U.S. unveils new fuel economy labels, drops grades

By David Shepardson

From © Detroit News Washington Bureau

The Obama administration unveiled revamped fuel economy labels today — including new ratings for electric vehicles — but dropped a proposal to assign "A+" through "D" grades for vehicle efficiency.

The decision — announced this morning by the administration — is a win for automakers that have lobbied against the letter grades, worried that it would have deterred customers from buying larger vehicles that got poor grades.

The new labels — required by a 2007 energy law and jointly revised by the Environmental Protection Agency and the National Highway Traffic Safety Administration — will take effect with the 2013 model year.

The new label retain the traditional focus on miles per gallon and annual fuel costs, while updating the overall design and adding required new comparison information on fuel economy and emissions.

Transportation Secretary Ray LaHood unveiled the new stickers on NBC's "Today Show" in New York this morning. The segment featured a Chevrolet Volt and Ford Focus.

"Our new fuel economy and environmental labels are a win for automobile consumers and for the nation's energy independence," LaHood said.

EPA Administrator Lisa Jackson also praised the new labels.

"The EPA and DOT are creating a new generation of fuel economy labels to meet the needs of a new generation of innovative cars," she said.

The new labels have some new features, including a QR Code that will allow users of smartphones to access online information about how various models compare on fuel economy. Consumers will be to enter information about their commutes and driving behavior to get a more precise estimate of fuel costs.

The rule also finalizes new labels for electric vehicles and plug-in hybrids to convert the use of electricity to a miles per gallon equivalent — and to allow users to compare charging costs to gasoline use. Last year, the administration approved interim labels for the electric Nissan Leaf and extended range electric Chevrolet Volt, which it classifies as plug-in hybrids.

In August, the Obama administration said it was also considering a more dramatic redesign. Those labels — similar to a British label — that would have given autos letter grades on the basis of fuel efficiency.

Automakers and dealers were harshly critical of the letter grade proposal. More than 50 members of Congress - including eight Michigan Democrats and Republicans — sent a letter in December opposing the grades.

Vehicles would have gotten an "A+" to "D" grade, and the median grade would have been a "B-." No vehicle would get a failing grade. To get an "A," a vehicle would have to average at least 59 miles per gallon; to avoid a "D," a vehicle would have to average at least 14 mpg.

No van would have rated higher than a "C+" and most SUVs would get a "C+" or lower. Some versions of the Toyota Tundra, Nissan Titan, Cadillac CTS, Lexus 570 and GMC Sierra 15 would have earned a "C-."

The Alliance of Automobile Manufacturers - the trade association representing Detroit's Big Three automakers, Toyota Motor Corp. and seven other automakers, praised the announcement and noted the move harmonizes labels between the federal government and California.

"Today's announcement by EPA and DOT is a victory for consumers. The average car buyer is a savvy shopper who gathers much information prior to buying a car, so the decision to go with informative MPG labels fits consumer needs well. This label provides clear, visible data on fuel economy in a format consumers are already familiar with," the group said

Rep. Dale Kildee, D-Flint, who had co-written the letter opposing the grades, praised it. "I am very pleased that the EPA and DOT have heeded my call to maintain prominent miles per gallon labeling.

"Over the years these labels have become a tried and true measure for consumers as they decide which car or truck is right for them. Changing this system to a letter grade would have caused confusion, and would have unfairly given low marks to many fuel efficient SUVs and trucks."

Dan Becker, director of the Safe Climate Campaign, criticized the decision to drop the grades.

"The Obama administration caved to auto industry pressure and pulled the plug on a key consumer education proposal intended to help us determine which cars are cleanest," he said. "This decision denies consumers clear information to help them make educated choices."

Last year, the Obama administration boosted fleetwide fuel economy by about 40 percent to 34.1 mpg by 2015 - a regulation that will cost the auto industry about $51.5 billion, the government said.

The rule, which covers the 2012 through 2016 model years, will save 1.8 billion barrels of oil over the life of the program and the average consumer $3,000 in fuel costs.

In July, the administration plans to finalize the first-ever standards for commercial trucks, vans and buses, starting with the 2014 model year.

The agencies are working on the 2017-2025 requirements are considering 3-6 percent annual increases for the time frame, which would require a fleetwide average of between 47 mpg and 62 mpg by 2025.

A fleetwide average of 47 mpg and 62 mpg by 2025 would increase the cost of a vehicle from $770 to $3,500, depending on the stringency.

The administration plans to announce its proposed increases in September. The California Air Resources Board is also planning to propose its own new limits in vehicle emissions.

Last year, California agreed to waive its right to set its own rules for 2012-16, after the federal government largely adopted its state rules nationwide.

Automakers may also voluntarily adopt the new labels earlier for model year 2012 vehicles.