Fuel Regulation Compliance Costs Could Be 40% Lower Than EPA Estimate

Matt Posky
by Matt Posky

An economic assessment conducted by the International Council on Clean Transportation found that, due to recent improvements in technology, the Environmental Protection Agency’s rationale for its 2025 fuel efficiency standards may have overestimated the cost for automakers to comply. The ICCT’s study shows average per-car investments 34 to 40 percent lower than the previous EPA appraisal.

While this information, had it come out sooner, may not have kept automotive executives from bending the president’s ear to reevaluate EPA guidelines, it certainly reframes their reasons for doing so. The ICCT, famous for turning researchers loose on Volkswagen diesels, makes a good case that manufacturers have the tools to meet current standards without spending a lot of money.

The ICCT white paper builds on the modeling and peer-reviewed data used in the EPA and National Highway Traffic Safety Administration’s Technical Assessment Report of US passenger vehicle emission regulations. It includes newer industry research and the usage of advanced vehicle technologies. The paper asserts that technology costs continue to decrease, proving that previous estimates, including those made by the federal regulatory agencies, have been far too conservative.

“All of those evolutionary changes, just getting a few percent here and a few percent there from those allow more cost-effective implementation of the regulations,” said the report’s principal author Nic Lutsey.

Features like cylinder deactivation, higher-compression Atkinson-cycle engines, composite materials, and hybridization will all become more affordable and prevalent in the coming years. So, instead of the EPA-estimated $875 per vehicle needed to meet the standards, the ICCT’s analysis places the average per-unit-fee at $551.

Regulatory matters are usually pretty dry, but that’s a mic drop moment.

Automakers, through their lobbying groups, have said the Obama era rules were far too expensive to meet, and could even eliminate American jobs — leading to Donald Trump’s recent decision to have review those standards. However, protesting on the grounds of excessive cost becomes a little less potent when the necessary investment is the same price as a remote starter and some floor mats. Consumers aren’t likely to take up arms against an automaker or stop buying its product, especially when they are saving at the pump.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • ToddAtlasF1 ToddAtlasF1 on Mar 24, 2017

    "However, protesting on the grounds of excessive cost becomes a little less potent when the necessary investment is the same price as a remote starter and some floor mats. Consumers aren’t likely to take up arms against an automaker or stop buying its product, especially when they are saving at the pump." It's like the propaganda writes itself! Nice critical thinking. Then again, Obama's CAFE was predicated on an electorate stupid enough to vote away its freedom of choice of vehicles.

  • Stuki Stuki on Mar 24, 2017

    Or it could not. As an economic assessment by the Council for Continued Make Work and Make Belief just may have made me belive it said..

  • Master Baiter I'm skeptical of any project with government strings attached. I've read that the new CHIPS act which is supposed to bring semiconductor manufacturing back to the U.S. is so loaded with DEI requirements that companies would rather not even bother trying to set up shop here. Cheaper to keep buying from TSMC.
  • CanadaCraig VOTE NO VW!
  • Joe This is called a man in the middle attack and has been around for years. You can fall for this in a Starbucks as easily as when you’re charging your car. Nothing new here…
  • AZFelix Hilux technical, preferably with a swivel mount.
  • ToolGuy This is the kind of thing you get when you give people faster internet.
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