turbochargers; gasoline versus dieselversions of the same vehicle model, gasoline and hybrid versions of the same vehiclemodel. We have used these to estimate changes in maintenance costs (labor + parts) fora number of technologies.•In general we were not able to find similar data regarding potential changes inrepair costs.18Approach for final rule•Maintenance costs to be included in all aspects ofthe analysis (BCA, payback) for:▫Low rolling resistance tires, diesel fuel filters,and many EV costs/savings (no oil or airfilter changes, etc.)•Warranty repair costs during the warranty period will be included, but postwarranty period repair costs will not be included.•EPA will discuss repair costs in the RIA but, due to lack of data, will not quantify▫Examples with some level of supportive informationwill be provided for how repair costsmay increase or decrease in the future.•NHTSA will include sensitivity case analysis of post-warranty period repair costsusing the same repair costs that are used for the in-warranty periodNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVehicle Simulation Work from NHTSA Contract withArgonne National Laboratory (ANL)•DOT contracted with ANL to provide full vehicle simulationmodeling support. Modeling was not completed in time foruse inthe NPRM, and NHTSA discussed in the NPRM its intentionto useANL modeling to validate/update technology effectivenessestimates and synergy factors for the FRM.•The ANL simulation model is used by OEMs, suppliers, government19agencies, universities, and research organizations•Simulation results were completed for transmission,electrification/hybrid, vehicle technologies (e.g. mass reduction andaero) and most engine technologies.•Mild hybrid results and transmission results incorporated into finalrule effectiveness values.•Other results may be used for the mid-term analysisNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewLearning Curve Assumptions – NPRM•Both agencies applied the same learning curve assumptions•One learning curve – technologies (i.e., their costs) liesomewhere on that curve, either the steep portion or the flatportion of the curve20•Nearly all technologies considered to be on the flat portion ofthe curve in the 2017-2025 timeframe•Those on the steep portion in the 2017-2025 timeframe:▫Batteries▫Lower rolling resistance tires level 2▫In-home EV/PHEV chargers▫Alternative refrigerantNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewLearning Curve Assumptions – PublicComments and Final RulePublic comments•No comments specific to our learning curve costreduction approach or estimates.21Final rule•Agencies will use same approach for estimatingmanufacturing learning-by-doing cost reductions aswas done in the proposed ruleNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVMT Projections -- NPRM•VMT schedules (per vehicle by MY and age)developed so that total NPRM VMT was consistentwith AEO 2011VMT distribution by age from National Household22▫Travel Survey (NHTS) 2001▫Vehicle survival rates from Polk NVPP▫Growth in per-vehicle VMT schedule back-calculatedto make total VMT consistent with AEO 2011NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVMT Projections– Public Comments•No public comments submitted on this topic.•Updates to NHTS, AEO, and Polk data available between proposaland final rule•AEO 2012 VMT projection is significantly lower than AEO 2011projection23NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVMT Projections -- FRM•Updated to AEO 2012 total VMT estimates▫Updated to 2009 NHTS for estimates of average VMTby age▫IncorporatedEIA data on fleet vehicle sales with NHTS24data on household vehicles to develop VMT estimatesfor entire fleet▫Updated survival rates to incorporate Polk registrationdata for 2007-2010•Adjusted per-vehicle VMT growth to correspond to AEO2012NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVMT Rebound -- NPRM•The agencies estimated a 10% VMT rebound effect for the centralanalysis▫Consistent with 2012-2016 rule and TAR▫Not derived from a single estimate or particular study, but insteadrepresents a compromise between historical estimates and projectedfuture estimates•We sought comment on new data and analysis, including onthe:25▫Potential that the actual rebound effect could be lower than estimatesin the literature if drivers respond more to changes in fuel prices vs.fuel efficiency, price rises vs. decreases, and price shocks vs. gradualchangesThere is some evidence of these types of asymmetricconsumerresponses in the literature▫Assumption that rebound effect estimates for conventional vehiclesalso apply for vehicles that use grid electricityNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVMT Rebound – Public Comments•International Council for Clean Transportation suggestedwe should rely solely on projected estimates thataccount for future incomes and fuel prices▫These estimates tend to be lower than 10% for the yearscovered by the rule26•Consumer Federation of America suggested using 5%,and not including rebound effect in “consumerpocketbook” analysis•Defour Group suggested using 20% or higherNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewVMT Rebound -- FRM•We will continue to use 10% in our central analyses▫NRPM rationale is still acceptable; commenters didnotprovide persuasive new evidence▫No response to our request for comment ondata/analysis regarding potential asymmetric27consumer responses or the assumption that therebound effect for conventional and electric-poweredvehicles is the same•Each agency will also include sensitivity analysisusing values on either side of 10%, as in the NPRM.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewExplicit modeling of cost and benefitimpacts of incentive and credit provisions•For the NPRM, agencies proposed a number of incentive andcredit provisions▫Off-cycle technology credits, including a pre-defined list▫Incentive credits for advanced technology full-size pickup trucks▫Multipliersfor use of EV/PHEV/Fuel cell vehicles (EPA only)28•The agencies estimated the increase in CO2 and fuelconsumption due to the potential use of the EV/PHEV/Fuel cellvehicle multipliers and the full-size pickup truckincentive, butwe were not able to estimate their impact on costs.•For the final rule, the agencies plan to include estimates ofboth the costs and benefits of these incentives, aswell as theimpacts of several of the off-cycle technology credits.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewProbabilistic uncertainty analysis of costsand benefits - NPRM•Both agencies analyzed the sensitivity of a numberof benefits and costs tovariation in the values of certain assumptions andinputs, including thefollowing:▫NHTSA – discount rates, fuel prices, SCC, rebound effect, consumers’ valuation offuel economy benefits, military security, battery costs, mass reduction costs,29market-driven fuel economy improvements (sometimesreferred to as voluntaryover compliance), and the indirect cost markup factor▫EPA – SCC, discount rates, rebound effect, battery costs, mass reduction costs, theindirect cost markup factor, and the cost learningcurves•NHTSA also performed a probabilistic uncertainty analysis examiningsimultaneous variation in the major model inputs including technology costs,technology benefits, fuel prices, the rebound effect, and military securitycosts.▫EPA referenced this analysis in the NPRM as generally reflective of the uncertaintypresent in the EPA assessmentNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewProbabilistic uncertainty analysis of costsand benefits– Public comments and FRMPublic Comment•No comments directly on NHTSA’s probabilistic uncertainty analysis•Bastani,et. al(MIT) submitted probabilistic analysis using stochastic model indicating lowlikelihood that standards will be achieved.▫Analysis was not a formal quantitative analysis ofthe relevant uncertainties about benefits andcosts, more about trying to predict manufacturer behavior in meeting the standards in light of30uncertainty surrounding various parameters (tech effectiveness, fuel prices, demand, marketdeployment of new tech and alt fuels), argues for accounting for uncertainty when analyzingfuture fleet.Final Rule•NHTSA – Similar approach to the NPRM.Will conduct additional sensitivity analyses: post-warranty repair costs, transmission shift optimizereffectiveness based on Argonne National Laboratorymodeling, social cost of non-CO2 GHG emissions(CH4 and N2O)Probabilistic uncertainty analysis will be similarto the NPRM.•EPA – similar approach to that used in the NPRM, wewill include a number of sensitivity analyses and ifappropriate point to the NHTSA Monte Carlo analysisas generally representative.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewOther inputs that are changing betweenNPRM to FRM•Fuel prices updated to AEO 2012 early release•Analysis of two baselines:▫NPRM’s 2008 baseline fleet with CSM projections market share/modelmix, and AEO 2011 sales volumes and car/truck split▫New 2010 baseline fleet with JD Powers projectionsof marketshare/model mix, and AEO 2012 sales volumesand car/truck split31•Energy security benefits updated based on AEO 2012 early release•Electricity upstream emission factors▫NPRM based on national average IPM estimate▫NHTSA FRM using mix based on NEMS modeling (consistent with AEO2012 early release). Will include a primary analysis, and sensitivitycases in the EIS using upper and lower bound estimates.▫EPA FRM using marginal estimate based on updated IPM modeling•Social cost of carbon – continue to use inter-agency values tomonetize CO2 for primary benefits analysis, but for non-CO2 GHGsshow side analysis based on GWP-weighted approach.NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewAppendix32NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewManufacturers•Broad support for the standards reiterated by OEMswho signed July support letters•Of larger manufacturers, VW & Mercedes argue that passenger car standards are relatively toostringent and a slower ramp-up is needed; light truck standards too lenient.•Several limited-line, intermediate volume manufacturers suggested additional leadtime phase-inconcepts•Nearly all OEMs and associations stressed importance of mid-term review due to long time-frame ofstandards and uncertainty in assumptionsEnvironmental GroupsOverview of Key Comments, continued33•Most national NGOs support overall scope of the proposal – but many recommendations to ensurebenefits not eroded•Concerned with treatment of trucks relative to cars; midterm should not result in relaxation ofstandards; need for backstop standards•Center for Biological Diversity provided comments that proposed standards do not go far enough(recommended 60-70 mpg in 2025)Public•At hearings, numerous enviro/health/faith/veteransgroups and ~300 individuals testified in support ofprogram. Themes:▫Need to address climate change, energy independence, national security▫Ensure final standards don’t include “loopholes” toweaken benefits▫Money saved at pump helps consumers’ pocketbooks &can be reinvested in local economy▫Standards can spur innovation & create jobsNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During ReviewNational Automobile Dealers Association (NADA)•Commented there is no need to set 2025 standards sofar in advance -- suggest wewait to conduct rulemaking in 2014 and set standards for MY2017-2021/22 only; EPAneed not set standards because NHTSA can achieve similar benefits under the CAFEprogram•Commented the agencies’ cost projections are significantly underestimated•Concern that lower income consumers will not be able to secure a loan and be pricedout of new car market, delaying GHG and oil savingbenefitsOverview of Key Comments, continued34•Commented the agencies’ analyses should include operating costs•Commented EPA significantly underestimated cost ofHD engine emission standards•Encouraged agencies to provide better consumer information on payback (e.g., onlabel)Consumer Groups•Commented consumers will benefit greatly from standards – consumers save moneyand decrease the cost of driving; increased consumer vehicle choices will providemore fuel efficient and alternative fuel options•Commented dealers’ concerns are unfounded -- independent analysis and nationalsurvey demonstrate strong consumer support across all income levelsNHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During Review•State organizations (NACAA and NESCAUM) supported theproposaland its significant benefits▫Concern that the less-stringent standards for trucks could underminebenefits, if fleet shifts from cars to trucks.▫NESCAUM (Northeast states) also believes we shouldconsider 6% annualreduction--viable to push the fleet to increase EV/PHEVsOverview of Comments, continued35•UAW expressed strong support -- believes program will leadtosignificant net job creation•Fuel providers commented that EPA should provide incentives forvarious alternative fuels, such as biofuels and CNG•Letters of support from 30 U.S. Senators (Feb. 15)and 48 U.S.Representatives (Nov. 15)NHTSA and EPA Pre-Decisional Deliberative Materialsfor Interagency Review – Do Not Cite, Quote, or Release During Review