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Statement of Need: The Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) have recently jointly proposed to redesign and add information to the current fuel economy label that is posted on the window sticker of all new cars and light-duty trucks sold in the U.S. The redesigned label will provide new information to American consumers about the fuel economy and consumption, fuel costs, and environmental impacts associated with purchasing new vehicles beginning with model year 2012 cars and trucks. This action will also develop new labels for certain advanced technology vehicles, which are poised to enter the U.S. market, in particular plug-in hybrid electric vehicles and electric vehicles. NHTSA and EPA are proposing these changes because the Energy Independence and Security Act (EISA) of 2007 imposes several new labeling requirements, because the labels for conventional vehicles can be improved to help consumers make more informed vehicle purchase decisions, and because the time is right to develop new labels for advanced technology vehicles that are being commercialized.

Summary of the Legal Basis: Both EPA and NHTSA have authority over labeling requirements related to fuel economy and environmental information under the Energy Policy and Conservation Act (EPCA) and the Energy Independence and Security Act (EISA), respectively. In order to implement that authority in the most coordinated and efficient way, the agencies have jointly proposed to revise the Fuel Economy label.

Alternatives: The rulemaking proposal includes an alternative label that is being considered in addition to the Agency’s primary proposal.

Anticipated Costs and Benefits: The primary costs associated with this proposed rule come from revisions to the fuel economy label and codifying testing requirements for EVs and PHEVs. This rule is not economically significant under E.O. 12866 or any DOT or EPA policies and procedures because it does not exceed $100 million or meet other related standards. The primary benefits associated with this proposed rule come from any improvements in consumer decisionmaking that may lead to reduced vehicle and fuel costs for them. There may be additional effects on criteria pollutants and greenhouse gas emissions. At this time, EPA and NHTSA do not believe it is feasible to fully develop a complete benefits analysis of the potential benefits.

Risks: The failure to finalize updated conventional vehicle fuel economy labels and to create new labels for EVs and PHEVs will result in labels that are unhelpful and potentially misleading for consumers as they seek to select more energy efficient and environmentally friendly vehicles that meet their needs.