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Ready to go on a wonky ride?
#ChastenYourSeatbelts
Let's #LearnAboutDOT's role in setting fuel economy standards for "light duty vehicles" (cars, SUVs, light trucks)
(1/18)
Ready to go on a wonky ride?
#ChastenYourSeatbelts
Let's #LearnAboutDOT's role in setting fuel economy standards for "light duty vehicles" (cars, SUVs, light trucks)
(1/18)
Why care about this?
To prevent catastrophic climate change, the world needs to reach net zero emissions by 2050.
Transportation accounts for 28% of US emissions.
Fuel economy standards are one tool to help curb these emissions.
(Source: https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions#transportation)
(2/18)
To prevent catastrophic climate change, the world needs to reach net zero emissions by 2050.
Transportation accounts for 28% of US emissions.
Fuel economy standards are one tool to help curb these emissions.
(Source: https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions#transportation)
(2/18)
Light duty vehicles (cars, SUVs, light trucks) account for most US transport emissions.
DOT's National Highway Transportation Safety Administration (NHTSA) impacts these emissions through Corporate Average Fuel Economy (CAFE) standards.
(Source: https://www.c2es.org/content/regulating-transportation-sector-carbon-emissions/)
(3/18)
DOT's National Highway Transportation Safety Administration (NHTSA) impacts these emissions through Corporate Average Fuel Economy (CAFE) standards.
(Source: https://www.c2es.org/content/regulating-transportation-sector-carbon-emissions/)
(3/18)
History break 
Congress first directed DOT to establish CAFE standards in the Energy Policy and Conservation Act of 1975 (EPCA).
They were trying to conserve fuel in response to the 1973 oil crisis.
(4/18)
Congress first directed DOT to establish CAFE standards in the Energy Policy and Conservation Act of 1975 (EPCA).
They were trying to conserve fuel in response to the 1973 oil crisis.
(4/18)
Under CAFE standards, car manufacturers must produce fleets that meet a certain average fuel economy (mpg).
Fleet = Vehicles that are produced for sale in the US in a model year
3 types of fleets:
1) Domestic passenger cars
2) Import passenger cars
3) Light trucks
(5/18)
Fleet = Vehicles that are produced for sale in the US in a model year
3 types of fleets:
1) Domestic passenger cars
2) Import passenger cars
3) Light trucks
(5/18)
CAFE standards are based on the footprint of a vehicle - smaller cars are expected to get a higher mileage rating than larger cars.
So when people say "the CAFE standard is X mpg", this is just an estimate. The actual standard is calculated based on a complex formula.
(6/18)
So when people say "the CAFE standard is X mpg", this is just an estimate. The actual standard is calculated based on a complex formula.
(6/18)
How are CAFE standards enforced?
NHTSA calculates the CAFE standard for each fleet and compares this with the actual performance.
Manufacturers earn credits if their fleet, on average, is above the standard.
You can see compliance data here:
https://one.nhtsa.gov/cafe_pic/cafe_pic_home.htm
(7/18)
NHTSA calculates the CAFE standard for each fleet and compares this with the actual performance.
Manufacturers earn credits if their fleet, on average, is above the standard.
You can see compliance data here:
https://one.nhtsa.gov/cafe_pic/cafe_pic_home.htm
(7/18)
If a manufacturer's fleet is below the CAFE standard, they can comply by doing any of the following:
- Pay a penalty
- Use credits that they earned in another model year or from another fleet
- Purchase credits from someone else (like another manufacturer)
(8/18)
- Pay a penalty
- Use credits that they earned in another model year or from another fleet
- Purchase credits from someone else (like another manufacturer)
(8/18)
Fun Fact A big chunk of Tesla's revenue comes from selling these types of credits to other automakers.
Check it out
https://www.caranddriver.com/news/a32346670/other-automakers-paid-tesla-record-354-million/
(9/18)
Here's a twist!
NHTSA's CAFE standards aren't the only regulations affecting vehicles' fuel use
EPA regulates cars' GHG emissions.
California also has authority to set its own standards, if granted a waiver by EPA. Other states can opt into California's standards.
(10/18)
NHTSA's CAFE standards aren't the only regulations affecting vehicles' fuel use
EPA regulates cars' GHG emissions.
California also has authority to set its own standards, if granted a waiver by EPA. Other states can opt into California's standards.
(10/18)
Car manufacturers don't like having to comply with 3 different regulations.
So the Obama administration brought together NHTSA, EPA, and California to harmonize their rules, in consultation with 13 automakers.
This webinar tells the story:
(11/18)
So the Obama administration brought together NHTSA, EPA, and California to harmonize their rules, in consultation with 13 automakers.
This webinar tells the story:
(11/18)
Onward to a bold future!
Under the Obama admin's harmonized rules, CAFE standards would have grown 5% more stringent each year, reaching an average fuel economy rating of 54.5 mpg in 2025.
(Note that this 54.5 mpg rating translates to a sticker mileage of about 38 mpg)
(12/18)
Under the Obama admin's harmonized rules, CAFE standards would have grown 5% more stringent each year, reaching an average fuel economy rating of 54.5 mpg in 2025.
(Note that this 54.5 mpg rating translates to a sticker mileage of about 38 mpg)
(12/18)
Ugh, not so fast 
The Trump administration put a stop to that.
They loosened CAFE standards to rise by 1.5% per year to 40.4 mpg in 2026 (instead of rising by 5% per year under Obama).
These rollbacks went beyond what many automakers wanted.
(13/18)
The Trump administration put a stop to that.
They loosened CAFE standards to rise by 1.5% per year to 40.4 mpg in 2026 (instead of rising by 5% per year under Obama).
These rollbacks went beyond what many automakers wanted.
(13/18)
Trump's EPA also revoked California's waiver so the state cannot set its own vehicle emissions standards.
This also affects states that have adopted California's standards:
CO CT DE ME MD MA MN NJ NM NV NY OR PA RI VT WA DC
California has been fighting this in court.
(14/18)
This also affects states that have adopted California's standards:
CO CT DE ME MD MA MN NJ NM NV NY OR PA RI VT WA DC
California has been fighting this in court.
(14/18)
Pete Buttigieg actually talked about the California waiver situation at a town hall in September 2019
(15/18) https://twitter.com/nerdypursuit/status/1337947772092354568?s=19
(15/18) https://twitter.com/nerdypursuit/status/1337947772092354568?s=19
California has also found clever ways to sidestep the Trump administration. 
In 2019, they negotiated a compromise with Ford, Honda, Volkswagen, and BMW - who agreed to increase their fuel economy by 3.7% per year starting in 2022.
Learn more: https://www.washingtonpost.com/climate-environment/2019/07/25/major-automakers-strike-climate-deal-with-california-rebuffing-trump-proposed-mileage-freeze/
(16/18)
In 2019, they negotiated a compromise with Ford, Honda, Volkswagen, and BMW - who agreed to increase their fuel economy by 3.7% per year starting in 2022.
Learn more: https://www.washingtonpost.com/climate-environment/2019/07/25/major-automakers-strike-climate-deal-with-california-rebuffing-trump-proposed-mileage-freeze/
(16/18)
So what does this all mean for the Biden administration? 
I'm no expert, but I imagine the next Transportation Secretary would be involved in trying to renegotiate and re-harmonize fuel economy standards between NHTSA, EPA, California, and automakers.
We'll see!
(17/18)
I'm no expert, but I imagine the next Transportation Secretary would be involved in trying to renegotiate and re-harmonize fuel economy standards between NHTSA, EPA, California, and automakers.
We'll see!
(17/18)
NHTSA also sets fuel economy standards for medium- & heavy-duty vehicles. 
But I'll leave that for another thread.
Hope this was helpful!
(18/18)
But I'll leave that for another thread.
Hope this was helpful!
(18/18)
