Energy Dept. wants to change how EV fuel economy is calculated

WASHINGTON — The U.S. Energy Department is proposing an update to a decades-old calculation that determines the petroleum-equivalent fuel economy of electric vehicles for NHTSA’s fuel economy standards.

The proposed rule-making is in response to a 2021 petition submitted by two environmental groups, the Natural Resources Defense Council and Sierra Club, which argued the calculation is outdated and resulted in “significantly inflated” EV fuel economy values.

“Excessively high imputed fuel economy values for EVs means that a relatively small number of EVs will mathematically guarantee compliance without meaningful improvements in the real-world average fuel economy of automakers’ overall fleets,” the petition said.

For example, applying the current calculation to a 2022 Ford F-150 Lightning electric pickup results in a rating equivalent of about 238 mpg. Under the proposed rule-making — which lowers the petroleum-equivalency factor for EVs to 23,160 watt-hours per gallon from 82,049 — the rating would be reduced to about 67 mpg.

The current calculation leads to an “overvaluation of EVs” in determining fleetwide corporate average fuel economy (CAFE) standards, allowing automakers to maintain less-efficient internal combustion engine vehicles in their fleet by using “a few EV models” to comply with the standards, the department said in its proposal.

“This runs counter to the need of the nation to conserve energy, particularly petroleum. Encouraging adoption of EVs can reduce petroleum consumption but giving too much credit for that adoption can lead to increased net petroleum use because it enables lower fuel economy among conventional vehicles, which represent by far the majority of vehicles sold,” the department said.

“Moreover,” the department continued, “contrary to the original intent behind the fuel content factor, ‘excessively high imputed fuel economy values for EVs’ can also act as a disincentive to manufacturers to produce additional EVs if manufacturers can achieve CAFE compliance with a relatively small number of EVs.”

To be sure, NHTSA is prohibited from considering the fuel economy of EVs when determining its maximum feasible CAFE standards for a given model year. However, the agency must include EVs when calculating compliance with those standards.

The Energy Department also is required to review the regulations annually and determine the appropriate petroleum-equivalent fuel economy values for EVs based on factors including specific driving patterns for EVs vs. internal combustion engine vehicles and the need for the U.S. to conserve all forms of energy. The department has not revised the calculation since 2000.

If finalized, the proposal would take effect with 2027 model year vehicles. The updated calculation also would apply to NHTSA’s forthcoming fuel economy standards, which are expected to cover 2027-31 model years.

The Alliance for Automotive Innovation, which represents major automakers and other auto companies in the U.S., in a statement Tuesday said “coordination between this and upcoming rule-makings related to greenhouse gases and fuel economy will be critical to the successful transition” to EVs.

In comments submitted Feb. 28, 2022, the alliance asked the department to coordinate its rule-making with NHTSA’s fuel economy standards, with at least an 18-month lead time.

“The growing market share of EVs adds significant complexity to the decision on whether to undertake a rule-making at this time and, if so, what actions to propose,” the group said last year. “Whatever action DOE decides to take, it needs to consider the continuing need to encourage EV investments, interactions with both NHTSA’s CAFE and EPA’s GHG rulemaking, and automakers’ reliance interests on the present [petroleum-equivalency factor] to avoid unintended consequences.”