Reforming and Strengthening Fuel Economy Standards by Incorporating New Technologies and Business Models
Fuel economy standards have proven essential to the energy security strategy of the United States. As President Trump announces his decision to revisit the U.S. fuel economy standards that were finalized under the previous administration, this SAFE brief outlines the steps regulators should take to reform and modernize this critical policy.
SAFE encourages the following:
Over time, recommit to one national program and avoid competing regulations at the federal and state level.
If necessary, grant some flexibility to the auto industry in the final years of the standards and extend the national program through 2030 and 2035. Doing so can provide stringency to meet environmental and energy security goals, while granting longer-term regulatory certainty that benefits the automotive industry.
Modernize fuel economy standards to incorporate new technologies, such as autonomous and semi-autonomous vehicles, and new business models, such as ridesharing. Moving toward regulating the entire mobility system over individual vehicles will increase reductions in oil demand while placing a lower regulatory burden on companies. SAFE recommends incentives to encourage more efficient vehicles to be used in high-utilization deployments.
Institute five-year reviews into the new program to ensure that regulations keep pace with current technologies, fuel prices and market dynamics.
Rather than provide minor adjustments to the current framework, leverage the restored timeline to create rules that are smart, effective, and fully integrate modern technologies and business models.
SAFE also urges the administration to examine opportunities to account for the greater efficiency and reduced oil consumption resulting from actual vehicle usage. We encourage pilot efforts and coordinating with industry to actively test autonomous vehicle fleets. To quantify and understand how to regulate the modern system that is emerging rather than continue to focus on regulating individual vehicles, SAFE encourages regulators to do the following:
Incentivize development of more efficient autonomous vehicles: Just as fuel efficiency standards have led to more efficient engines, regulators must develop ways to measure fuel efficiency implications of advanced driver assist features and autonomous vehicles, which will incentivize software developers to create self-driving algorithms that improve fuel efficiency.
Account for the “off-cycle” benefits of autonomy: Once quantifiable, gains from autonomy— such as reduced congestion due to better traffic routing and reduced accident frequency resulting from improved safety—should also be accounted for.
Recognize the different use profiles of shared and privately-owned vehicles: A shared vehicle, autonomous or otherwise, may drive 10 times as many miles in a year than a privately-owned vehicle. Fuel efficiency standards should recognize the increased impact of shared vehicles and increase their representation in calculating fleet-wide average fuel economies. This could be accomplished by including a credit multiplier for vehicle sales to a fleet operator.