New EPA Labels Likely To Impact Hybrids the Most

Cost-conscious shoppers likely will broaden their searches for vehicles that meet their needs but still achieve the fuel economy they expect, the analysts predict.

Published: 16-Jan-2006

ONG>WASHINGTON -- A new government rule that makes across-the-board cuts in the fuel economy ratings of new vehicles is likely to roil an already volatile U.S. market.

The EPA says it expects the rule that it announced last week to lower highway ratings for most cars and trucks by 5 to 15 percent. City ratings will decline 10 to 20 percent, and even more for hybrids, the agency estimates.

The change will pressure automakers to boost the efficiency of their vehicles, industry analysts say. Cost-conscious shoppers likely will broaden their searches for vehicles that meet their needs but still achieve the fuel economy they expect, the analysts predict.

"Performance and safety have been the things that really sell," says Steve Mazor, manager of the automotive research center of the Automobile Club of Southern California. "But now we see that economy is getting more important as gas prices just get so high."

At the least, the EPA plan probably will force automakers to diminish some of their claims. The Alliance of Automobile Manufacturers boasts that car companies that operate in the United States build more than 100 models that get more than 30 mpg on the highway.

That may no longer be true when the ratings change takes effect in the 2008 model year.


Hybrids get hit
Roland Hwang, vehicles policy director at the Natural Resources Defense Council, says he worries that the new rule could dampen public enthusiasm for gasoline-electric hybrids. "We could be discouraging the kinds of technology we need to encourage," Hwang told Automotive News.

The EPA intends the new ratings to predict fuel economy more accurately. But Hwang says they still will be based on questionable data.

The federal environmental agency says it plans to incorporate data from emissions tests into its traditional fuel economy test. It will make other adjustments to reflect changes in highway speeds, road conditions and weather.

The planned revisions are the first in 20 years and the biggest in 30 years of government ratings of fuel economy. The EPA also is considering new designs for fuel economy labels in vehicle windows.

The agency has scheduled 60 days of public comment before it adopts the plan.

The EPA proposal does not affect the corporate average fuel economy program administered by the National Highway Traffic Safety Administration.

NHTSA will continue to use the EPA's traditional fuel economy test to calculate the standards that automaker fleets must meet.

Separate process
NHTSA is conducting a separate rule-making process that will raise CAFE standards for light trucks for the 2008-11 model years. It also will add size classes to the program for the first time. NHTSA is scheduled to adopt its plan by April 1.

Last week, the automakers' alliance said it wants to work with the EPA to provide consumers with better information about fuel economy. The alliance represents the Big 3 and six import-brand companies.

But car companies were cool to the EPA's change in its test procedures. It began that review two years ago after a petition from the environmental group Bluewater Network.

The Association of International Automobile Manufacturers, which includes 14 automakers -- among them Toyota, Honda and Nissan -- told the EPA in July 2004: "It is impossible to devise any single test procedure which will accurately predict in-use fuel economy for all drivers."

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