1Question #/ TOPICResponsibleAgencyOMB CommentProposed Response1.Emissions forElectric VehiclesEPAInteragency reviewers recommend that the agenciesaccept comments on a more complete range of issuesregarding what emissions information to include on thelabel, how to calculate emissions data, and how topresent it.•Forthcoming2.Objective LanguageEPACommenters recommend that the agencies modifylanguage that may be perceived as trying to manipulateconsumers into making certain consumption decisionsthat the Administration viewsas socially desirable froma policy perspective.2Instead, the rule should bedescribed as an objective attempt to provide more andbetter information to consumers so that they can moreeasily assess the true costsand emissions of differentvehicles and make fully-informed decisions. Theagencies should not imply that consumers who do notbuy more fuel efficient vehicles are making poorerdecisions, when it may be their preference to do so evenwith more information. Please make these revisionsthroughout the entire document.•The agencies willupdate language in thepreamble in appropriate places to insureobjectivity.3. Median BaselineVehicleEPAWhat alternatives did the agencies consider in decidinghow to help consumers compare vehicles? The currentproposal to shift each year’s median vehicle mightmake it very difficult or even misleading whenconsumers are comparing identical vehicles butdifferent model years. A new model year vehicle mighthave lower ratings and costsavings than the previousyear model year even if it ismore efficient because ofthe shifting median vehicle. Do the agencies think thiscould be problematic?•The agencies understand the concernsexpressed in this comment. However,there is no perfect choice here and wethink using each year's median vehicle forcomparison is the best choice as theunderlying assumptions need to be up-todate to be most useful to consumers.When the Agencies conduct focus grouptesting post-proposal, we will continue toprobe on this and other underlyingassumptions issues.2•We will invite comments on the issuesraised by the commenter. In addition, wewill review this section II.A. 4 and II.A.10.of the preamble again and determineif we need to more explicit in thediscussion.4. Display of ModelYearEPAUnder the grading scale, the model year of a vehicle isextremely important because the relative metrics areupdated every year. The agencies should thereforesolicit comments on whetherto highlight the modelyear more prominently on the label. Also, the agenciesshould consider – in greater detail – that consumersmay want to compare essentially identical vehicles, butfor different model years. As described above, under theupdated grading scheme, the newer vehicle could havea lower grade even if it is more efficient than an oldermodel, due to a different baseline for the grading scale.A similar condition could exist for the presentation of“fuel savings” information.•Model year is clearly marked on the top ofall Monroney labels. Since the FE labeland the NHTSA safety label are bothincorporated into the overall Monroneylabel, it would be duplicative to requiremodel year on the fuel economy label aswell. Many consumers keep the entireMonroney label, since it has additionalinformation on the vehicle. The ideal wayto compare a new vehicle with an oldervehicle is with www.fueleconomy.gov.5. Half letter upgradefor PHEVSEPACurrently, the rule allows all vehicles to receive a half aletter grade upgrade if theyperform well on “other HGemissions” except for PHEVs. The agencies state thatPHEVs are excluded from receiving an upgrade if theyare eligible to receive it because they want only EVs toget the A+ rating. PHEVs get an A for just the CO2emissions and if they perform well on other GHGemissions, could get an A+. Excluding PHEVs fromgetting this upgrade might notlevel the playing field.Have the agencies considered implications from notallowing for a leveled playing field? Commentersrecommended that the agencies not exclude PHEVs•The agencies are not proposing the half aletter upgrade/downgrade for criteriapollutants, simply asking for publiccomment on the option, as well as onseveral other optionsrelated to the lettergrades•We propose adding the sentence in red tothe relevant draft preamble text from page44 (Section II. A.7): "However, to ensurethat only those vehicles with the highestfuel economy and lowest greenhouse gasemissions receive the best rating, the3from getting this half letter upgrade if they are eligibleto receive it.system would be adjusted so that vehiclesfrom the next group down would not bepromoted to the highest ratings based ontheir air pollutant levels. In other words,under the letter grade system, vehicleswould not be able to move from an A to anA+ grade if they werecertified to bin 2 or3. Therefore, only those vehicles that areeligible for the highest rating based fueleconomy and CO2 would receive the bestpossible rating, which would then servethe purpose of designating the highest fueleconomy/lowest GHG vehicles. Thepractical effect of this approach is thatonly electric-powered vehicles would beeligible for an A+ rating. The agenciesseek comment on whether separate ratingsshould be provided for other emissions orwhether a single combined letter graderating for fuel economy, GHG and otheremissions should be provided."6. Overall MonroneyLabel ImpactsEPAHow would changes from this NPRM impact othercomponents of the Monroney label? What is the relativesize of the fuel economy component compared to thesafety ratings component? How might the difference insize of the various components influence consumerperception about other vehicle attributes -- such assafety?•The proposal does seek comment on theeffects that the proposed label may haveon other Monroney label information, suchas the safety ratings. See excerpt fromproposal in Section IV.E. page 128: "Theagencies also seek comment concerningthe potential for the new label informationto create confusion about otherinformation found on the Monroney Label,in particular, the star safety ratings.4Specifically, the agencies seek commenton whether consumers might interpret thelarge letter grade on Label 1 as applying toother aspects of the vehicle’s performance(such as safety) besides fuel economy andenvironmental impacts. To mitigate thisconcern, the agencies have created aprominent black border and title indicatingthe purpose of the information.Nevertheless the agencies seek commenton whether additional measures should berequired under 32908(b) and (g) to addressthis potential confusion.•The agencies also seek comment onwhether the co-proposed labels, inparticular Label 1 with its use of color andlarge font for the overall letter grade,might inadvertently distract consumersfrom the black-and-white star safetyratings. As one way of addressing thispotential issue, NHTSA proposes torequire under 49 CFR 575.301 that the starsafety ratings be located as close asphysically possible to the new fueleconomy and environmental label to helpensure that the starsafety ratings do notget “lost” on the Monroney Label.Similarly, the agencies seek comment onwhether their regulations for the new fueleconomy and environmental label shouldrequire that it be located as close as5physically possible to the star safetyratings."7. Explain text on p.29- cumulative cap onupstream emissionsEPA•The phrase referenced in the interagencycomments is not on page 29 and we do notbelieve it is anywhere in the Preamble•The phrase on page 29 is "cumulativeproduction cap per manufacturer" and thisrefers to the provision in the MY2012-2016 light-duty vehicle GHG rule thatestablishes a threshold for the cumulativeproduction (or sales) for an individualmanufacturer during the MY2012-2016timeframe, below which they can use azero gram per mile compliance value forEVs, and the electricportion of PHEVs,and above which they must use acompliance value based on a full netupstream GHG emissions accounting. Thethreshold is 200,000 vehicles formanufacturers who sell less than 25,000EVs/PHEVs/FCVs in MY2012, and300,000 vehicles for other manufacturers8. Label TitleEPACommenters recommended that the agencies use “GHGPerformance” instead of“Environment” on the labelitself because the agencies are only considering GHGimpacts. It is more accurate to refer to it as GHGreductions instead of “Environment.” Please make thischange in the NPRM as well.•The title on both co-proposed labels, “FuelEconomy and EnvironmentalComparisons” refers to all environmentalinformation on each label, bothperformance metrics and ratinginformation, and does not solely refer togreenhouse gases butincludes otheremissions as well. The agencies believe6the title is appropriate and helps alertconsumers to all the environmentalinformation available on each label.9. List of acronymsneededEPAIt would be helpful if the proposed rule included a listof acronyms at the beginning of the document.•The agencies have prepared a list ofacronyms for inclusion in the preamble.10. Effect onaftermarketEPACould the agencies please clarify whether the proposedrule would affect “aftermarket” manufacturers (firmsthat purchase passenger cars or light trucks) andcustomize them for (re)sale. Would these firms berequired to provide a label when they resold thevehicle? (Commenter asked this because theseaftermarket” firms are likelyto be small businesses, andif they are covered by the ruleneed to be included in theRegulatory Flexibility Act (RFA) analysis.)(Commenter notes that Sec. 600-316-08 says that the“final stage” manufactureris treated as themanufacturer for purposesof compliance withthe rule.)•Because the “aftermarket” term coversseveral different types of modifications,the response to whether the FE labelingrequirement applies is different for eachsituation. The different “aftermarket”situations are as follows:1) Independent Commercial Importers (ICIs);ICIs are companies that imports cars fromoverseas either because the owners are movingto the U.S., or because the vehicle is nototherwise available inthe U.S. (e.g., highperformance sports cars and right-hand drivepostal vehicles). Under EPA’s currentregulations, such imported vehicles arerequired to be emission-certified and have aFE label. Small business ICIs are included inour Regulatory Flexibility Act (RFA) analysis.2) Alternative-fuel converters; Under EPA’scurrent regulations, alternative fuel convertersare not subject to the FE labelingrequirements. We are not proposing anychanges for alternative-fuel converter with theFE label proposal. Therefore, small businessalternative-fuel converters are not included inour RFA analysis.73) Manufacturer-approved modifications(e.g., limousines); Some car manufacturerscertify vehicles that allow for aftermarketcompanies to modify the vehicles up to acertain weight limit and still be covered by theemissions certificate. The car manufacturersalso provide fuel economy information to theaftermarket companies with the correct FEestimates for the modified vehicles (based onthe weight of the modified vehicle). UnderEPA’s current regulations, an aftermarketcompany does not need to certify foremissions as long as they do not exceed theweight limit specified by the car manufacturer,but they do need to put a revised fuel economylabel on the modified vehicle (if themanufacturer provided FE estimate changesfrom the non-modified version of the vehicle).We are not proposing any changes to theseprovisions with theFE label proposal.Therefore, small business aftermarketconverters covered under manufacturerapproved modifications, such as limousinemanufacturers are regulated parties and shouldbe included in our RFA analysis. We willadjust the text in the RFA section to reflectthis.4) Other types of modifications: Under anEPA Advisory Circular (Number 64 fromMarch 1977) that clarifies EPA’s position on8tampering, aftermarket companies may modifya vehicle from it certified configuration aslong as they do not add more than 500 poundsof accessories to the vehicle and as long asthey do not modify the exhaust or evaporativeemission control systems in any manner. Insuch cases the aftermarket company is notrequired to obtain a separate emissionscertification or put their own FE label on thevehicle. Therefore, small business aftermarketcompanies engaged in such minormodifications are notincluded in our RFAanalysis.•We do not believe we need to make anychanges to the proposal to address the“aftermarket” issue because we havealready included the one type of“aftermarket” situation where a new FElabel is required (i.e., ICIs) in our RFAanalysis/discussion.11. RFA andautodealersEPAThe RFA analysis/certification should also include“auto dealers,” as the rule (Subpart E, Sec. 600-405)requires them to ensure thatlabels are in place and toobtain, display, and make available to consumers theFuel Economy Guide (comparison booklet).Commenter assumes these costs are de minimus, soincluding them in the RFA analysis could be done in abrief sentence or two (but theyshould be included in theanalysis and table of regulated entities).•We agree that “auto dealers” haveresponsibilities under the existing FElabeling regulations. However, theproposal does not add any newrequirements to these responsibilities, sothere is no incremental impact on “autodealers” due to the proposed rule.•We will revise our list of regulated entities(in both the introductory section of thepreamble, see “SUPPLEMENTARYINFORMATION: A. Does this Action9Apply to Me?” and the RFA section, seesection VIII.B.3, Table VIII.B.3-1) to addin “auto dealers”.•We will also add discussion in the RFAsection of the preamble that notes there isno incremental impact on “auto dealers”due to the proposed FE label regulations.12. Font size of MPGvs. GMP Label 2EPAThe NPRM does a great joboutlining the benefits ofgallons per mile instead ofmiles per gallon. But thenlabel 2 has MPG in huge font(the biggest on the label)and GPM in tiny font. And allthe labels have the sliderbar as MPG rather than GMP. Commenter understandsthat people now are used tothe concept of MPG, butdid the agencies considergradually transitioning thelabel from emphasizing MPG to emphasizing GPM?Commenters could imagine, for example, the relativefont sizes or placements changing over a decade.•The agencies did consider increasing theprominence of GPM over time. Theagencies agree to take comment on thisissue in section III.A.2.We will add thefollowing language to this section:“The agencies are seeking comment aboutwhether to gradually increase the prominenceof gallons per hundred miles to facilitate theconsumer familiarity and usage of aconsumption metric.”13. p. 30 AC LeakageEPAOn page 30 of the preamble there is a discussion onusing A/C leakage adjustments in the determination ofGHG emissions. If this option were adopted would it beinconsistent with labeling the emission as “tailpipeemissions”? Wouldn’t including A/C leakageadjustments also lead to widening the gap between whatis on the label and what consumers get in the “realworld”?•The agencies are not proposing to allow anA/C leakage adjustment, only asking forcomments•We agree to seek comment in the preambleon the issue raised by the interagencycomment: “Would including A/C leakageadjustments lead to widening the gapbetween what is on the label and whatconsumers get in the real world”.14. p. 66EPAOn page 66 in the forth sentence of the last paragraph,the word “actually” should be replaced with “typically”as shown below. This change would make the sentenceconsistent with the discussion preceding this sentenceWe will make this proposed language changein the preamble: “While the E85 mpg valuesare lower than the gasoline mpg values, theuse of E85 isactuallytypicallyslightly more10and corresponds to DOE’s findings in testing E85-FFVsenergy efficiency and fuel economy. “While the E85mpg values are lower than the gasoline mpg values, theuse of E85 isactuallytypicallyslightly more energyefficient than the use of gasoline.”energy efficient than the use of gasoline.”15. p. 67 methodologyfor assigning ghg valuefor FFVsEPAOn page 67, the proposed methodology for assigning anoverall combined value for greenhouse gas emissions orfuel economy for FFVs based on the fraction ofalternative fuel currently in use seems uninformative forconsumers. Especially withFFVs, it is unlikely that anyindividual consumer uses the national average fractionof alternative fuel. Possiblyderiving a merged value fora clearly stated percentage of the alternative fuel (say10% or 25% E85 usage for an FFV) would be of morevalue to the consumer.•The agencies are specifically seekingcomment on this issue. The proposal, onpage 68, is not to use the national averagefraction of E85 use (currently about 99%gasoline/1% E85), butrather to use 100%gasoline use as the default value, sincemost flexible fuel vehicle owners are usinggasoline all the time. However, theproposal does allow a manufacturer to usea different gasoline-to-E85 mix if it canprovide data to show that its flexible fuelvehicles are in fact using this different fuelmix, on average, in use. This proposedapproach is consistent with that used forflexible fuel vehicle GHG emissionscompliance under the EPA GHG standardsfor 2016 and later model year vehicles.16. labeling option forE85-FFVEPACombined fuel economy labeling options for E85-FFVand diesel vehicles: It is notclear from the discussion ifthe combined FE ratings for diesel and E85-FFVvehicles would be on a gasoline equivalent basis or aper gallon basis of diesel or E85. DOE’s believes itwould be more useful to consumers if the combined FEratings for diesel and E85-FFV vehicles were on adiesel or E85 volumetric basis since these fuels are alsosold on a per gallon basis. However, it is appropriate for•With respect to E85 flexible fuel vehicles,on page 67 the proposal discusses both thempg (volumetric) and mpg-e (gasolineequivalent) metrics and asks for publiccomment on whether to use one of these orboth. With respect to diesel, the proposalis silent on this issue,and our intention isto continue to report diesel mpg on avolumetric basis as has been the case in11the combined FE ratings for non liquid fuels such asCNG and electricity to be on a gasoline equivalentbasis.the past. We will add the following sectionII.C.4 to address this issue for diesels:"EPA proposes to continue to calculate thefuel economy of diesel vehicles in milestraveled on a gallon ofdiesel fuel. Dieselfuel has a long history of being sold on avolumetric basis, and the energy contentdifferences between a gallon of gasolineand a gallon of diesel fuel are relativelysmall."17, Saves/SpendDisclosure IssuesEPALabel 1 “Saves/Spend” Disclosures: For vehicles withbelow-average economy, proposed Label 1 woulddisclose the additional cost of fuel as compared to theaverage vehicle. Forexample, the disclosure on Figure III-5 states “Overfive years, you willspend $3,600more in fuel costs compared to the average vehicle.”Similarly, for above averagevehicles, Label 1 containsa savings claim (e.g., “Overfive years, this vehiclesaves$5,700in fuel costs compared tothe average vehicle”).These disclosures present severalpotential problems. First,commenter expects that manyconsumers will interpret the“spend” disclosure to be a representation of totaloperating cost withoutrealizing thatfigure is only a portion of that total. In addition, thebasis for the saves/spend disclosure isfive years of operation while, elsewhere on the label,the basis for the total operating costdisclosure is one year ofoperation. This may cause•The Expert Panel felt strongly that savingsis a much more powerful message thancost. The Agencies recognize that there areopportunities for consumers to misspertinent information, such as the meaningof “spend” and the fact that this valuerepresents a five year estimate. However,the Agencies also sought to follow theOMB June 18, 2010 memorandum whichcalls for simple summary disclosures.•The commenter stated,“The saves/spendfigures compare to an “average vehicle”that may not be in a consumer’s decisionset, these figures may not be particularlyuseful to many consumers.”In selectingthe median vehicle, the agencies intendedit to be a reference point for consumers.Unfortunately, it is not possible to have avalue on the label that is compared tospecific vehicles that a consumer is12confusion. In addition, weexpect the five yearassumption will be lost on many consumers. Finally,because the saves/spend figures compare to an “averagevehicle” that may not be ina consumer’s decision set,these figures may not be particularly useful to manyconsumers. Given these concerns, the “saves/spend”disclosure should be testedfor these potential problems.Commenter notes that FTC has found through onsumerresearch that the annualoperating cost provides auseful, straightforward disclosure that allows for easycomparisons among all products (regardless of size andconfiguration). Commenterrecommends that EPA andDOT consider displaying the annual operating costfigure prominently in lieu of the problematicsaves/spend disclosure. Such achange is likely to makethe label clearer, simpler to read and less cluttered.considering. However, the agencies intendto have specific comparison capabilitiessuch as this on a website, allowingconsumers to personalize their drivinghabits and vehicle comparisons. Theagencies are taking comment on otherways to demonstrate five year savingscomparisons (see Page 48, SectionII.A.10)•The agencies are committed to postproposal engaging with FTC to explorethe additional research referenced in thiscomment. In addition, the agenciesbelieve both Internet Survey that will beconducted as well as additional focusgroups which are contemplated postproposal will provide additional usefuldata on this issue.•We will seek comment on the issues raisedby FTC and include new preamblelanguage as in Section II.A.10 p. 48beginning after, “The agencies seekcomment on this and alternativeapproaches, as opposed to the proposedapproach of displaying a vehicle’s fuelcost savings relative to the median vehiclein the fleet.” “ The agencies are alsoseeking comment on whether there is apotential of consumer confusion caused bythe two different costs values displayed on13Label 1 with regard to the estimatedannual fuel cost of operating the vehicleand the 5 year fuel cost savings numbercompared to the average vehicle. We areinterested in receiving comments on howthese values may interact with each otherand we intend to explore this issue furtherprior to finalizing this proposal includingexploring research conducted in executivebranch agencies.”18. Environmental &Combined MPG ScalesNHTSAEnvironmental and Combined MPG Scales: The threesmall scales on Label 1 (combined MPG, CO2, and AirPollutants) are difficult to read and clutter the label.Accordingly, commenter suspects that consumers willhave difficulty understanding these scales and theirpresence may detract from other label information. Tothe extent that such rating scales are required under thestatute, commenter suggests that EPA and DOTconsider whether the simpleletter rating on Label 1meets such requirements. If they do, commenterrecommends that these small scales be removed fromthe label. This would increase label space and allow thesize of the disclosures abovethe ranges to beincreased.Similarly, to the extent that environmental impacts arecollinear with fuel economy, commenter suggests thatEPA and DOT consider consolidating information (orsignificantly reducing the prominence of environmentaldisclosures) wherever possible to reduce clutter. Forexample, the greenhouse gas and air pollutant scales inLabel 2 could be eliminated or made less prominent tosimplify the label and make it easier for consumers touse.•The agencies believe they have alreadyaddressed this comment please seeattached document with excerptedlanguage from preamble.1419. p. 61-FTC LabelReferenceEPAFTC Label Reference: On page 61, the term “hang tag”should be replaced withthe term “label.”•The agencies will make the requestedpreamble language change.20. Overall RatingutilityNHTSASome commenters questioned the utility of the overallsummary rating because it does not by itself provideuseful information to consumers. Have the agenciesconsidered increasing the font of information thatconsumers might find more useful and decreasingthe font of the overall summary rating that might notprovide any useful information?•Please Pages 24 and 25 of the Preambleregarding thisdiscussion.21. Should any carreceive an A+EPASome consideration should be given to the question ofwhether any car ought to receive a grade of A+. Theremay be undue psychologicaleffects on consumers’environmental choices. Consumers might get theimpression that their environmental obligations arefulfilled after getting an A+car. In addition, people tendto drive more miles if they think their car is more fuelefficient, and so if someone is led to believe their carhas NOenvironmental impact, then who knows howthey’ll change their behavior. In fact, there•The agencies believe that an 11 stepgrading scale is important and providesnecessary differentiation that will beuseful to both consumers andmanufacturers. The agencies agree toadd language to the preamble specificallyinviting comment on this issue.22. GHG performancebased on tailpipemisleading bias againstethanol or biodieselEPABiofuel issues•These comments raise many issues, allinterrelated•One primary thrust of the comments--that we should consider upstreamGHG issues--is addressed by oursuggested changes to the Preamble aspart of our response to Comment #1 onEV emissions issues•A second thrust of the comments--thatwe should show energy andenvironmental performance on E8523.Alt Fuel Labelsshould include info ongasoline savings inaddition to fuel savings24. p.28, SecII.3-upstream emissionsissue25. SectionII.3proposed language15addition from RFS factsheetfuel--is already addressed in the draftPreamble as on page 67, in both thethird and fourth paragraphs, theagencies discuss the option ofproviding E85-specific information,and we ask for public comment on allof the E85 flexible fuel vehicle options•EPA is opposed to any changes to theproposed labels, though that does notpreclude changes being made betweenproposal and a final rule, of course.p. 29 suggested langchange to include RFSlanguagep. 57-adding upstreamemissions languagep. 58 – upstream langp. 66 – suggest addingco2 reduction fromcombusting E85 fuelsalongside tailpipe CO2p.71 – Renewable fuelslbenefits- add info tolabelPages 12-16(alternative labels)

# Internal EPA and NHSTA—Under Revi ew ... Do Not Distribute...8/11/2010



# Rank Order of Ten Lowest-GHG Vehicles Unchanged

Under Both Tailpipe-Only and Ta ilpipe Plus Upstream Approaches

Proposal--Tailpipe-Only Tailpipe + Upstream

Vehicle CO2/mile Grade CO2/mile Grade

Nissan Leaf EV 0 A+ 197 AChevrolet Volt PHEV 89 A 210 AToyota Prius PHEV 133 A 217 AToyota Prius HEV 178 A- 224 AHonda Civic HEV 212 A- 266 AHonda Insight HEV 217 A- 273 AFord Fusion HEV 228 A- 287 ASmart 247 B+ 311 B+

Lexus 250h HEV 254 B+ 320 B+

Nissan Altima HEV 261 B+ 329 B+

Key Assumptions

• Leaf EV, Volt PHEV, and Prius PHEV all assumed to use 200 Watt-hours per

mile when operating on electricity over the EPA test and assuming a 30% range

(43% electricity consumption) shortfall fr om test to road; EPA has not certified

any of these vehicles and therefore does not have formal test data on these

vehicles. This is the best information available.

• Volt PHEV assumed to operate on electricity 50% of the time.

• Prius PHEV assumed to operate on electricity 25% of the time.

• Uses 2005 nationwide average value of0.642 grams of upstream GHG per Watthour at powerplant (adjusted to in clude GHG emissions from feedstock

extraction, transportation, and processi ng as well) from MY2012-2016 light-duty

vehicle GHG final rule (75 Federal Regi ster 25437). See separate docketed

memo to docket and spreadsheet which provides emissions factor for this

analysis.

• Assumes typical 7% electricity grid transmission losses.

• Uses 2250 grams upstream GHG per gallon of gasoline – consistent with value

used in the light duty 2012-2016 GHG final rule.

• Our proposal does not incl ude a rating scale for tailpipe + upstream GHG

emissions. The grades we have assigne d in the above table for “tailpipe +

upstream emissions” assumes an "equal incr ements of CO2" scale identical in

approach to that used in the proposal’s tailpipe-only scale.