The EPA Unveils New Fuel Economy Labels

If you haven't been new-car shopping for awhile there's one change at dealerships that should please just about everyone. Beginning with the 2013 model year, passenger vehicles display informative fuel economy labels.

Jointly developed by the Department of Transportation (DOT) and the Environmental Protection Agency (EPA), the labels are the product of a lengthy and often contentious debate about the best way to provide consumers with valuable information related to air emissions and fuel efficiency. They have won praise from virtually all the parties who have a stake in the presentation.

The labels appear on conventional gas- and diesel-powered vehicles, as well as alternative-fuel vehicles such as plug-in hybrids, battery-electric vehicles and the hydrogen fuel-cell EVs expected to hit the market by 2017.

The labels represent the most dramatic overhaul to fuel economy labels since the federal government began requiring them more than three decades ago. They give car shoppers:

• Ways to compare energy use and cost between conventional gas- and diesel-powered vehicles and those powered by alternative means such as electricity.
• Useful estimates of the amount consumers will save or spend on fuel over the five years after purchase, compared to the average conventionally powered new vehicle.
• Easy-to-read ratings on a 1-10 scale (10 being best) of the way a particular model compares to all others for fuel economy, air emissions related to the formation of smog, and air emissions related to climate change.
• An estimate of how much fuel or electricity it takes to drive a particular vehicle 100 miles.
• Information about the driving range and charging time of an electric vehicle.
• A QR code that lets smartphone users access online information comparing how various models stack up in terms of fuel economy, as well as other environmental and energy factors. This tool also allows consumers to enter information about their typical commutes and driving behavior in order to get a more precise estimate of individual fuel costs and savings.

Better Comparisons

"There's a lot of really useful comparative information here," says Mark Cooper, director of research for the Consumer Federation of America. Cooper's organization had advocated an A-D letter-grade label to give consumers an easy way to compare the fuel efficiency of different models, but he says of the numerical ratings: "They are quite transparent, which is actually better than a letter grade."

The revised fuel economy labels present four useful categories of data that enable consumers to compare any vehicle against all other vehicles in all classes. For example, a pickup truck with a fuel economy and greenhouse gas rating of seven consumes roughly the same amount of gasoline and generates roughly the same amount of greenhouse gases per mile as an SUV or minivan with a fuel economy and greenhouse gas ratings of seven.

The labels will also provide useful fuel economy information within individual vehicle segments. For example, the label on a gasoline-powered subcompact might indicate that it gets 30 miles per gallon in the city, 35 mpg on the highway and 32 mpg combined. Yet the same label will also include text like this: "Subcompacts range from 28-38 mpg."

This is helpful information for people who have decided they want a subcompact and want to know how the ones they are looking at compare to others in the segment. Consumer and environmental groups say the revised fuel economy labels will help people find the most efficient vehicles that fit their needs.

Incentives for Carmakers To Do Better

The labels are also likely to spur automakers to work harder to achieve higher ratings, because they know that consumers will be looking closely at them, now that the numbers are posted in plain sight. Under the previous system, the fuel economy labels seen in dealer showrooms did not contain comparative fuel economy and greenhouse gas ratings, nor did they contain smog ratings.

"It won't take long for the car companies who offer vehicles with nine and 10 ratings to reap the rewards that come with offering the cleanest and most fuel-efficient vehicles," says Jack Gillis, director of public affairs for the Consumer Federation of America. "On the other hand, it's going to be pretty difficult to sell a vehicle with a one or two rating, when consumers can readily see the alternatives."

While most environmental and some consumer groups came down hard in favor of the letter-grade label when the EPA initially issued its proposals, most accepted the numerical rating label. The Alliance of Automobile Manufacturers, an industry trade group, opposed the letter-grade label (as did Edmunds.com and Consumer Reports) on the grounds that it was too simplistic and didn't enable consumers to compare vehicles by category. It was quick to endorse the so-called MPG label, which emphasizes fuel economy and fuel cost information.

The label "fits consumer needs well," says Gloria Bergquist, public affairs vice president for the industry trade group. She says automakers are especially happy with the decision to have a single national label to replace the present system of using one label for cars sold in California (because of its tougher emissions standards), and another for the rest of the country.

"Basically, we like them," Eric Evarts, associate autos editor for Consumer Reports, says of the labels. "A more data-driven label allows people to compare cars more directly than the letter-grade label."

Empowerment for Buyers

Kathryn Phillips, the Environmental Defense Fund's transportation specialist, says the label "will empower American car buyers like never before."

She says the numerical rankings provide "an easy way to compare the performance of different vehicles." They enable car buyers to reduce their fuel bills and carbon footprints by selecting the most fuel-efficient vehicles that meet their needs, she says. Overall, says Phillips, the revised label should help make car buying "an easier, more pleasant experience."

Coming to Your Next New Car

With the announcement of the label, the DOT and EPA noted that new fuel economy standards adopted for passenger cars and trucks built in model years 2012 through 2016 will save an estimated 1.8 billion barrels of oil over the life of the program and will save the average consumer $3,000 in fuel costs.

The agencies in 2012 also developed the next generation of fuel economy and greenhouse-gas emissions standards for model-year 2017-'25 passenger vehicles, requiring a fleetwide new vehicle average fuel efficiency of 54.5 mpg by 2025. That's a regulatory number; the "window sticker" fuel economy, explained in an Edmunds.com article on the Corporate Average Fuel Economy, or CAFE rules will be more in the range of 36-42 mpg.

Time will tell how well it worked, but the intent of the revised fuel economy labels is to trigger a dramatic shift in the way that people perceive and evaluate the vehicles they drive.

Danny King contributed to this report.