Summary
The period from 2025 to 2035 could bring the most fundamental transformation in the 100-plus year history of the automobile. Battery electric vehicle (BEV) costs are likely to fall and reach parity with internal combustion engine vehicles (ICEVs). New generations of fuel cell vehicles will be produced. Connected and automated vehicle technologies will become more common, including likely deployment of some fully automated vehicles. These new categories of vehicles will for the first time assume a major portion of new vehicle sales, while ICEVs with improved powertrain, design, and aerodynamics will continue to be an important part of new vehicle sales and fuel economy improvement. An important driver of greater vehicle fuel economy will be the growing national priority to reduce greenhouse gas (GHG) emissions. These developments will impact automaker options for vehicle efficiency and bring about changes to consumer behavior and vehicle system services, including dealerships, vehicle service and repair, fueling and charging infrastructure, and transportation planning.
This report of the National Academies of Sciences, Engineering, and Medicine Committee on Assessment of Technologies for Improving Fuel Economy of Light-Duty Vehicles—Phase 3 addresses the potential for internal combustion engine, hybrid, battery electric, fuel cell, non-powertrain, and connected and automated vehicle technologies to contribute to efficiency in 2025–2035. It explores consumer and manufacturer responses to these technologies, and the regulatory aspects of fuel efficiency technologies. The report’s messages are summarized here and developed in greater detail in the body of the report, with findings and recommendations and technology cost and effectiveness estimates. Specifically, Chapters 1–3 provide historical, regulatory, and technical context for vehicle fuel economy up to 2025. Chapters 4–10 discuss vehicle and fuel technologies. Chapters 11 and 12 discuss consumer and regulatory aspects of fuel efficiency. Chapter 13 synthesizes the previous chapters’ content to make overall findings and recommendations about the future of light-duty vehicle fuel efficiency in 2025–2035, and advise Congress, the U.S. Department of Transportation (DOT), and the U.S. Environmental Protection Agency (EPA) as they move forward under existing or future mandates for vehicle efficiency. Significantly, the committee finds that the current statutory authority and regulatory structure for fuel economy is rapidly becoming outdated in legal, scientific, policy, technological, and global leadership perspectives, and should be updated before 2025–2035 to reflect national goals for transportation efficiency and emissions.
CONTEXT
Fuel economy requirements were first legislated in 1975 and have periodically increased with congressional action and regulations promulgated by DOT. During this time, the vehicle population, miles driven, and average vehicle performance have increased. Many efficiency technologies have achieved greater than 25% penetration by model year (MY) 2017, including variable valve timing, gasoline direct injection, 6-speed or greater transmissions, and improved tire rolling resistance. MY 2017 vehicles also showed greater than 15% penetration of variable valve lift, turbocharging, continuously variable transmissions, stop start, and 10% improvement in both aerodynamics and mass reduction, relative to the regulatory baseline. Alternative fuel vehicles have been developed, commercialized, improved in functionality, and proliferated in model availability. To advance from 2017 to 2025, automakers may pursue different pathways for efficiency improvements, but the least cost paths may include reductions in road loads such as rolling resistance, aerodynamic drag, and mass, as well as engine technologies like application of Miller and Atkinson cycles along with cooled exhaust gas recirculation (EGR) and transmission technologies such as 8-, 9-, and 10-speed transmissions.
INTERNAL COMBUSTION ENGINE-BASED POWERTRAIN TECHNOLOGIES
The future of efficiency for ICE-based powertrains in 2025–2035 will continue to focus on improving engine efficiency and reducing use of inefficient operating modes through engine technologies, complementary transmission technologies, and electrical assistance via hybridization.
In 2025–2035, thermal efficiency of turbocharged, downsized engines will improve by applying the Miller cycle to increase compression ratios. Potential enabling technologies include variable valve lift, variable compression ratio, cooled EGR, variable geometry turbine turbocharging, electric intake cam phasing, and increased fuel injection pressure. Further technologies to reduce pumping losses will include cylinder deactivation on 4- and 3-cylinder engines. These advances have the potential to achieve peak thermal efficiencies up to 40%.
Naturally aspirated engines of 2–2.5 L can readily utilize a simpler form of cooled EGR, cylinder deactivation, and variable valve lift. These engines are complementary to and used in strong hybrid applications as well, where lower engine performance demand can result in lower cost and very high peak thermal efficiency via the Atkinson cycle. Mostly in large sport utility vehicles (SUVs) and pickups, naturally aspirated V8 and V6 engines continue to fill some niches of high performance at lower cost, but they will continue to be substituted with downsized/boosted alternatives and/or hybridization.
Electric hybridization represents the ultimate efficiency approach for gasoline-fueled vehicles. In 2025–2035, there is likely to be expansion of 12 V stop-start systems, 48 V mild hybrids, and powersplit and P2 strong hybrids, and implementation of series strong hybrids and additional P2 offerings in larger vehicles. The electric components of the hybrid powertrain will have improved materials for higher efficiency and lower cost, including improved motor magnet materials, silicon carbide or gallium nitride power electronics, and battery cathodes with higher nickel content. The internal combustion engine can achieve higher efficiency when specifically developed to take advantage of hybrid synergies.
Transmissions in 2025 will typically have at least 6 speeds but will continue to transition to 8–10 speeds in 2025–2035, and some manufacturers will continue to utilize advanced continuously variable transmissions. Increased ratio span and more discreet operating points are highly complementary to the engine technologies described above. Integration of electrification and transmission will be a key development.
BATTERY AND FUEL CELL ELECTRIC VEHICLES
Automakers have developed electrified powertrain systems with zero or ultra-low tailpipe emissions. Many automakers have sold BEVs and plug-in hybrid electric vehicles (PHEVs), with a market penetration of roughly 2% in 2019. Electrified powertrains include an electric drive (electric motor, inverter, and controller) and a battery or fuel cell. Most automakers have converged on brushless permanent magnet synchronous motors with rare-earth magnets over induction motors owing to their superior power density, torque, and
overall efficiency. Wide-bandgap power-switching devices offer potential electric drive cost and performance improvements in 2025–2035.
Lithium-ion batteries will be the dominant battery chemistry in 2025–2035; much uncertainty remains regarding near-term commercial readiness of advanced battery concepts (e.g., solid-state batteries). Incremental engineering and manufacturing improvements to current chemistries will result in a roughly 7% annual cost reduction through 2030. Estimated pack-level costs are $90–$115/kWh by 2025 and $65–$80/kWh in 2030; thus, price parity with ICEVs is expected in 2025–2030. Reducing battery cost and improving charging infrastructure options may increase consumer appeal and adoption of BEVs. Improved charging infrastructure could expand possibilities for shorter-range BEVs, although there is currently a strong industry trend toward increasing EV range. Full-fuel-cycle BEV emissions will decrease with decreasing electric grid emissions.
Fuel cell electric vehicles (FCEVs) may become cost competitive with ICEVs and BEVs in 2025–2035, particularly in larger vehicles and vehicles with heavier use such as taxi fleets. Lack of hydrogen fueling infrastructure as well as high hydrogen costs are obstacles to FCEV adoption. Three automakers—Honda, Hyundai, and Toyota—have introduced light-duty FCEVs for sale or lease in California, Japan, and Germany, where government-industry partnerships are building hydrogen refueling networks. Research and development (R&D) efforts to reduce precious metal content in fuel cell assemblies and lower the cost of producing, delivering, and storing hydrogen are under way.
NON-POWERTRAIN TECHNOLOGIES
Improvements in non-powertrain technologies for road and accessory load reduction will increase vehicle efficiency in 2025–2035. Lightweighting via materials substitution and design optimization is the largest opportunity for road load reduction. In 2025–2035, material use is expected to shift away from mild- and high-strength steels and toward generation three steels and aluminum, with some contribution from magnesium and polymer composites. Design optimization will be important to offset weight added for electrification. Improvements in aerodynamic drag include the replacement of outside mirrors with cameras, pending safety approval. Consumer preference for crossover utility vehicles (CUVs) and SUVs, rather than sedans, and increased electrification will influence fleetwide aerodynamic performance. Reduced tire rolling resistance of 10% to possibly 30% from the current baseline will likely occur in 2025–2035 from new materials, design, and construction. Accessory load reductions for efficiency include air conditioning improvements, accessory electrification, low-drag-resistance brakes, and secondary axle disconnect.
Vehicle safety must be considered as technologies are implemented to improve fuel economy. In particular, the National Highway Traffic Safety Administration (NHTSA) should study (1) the potential changes in crash type and severity that could occur as a result of increased advanced driver assistance system (ADAS) implementation and (2) the potential changes in mass disparity that could occur in a fleet with increased penetration of electric vehicles, ADAS, CUVs, SUVs, and pickup trucks. Furthermore, the Federal Motor Vehicle Safety Standards for crashworthiness should consider crash compatibility with emphasis on differences in vehicle mass and design.
CONNECTED AND AUTOMATED VEHICLES
Connected and automated vehicles (CAVs) use sensing, control, and communication technologies to respond to external information and take increasing control of tasks previously handled by the driver. Automation levels1 are defined by the amount of driver intervention versus automation system control. Automation is developed for safety, convenience, accessibility, productivity, and commerce and entertainment. If designed with efficiency in mind, automated driving could substantially improve fuel efficiency, thereby lowering fuel costs, increasing driving range for electric vehicles, and delivering societal benefits through reduced fuel use and emissions.
___________________
1 Automation levels used in this report are those defined by the Society of Automotive Engineers, ranging from Level 1 (driver assistance, steering or acceleration) and Level 2 (partial automation, both steering and acceleration), to Level 5 (full automation, all driving tasks and all driving modes, no driver intervention).
Technologies to enable automation include radar, lidar, cameras, ultrasound, data, and mapping technology. Technologies to enable connectivity to other vehicles and infrastructure include short-range radio and cellular systems. Several systems for Level 2 automation are already commercially available, with more than 10% of new vehicles equipped with Level 2 technologies by early 2019. Level 4/5 vehicles are being piloted in U.S. cities. Fully automated vehicles are expected to be deployed in 2025–2035, especially in fleets.
Vehicle automation and connectivity can increase or decrease fuel consumption. Decreases in fuel consumption of individual vehicles come primarily from velocity optimization for “eco-driving,” and powertrain efficiency optimization, particularly for hybrid vehicles. Individual automation technologies may result in fuel savings of more than 8% in some driving conditions, although they can also increase fuel use if not implemented for efficiency. Connectivity and automation together could increase fuel efficiency of individual ICEVs by as much as 9% over an urban drive cycle and up to 20% for a PHEV over a combined urban/highway cycle. Off-cycle credits should be available for CAV technologies only to the extent that they improve the fuel efficiency of the vehicle on which they are installed and use realistic assumptions of technology adoption on other vehicles or infrastructure. The agencies should consider energy-saving CAV technologies in setting fuel economy standard stringency.
System effects, particularly for significant deployment of fully autonomous vehicles, may also have fuel consumption impacts. Some of these effects have relatively straightforward relationships with fuel consumption, including increased vehicle miles traveled (VMT), changes in congestion, and changes in vehicle size and weights. Some have more complex relationships with fuel consumption, including changes in vehicle ownership models, and the interaction of electrification and automation. Research to date indicates that autonomous vehicles at full penetration could plausibly produce a 40% reduction to a 70% increase in energy consumption, and thus policies will be required to ensure that these vehicles achieve net energy savings. NHTSA should consider how autonomous vehicle properties and usage differ from conventional vehicles and how this should be reflected in the stringency and structure of fuel economy standards. NHTSA should consider regulating fuel efficiency of autonomous vehicles for fleet use more stringently than personally owned vehicles; an all-electric requirement should be considered, at least for urban areas.
ENERGY AND EMISSIONS IMPACTS OF NON-PETROLEUM FUELS
In 2025–2035, emerging alternative fuels, such as electricity, hydrogen, and low-carbon synthetic fuels, are expected to see increasing use in the light-duty fleet. All of these alternative fuels have the ability to decrease the well-to-wheels and criteria emissions of vehicles, and electricity and hydrogen also have zero tailpipe emissions. Making electricity a low-carbon fuel on a well-to-wheels basis in all regions of the United States requires further decarbonization of the electricity grid. Low-carbon hydrogen requires additional R&D to decrease costs and enable scale-up. Low-carbon synthetic fuels can serve as drop-ins for gasoline and diesel, thereby providing an opportunity to decrease the well-to-wheels emissions of existing and future ICEVs and hybrid electric vehicles. To be considered low-carbon, these fuels must be synthesized using emissions-free energy sources and derived from low-carbon feedstocks. Low-carbon synthetic fuel commercialization requires further development of enabling technologies, including direct air capture, carbon dioxide electrolyzers, and biorefineries.
In addition to the required technological developments, regulatory changes might be necessary in the long term to account for the use of low-carbon fuels in the light-duty fleet. Depending on their specific long-term goals, NHTSA and EPA should evaluate whether full-fuel-cycle emissions are more appropriate metrics to use in setting standards. Such an approach would be particularly relevant in a fleet with high use of low-carbon synthetic fuels, which provide no benefit compared to conventional gasoline when only tailpipe emissions are considered.
CONSUMER ACCEPTANCE AND MARKET RESPONSE
When and how various fuel-saving technologies are incorporated into vehicles depends on multiple market factors—including consumer demand and willingness to pay for efficiency technologies, how manufacturers respond to the standards, and barriers to technology adoption.
Since inception of regulations, vehicle fuel economy and emission rates have improved. There have also been increases in vehicle weight and power, although manufacturers are producing ICEVs with higher fuel economy and
less performance than they would have otherwise. Over this time, the share of sales of light trucks has increased, raising concerns over mass disparity in vehicles. The extent to which these shifts have affected overall consumer welfare remains an area for study.
Understanding consumer value changes with vehicle attributes is important for understanding the effects of the standards. Consumer valuation may be assessed through the classic framework of utility maximization and/or through the lens of behavioral economics. Under either framework, lack of consumer understanding and familiarity and risk aversion are key barriers to the adoption of novel technologies. These barriers affect the extent of consumer demand for zero-emission vehicles (ZEVs)2 and will affect acceptance for technologies like CAVs. Additional study is required to better understand effective interventions to reduce these adoption barriers (e.g., education, incentives, supporting infrastructure availability). Purchase subsidies have been found to increase sales of PHEVs, BEVs, and FCEVs. To continue to decrease vehicle energy use and emissions, federal subsidies should be continued and changed to operate as point-of-sale rebates with income eligibility considered. Effectiveness of subsidies should be studied in meeting goals of equity, sales, and/or electric VMT.
REGULATORY STRUCTURE AND FLEXIBILITIES
Vehicle fuel economy regulation began under the Energy Policy and Conservation Act of 1975, with the most recent regulation being the 2020 Safer Affordable Fuel Efficient Vehicles Rule. U.S. automakers have typically expressed preference for consistent and predictable regulations, to harmonize across global markets and accommodate long product cycles.
There are discrepancies between measured and real-world vehicle fuel economy. Given improvements in onboard technology for measuring real-world performance, the agencies should collect data on vehicle fuel consumption and emissions and consider how to adjust future crediting with the standards. The current approach to adjusting fuel economy involves the use of off-cycle crediting3 to augment the test cycle fuel economy measurements. EPA and NHTSA should require the documentation for off-cycle credits to be transparent and detailed, available for comment, and publicly reported. Emerging vehicle technologies require particular considerations regarding crediting, test cycle procedures, and accounting for their full fuel cycle environmental impacts. The standards allow for credit trading, which appears to have reduced overall manufacturer compliance costs, although the effects are made more difficult to evaluate by transparency challenges.
The U.S. fuel economy program exists in the context of an increasingly globalized vehicle market influenced by a number of national regulations. In this context, the 2025–2035 Corporate Average Fuel Economy (CAFE) standard should be set and designed to depend on and incentivize a significant market share of ZEVs.
EMERGENT FINDINGS AND RECOMMENDATIONS FOR CONTINUED REDUCTION IN ENERGY USE AND EMISSIONS OF LIGHT-DUTY VEHICLES
In Chapter 13, the committee makes recommendations for Congress, DOT, and EPA under the current legislative authority.
SUMMARY RECOMMENDATION 1. Growing Role of ZEVs: The agencies should use all their delegated authority to drive the development and deployment of zero-emission vehicles (ZEVs), because they represent the long-term future of energy efficiency, petroleum reduction, and greenhouse gas emissions reduction in the light-duty vehicle fleet. Vehicle efficiency standards for 2035 should be set at a level consistent with market dominance of ZEVs at that time, unless consumer acceptance presents a barrier that cannot be overcome by public policy and private sector investment. At the same time, maximum feasible fuel economy of
___________________
2 As used in this report, a ZEV has zero emissions at the tailpipe. When upstream emissions are considered, ZEVs do not generally have zero emissions on a life cycle basis.
3 Off-cycle credits are aspects of vehicle efficiency and emissions regulations that adjust for efficiencies or emissions reductions that are not directly measured on vehicle test cycles.
petroleum-fueled vehicles should be pursued, under the National Highway Traffic Safety Administration’s interpretation of its existing authority, and as a portion of the U.S. Environmental Protection Agency’s combined stringency assessment. The pathway to zero emissions should be pursued in a technology-neutral manner.
SUMMARY RECOMMENDATION 2. Purchase Subsidies: The U.S. federal battery electric vehicle, plug-in hybrid electric vehicle, and fuel cell electric vehicle purchase subsidies should be continued until financial and psychological consumer barriers to purchasing such vehicles have been overcome. However, it should be changed to point-of-sale rebates to increase effectiveness and lower fiscal burdens. Income eligibility should be considered for both policy equity and effectiveness. Research organizations in partnership with federal agencies should conduct studies to optimize which type of vehicles and electric ranges should receive more or less subsidy, with considerations of equity and policy effectiveness in promoting zero-emission vehicle sales and/or electric vehicle miles traveled share.
SUMMARY RECOMMENDATION 3. Charging Infrastructure: The U.S. Department of Transportation, the U.S. Environmental Protection Agency, and the U.S. Department of Energy should coordinate to facilitate electric charging and hydrogen refueling infrastructure deployment with relevant stakeholders, including state and local government agencies, business associations, and entitites. Congress should appropriate funds for and the agencies should create a national public-private partnership to lead this coordinating effort. For plug-in electric vehicle (PEV) charging, this coordinated effort should explicitly incorporate corridor fast charging, public charging at public parking spaces, PEV readiness of new and renovated homes and communities, and PEV readiness of workplace parking. For fuel cell electric vehicles, this coordinated effort should include support of hydrogen fuel infrastructure for light-duty vehicle (LDV) users in conjunction with medium- and heavy-duty vehicles and industry users, and deployment of LDV hydrogen refueling stations.
SUMMARY RECOMMENDATION 4. Agency Coordination of Different Authorities: The efforts of the National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) to coordinate their fuel economy and greenhouse gas (GHG) emission standards since 2010 have been beneficial and should be continued to the extent feasible. However, the separate agency standards may now diverge because of the growing availability and benefits from zero-emission vehicles (ZEVs) and the agencies’ different statutory authorities. The EPA can and must consider the availability and benefits of ZEVs and more efficient petroleum-fueled vehicles in setting the most stringent feasible GHG emission standards. In order to remain binding and relevant, NHTSA’s program must consider the fuel economy or energy efficiency benefits provided by alternative fuel vehicles such as battery electric vehicles and fuel cell electric vehicles in setting the stringency of its corporate average fuel economy standards, either by NHTSA’s interpretation of existing statute or by Congress passing a new or amended statute.
SUMMARY RECOMMENDATION 5. NHTSA ZEV Authority: To fulfill its statutory mandate of obtaining the maximum feasible improvements in fuel economy, the National Highway Traffic Safety Administration should consider the fuel economy benefits of zero-emission vehicles (ZEVs) in setting future corporate average fuel economy (CAFE) standards. The simplest way to accomplish that would be for Congress to amend the statute to delete the prohibition (42 U.S.C. § 32902[h][1]) on considering the fuel economy of dedicated alternative-fueled vehicles in setting CAFE standards. If Congress does not act, the Secretary of Transportation should consider ZEVs in setting the CAFE standards by using the broad authority under the statute to set the standards as a function of one or more vehicle attributes related to fuel economy, and define the form of the mathematical function. For example, recognizing that the maximum feasible average fuel economy depends on the market share of gasoline and diesel vehicles relative to ZEVs, the Secretary could consider redefining the function used for setting the standards to account for the expected decreasing share of gasoline and diesel vehicles relative to ZEVs. One possible mechanism to do this could be setting the standard as a function of a second attribute in addition to footprint—for example, the expected market share of ZEVs in the total U.S. fleet of new light-duty vehicles—such that the standards increase as the share of ZEVs in the total U.S. fleet increases.
SUMMARY RECOMMENDATION 6. Fulfilling EPA Mandate: If the National Highway Traffic Safety Administration is unable to consider alternative-fuel vehicles, and in particular zero-emission vehicles (ZEVs), in its stringency analysis, then the U.S. Environmental Protection Agency should continue under its mandate with divergent, more stringent standards, based on the advancements in ZEVs.
SUMMARY RECOMMENDATION 7. Life Cycle Emissions: Congress should define long-term energy and emissions goals for the corporate average fuel economy (CAFE) and greenhouse gas (GHG) programs, and the National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) should set regulations that put the United States on a path to meet those goals. Considering other regulatory systems that may be implemented as part of a national program to reduce energy use and emissions in the fuel, electricity, and manufacturing sectors, the light-duty vehicle CAFE and GHG programs may or may not need to address the full vehicle and fuel life cycle emissions and energy consumption. Any vehicle or fuel life cycle requirements within the NHTSA or EPA programs should be set with appropriate lead-time for manufacturers to revise their upcoming product plans.
SUMMARY RECOMMENDATION 8. ZEV Upstream Emissions Accounting: In the longer term, it makes sense to address the full-fuel-cycle emissions of all vehicles, including zero-emission vehicles (ZEVs), especially as ZEVs become a progressively larger portion of the light-duty vehicle fleet. The National Highway Traffic Safety Administration and the U.S. Environmental Protection Agency should undertake a study of how and when to implement a full-fuel-cycle approach, including consideration of the potential benefits and drawbacks of the current temporary exclusion of upstream emissions for compliance of ZEVs. Based on that study, the agencies should decide whether and when to adopt a different approach for accounting for upstream ZEV emissions for compliance.
SUMMARY RECOMMENDATION 9. Safety: Improved crash compatibility will reduce the adverse effect of mass and geometric disparity on crash safety for passengers of all vehicles and vulnerable roads users, including pedestrians. The National Highway Traffic Safety Administration should study mass disparity in 2025–2035, improve federal motor vehicle safety standards testing protocols for crash compatibility, and further develop testing or computer-aided engineering fleet modeling to simulate real-world crash interactions between new vehicle designs and with vulnerable users at different impact speeds and impact configurations.
SUMMARY RECOMMENDATION 10. Autonomous Vehicle Efficiency Regulation: The agencies should consider regulating autonomous vehicles for fleet use differently from personally owned vehicles. Maximum feasible standards for these vehicles could be substantially more stringent than standards for personally owned vehicles; an all-electric requirement should be considered. To achieve the fuel-savings potential of autonomous driving and avoid its unintended consequences, the U.S. Department of Transportation should consider actions to guide the effects of autonomous driving on the U.S. transportation system and make recommendations accordingly to other agencies and to Congress.
SUMMARY RECOMMENDATION 11. Novel Technology Barriers: Because consumer resistance to novel technology is a significant issue in market penetration and acceptance of new technologies, policy interventions beyond purchase subsidies may be needed to address these barriers. Such policies may include investment in charging and refueling infrastructure, or consumer education and exposure to the new technology and its benefits.
SUMMARY RECOMMENDATION 12. In-Use Performance: The agencies should implement a program that measures fuel consumption and greenhouse gas emissions from the light-duty vehicle fleet in use. The purpose of the in-use program should be to evaluate and improve the effectiveness of the corporate average fuel economy program, not for year-by-year enforcement against individual manufacturers. New data sources and telematic technologies makes such in-use monitoring feasible, but safeguards must be established to minimize privacy risks for vehicle owners and operators.
SUMMARY RECOMMENDATION 13. Driving Patterns and Emissions Certification: The agencies (U.S. Department of Transportation, U.S. Environmental Protection Agency, U.S. Department of Energy) should conduct a study on how well current driving patterns and new vehicle technology impacts are reflected by current vehicle certification test cycles. The results of this study should then be used to propose new light-duty vehicle test cycles, or adoption of the current or a new weighting of the existing 5-cycle test. The study of driving patterns and emissions and resulting changes in the test cycle may make it possible to eliminate some off-cycle treatment of fuel efficiency technologies and evaluate the energy saving impacts of those that remain.
SUMMARY RECOMMENDATION 14. Off-Cycle Technologies: The U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration should consider off-cycle technologies in setting the stringency of the standards. The agencies should approve off-cycle credits on an annual cycle, require automakers to clearly and transparently document the test procedures and data analysis used to evaluate off-cycle technologies, and produce a compiled report on proposed credits that is available for public comment. The agencies should track the adoption of off-cycle credits in the vehicle fleet at the model level and report these data to the public, for example through the EPA Trends Report.
SUMMARY RECOMMENDATION 15. CAV Efficiency Regulation: In setting the level of the standards, the agencies should consider connected and automated vehicle (CAV) technologies that can save energy. Off-cycle credits should be available for CAV technologies only to the extent that they improve the fuel efficiency of the vehicle on which they are installed. Credits should be based on realistic assumptions, where needed, regarding technology adoption on other vehicles or infrastructure.
SUMMARY RECOMMENDATION 16. Car and Truck Standards: The National Highway Traffic Safety Administration and the U.S. Environmental Protection Agency should commission an independent group to study the effectiveness and appropriateness of separate standards for passenger cars and light trucks.
FUTURE POLICY SCENARIOS FOR CONTINUED REDUCTION IN ENERGY USE AND EMISSIONS OF LIGHT-DUTY VEHICLES
The committee considered the future of fuel efficiency technology, consumers, market, and regulatory aspects in 2025–2035; how Congress should move forward to update the legislative mandates for vehicle efficiency; and how DOT and EPA should update and better integrate their respective regulatory structures given the committee’s assessment of the technology future. The committee made the following findings and recommendations for the future legislative and regulatory structure of the CAFE program:
FINDING 13.1: The current statutory authority for the CAFE program is becoming increasingly outdated as a result of legal, scientific, policy, technological, global leadership, and economic developments and trends.
RECOMMENDATION 13.1: Given the end of the latest legislative specification for corporate average fuel economy (CAFE) in 2030, Congress should extend the CAFE program and, as part of that reauthorization, evaluate and update the statutory goals of the CAFE program. With those goals in mind, Congress should consider changes to the program structure and design, and its interaction with other related policies and regulations.
RECOMMENDATION 13.2:4 The statutory authorization for the corporate average fuel economy (CAFE) program should be amended to expressly include climate change as a core objective of the program, along with
___________________
4 In discussion with stakeholders after the pre-publication version of this report was released, it became apparent that this recommendation could be interpreted in a way that would have unintended effects that were not examined by the Committee. This footnote was added to this final publication of the report in order to clarify that in making this recommendation, the Committee did not examine and did not intend for any changes to statute to disrupt the regulatory structure that provides for state greenhouse gas emissions standards, state zero emission vehicle requirements, and greenhouse gas emissions standards promulgated by the U.S. Environmental Protection Agency.
existing objectives such as energy conservation. Specifically, the statutory considerations for setting CAFE standards in 49 U.S.C. § 32902(f) should be amended to include the goal of reducing greenhouse gas emissions.
FINDING 13.2: The continued existence of two partially overlapping programs, the CAFE program administered by NHTSA and the GHG emissions program administered by EPA, imposes some duplication and extra costs on government and industry, but these additional burdens can be mostly offset by coordinating the two programs. In addition, the continued existence of the two separate programs provides some benefits that outweigh the duplicated costs and burdens, including the consideration of different unique and relevant factors by each agency, and the benefits of having the two agencies check and backstop each other’s activities.
RECOMMENDATION 13.3: Congress should reauthorize the continuation of the National Highway Traffic Safety Administration (NHTSA) corporate average fuel economy (CAFE) program, notwithstanding its practical overlap with the U.S. Environmental Protection Agency light-duty vehicle greenhouse gas program. Congress can minimize any disruption from having two programs by eliminating any obstacles to coordinating the two programs, such as by eliminating the current prohibition that prevents NHTSA from considering zero-emission vehicles and other dedicated alternative-fueled vehicles in setting CAFE standards.
FINDING 13.3: Many studies suggest that reaching an economy-wide deep decarbonization goal will require new vehicles to be zero-emissions. To comprehensively address climate change, a transition to ZEVs needs to be in concert with a full move to net-zero GHG fuels and electricity, and also net-zero vehicle manufacturing GHG emissions.
RECOMMENDATION 13.4: To provide vehicle manufacturers a longer-term target to assist planning their ongoing technology investments and pathways, Congress should set a goal that all new light-duty vehicles will have net-zero greenhouse gas emissions by a specific date that aligns with a national deep decarbonization goal, and includes interim goals. This target should be technology neutral, to allow each manufacturer to choose its compliance pathway and technology strategy.
RECOMMENDATION 13.5: The Executive Branch should create an interagency task force with the objective of coordinating and integrating government efforts to achieve a cleaner, safer, and fairer transportation and mobility system.
RECOMMENDATION 13.6: The federal interagency committee on new mobility, along with state and local policy makers, should consider rules or incentives to encourage future autonomous vehicles, especially in fleets, to use zero or near-zero emission technologies. Furthermore, the impact of any incentives should be evaluated for their ability to promote an overall reduction in vehicle miles traveled and increase in the use of transit and shared rides.
CAFE has historically been the bedrock of U.S. vehicle energy efficiency and climate policy, eventually joined by EPA vehicle and other GHG programs. It is now entering a time of major change, with new technologies enabling a pathway to zero emissions, and a future of a diversity of energy sources and modes of mobility. The committee expects that CAFE will continue to play an important role in the future if the recommendations in this report are adopted, and serve as an example for other energy and climate policies administered by government agencies in the United States and around the world.
