Passenger Automobile Average Fuel Economy Standards; Proposed Decision to Grant Exemption |
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Topics: National Highway Traffic Safety Administration
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L. Robert Shelton
February 4, 1998
[Federal Register: February 4, 1998 (Volume 63, Number 23)]
[Proposed Rules]
[Page 5774-5777]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04fe98-24]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 531
[Docket No. NHTSA-97-3205; Notice 1]
Passenger Automobile Average Fuel Economy Standards; Proposed
Decision to Grant Exemption
AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.
ACTION: Proposed decision.
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SUMMARY: This proposed decision responds to a joint petition filed by
Lamborghini and Vector requesting that each company be exempted from
the generally applicable average fuel economy standard of 27.5 miles
per gallon (mpg) for model years 1998 and 1999, and that lower
alternative standards be established. In this document, NHTSA proposes
that the requested exemption be granted and that alternative standards
of 12.4 mpg be established for MYs 1998 and 1999, for Lamborghini and
Vector.
DATES: Comments on this proposed decision must be received on or before
April 6, 1998.
ADDRESSES: Comments on this proposal must refer to the docket number
and notice number in the heading of this document and be submitted,
preferably in two copies, to: US Department of Transportation Docket
Management, PL-401, 400 Seventh Street, S.W., Washington, DC 20590.
Docket hours are 10:00 a.m. to 5:00 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Ms. Henrietta Spinner, Office of
Market Incentives, NHTSA, 400 Seventh Street, SW, Washington, DC 20590.
Ms. Spinner's telephone number is: (202) 366-4802.
SUPPLEMENTARY INFORMATION:
Statutory Background
Pursuant to 49 U.S.C. section 32902(d), NHTSA may exempt a low
volume manufacturer of passenger automobiles from the generally
applicable average fuel economy standards if NHTSA concludes that those
standards are more stringent than the maximum feasible average fuel
economy for that manufacturer and if NHTSA establishes an alternative
standard for that manufacturer at its maximum feasible level. Under the
statute, a low volume manufacturer is one that manufactured (worldwide)
fewer than 10,000 passenger automobiles in the second model year before
the model year for which the exemption is sought (the affected model
year) and that will manufacture fewer than 10,000 passenger automobiles
in the affected model year. In determining the maximum feasible average
fuel economy, the agency is required under 49 U.S.C. 32902(f) to
consider:
(1) Technological feasibility
(2) Economic practicability
(3) The effect of other motor vehicle standards of the Government on
fuel economy, and
(4) The need of the United States to conserve energy
The statute at 49 U.S.C. 32902(d)(2) permits NHTSA to establish
alternative average fuel economy standards applicable to exempted low
volume manufacturers in one of three ways: (1) A separate standard for
each exempted manufacturer; (2) a separate average fuel economy
standard applicable to each class of exempted automobiles (classes
would be based on design, size, price, or other factors); or (3) a
single standard for all exempted manufacturers.
Background Information on Lamborghini and Vector
Vector Aeromotive Corporation (Vector) and Automobili Lamborghini
S.p.A. (Lamborghini) are small automobile manufacturers that each
produce a single model of high priced, uniquely designed exotic sport
vehicles. Lamborghini is an Italian manufacturer of passenger cars,
which concentrates exclusively on the production of high quality, high
performance, prestige sports cars. Lamborghini currently produces one
model, the Diablo. Vector, a domestic low volume manufacturer, also
marketing exotic high performance sports cars, was originally founded
as the ``Vector Car'' Company. The assets of Vector Car were purchased
by the Vector Aeromotive Corporation in 1987, and Vector completed
redesign and engineering of its first production car, the Vector W8.
The W8 has been partially redesigned and is now sold as the Avtech/M12.
Vector produced a total of 43 automobiles in the 1996 and 1997 model
years while Lamborghini imported 54 cars into the U.S. in the same time
period.
Need for a Joint Petition for Lamborghini and Vector
Although they manufacture different automobile lines, Lamborghini
and Vector are both controlled by V-Power Corporation. V-Power is the
largest shareholder of Vector, owning 57 percent of the stock; the
remaining 43 percent of Vector is publicly traded on NASDAQ. V-Power
also has a
[[Page 5775]]
controlling interest in Lamborghini, owning 50 percent of Lamborghini's
stock. For MYs 1998 and 1999, Lamborghini's and Vector's combined
worldwide production will be less than 10,000 automobiles. As both
companies are controlled by V-Power, any alternative CAFE standard
would apply to Lamborghini and Vector together, and a single petition
can be submitted for a single alternative standard, applicable to the
combined fleet of these companies.
NHTSA's regulations on low volume exemptions from CAFE standards
state that petitions for exemption are to be submitted ``not later than
24 months before the beginning of the affected model year, unless good
cause for later submission is shown.'' (49 CFR 525.6(b).)
NHTSA received a petition from Vector Aeromotive Corporation on
August 14, 1996 seeking an exemption for Lamborghini and Vector for the
1998 model year. A second petition, seeking an exemption for the 1999
model year, was submitted by Lamborghini and Vector August 27, 1997.
These petitions were timely filed under 49 CFR 526.6(b). This
section requires that petitions ``be submitted not later than 24 months
before the beginning of the affected model year, unless good cause for
late submission is shown.'' Agency action regarding the MY 1998
petition was delayed at the request of Lamborghini and Vector. Due to
this delay, NHTSA is now acting on both the 1998 and 1999 model year
petitions.
Methodology Used to Project Maximum Feasible Average Fuel Economy Level
for Lamborghini/Vector
Baseline Fuel Economy
To project the level of fuel economy which could be achieved by
Lamborghini/Vector in MYs 1998 and 1999, the agency considered whether
there were technical or other improvements that would be feasible for
these vehicles, and whether or not the company currently plans to
incorporate such improvements in the vehicles. The agency reviewed the
technological feasibility of any changes and their economic
practicability.
NHTSA interprets ``technological feasibility'' as meaning that
technology which would be available to Lamborghini/Vector for use on
its MY 1998 and 1999 automobiles, and which would improve the fuel
economy of those automobiles. The areas examined for technologically
feasible improvements were weight reduction, aerodynamic improvements,
engine improvements, drive line improvements, and reduced rolling
resistance.
The agency interprets ``economic practicability'' as meaning the
financial capability of the manufacturer to improve its average fuel
economy by incorporating technologically feasible changes to its
automobiles. In evaluating that capability, the agency has always
considered market demand as an implicit part of the concept of economic
practicability. Consumers need not purchase what they do not want.
In accordance with the concerns of economic practicability, NHTSA
has considered only those improvements which would be compatible with
the basic design concepts of Lamborghini and Vector automobiles. Since
NHTSA assumes that Lamborghini and Vector will continue to build exotic
high performance cars, design changes that would remove items
traditionally offered on these cars, such as reducing the displacement
of their engines, were not considered. Such changes to the basic design
would be economically impracticable since they might well significantly
reduce the demand for these automobiles, thereby reducing sales and
causing significant economic injury to the low volume manufacturer.
Technology for Fuel Economy Improvement
The nature of Lamborghini and Vector vehicles generally do not
result in high fuel economy values. Also, Lamborghini and Vector lag in
having the latest developments in fuel efficiency technology because
suppliers generally provide components and technology to small
manufacturers only after supplying large manufacturers.
Lamborghini/Vector state that the requested alternative fuel
economy value represents the best possible CAFE that Lamborghini/Vector
can achieve for MYs 1998 and 1999. However, the joint alternative fuel
economy values sought, 12.4 mpg, represents a decrease from 12.5 mpg in
MY 1997. The fuel economy decrease from MY 1997 is attributed to
Lamborghini/Vector's projection that Vector sales will increase in MY
1998 from the MY 1997 level and remain steady for MY 1999 while
Lamborghini sales will remain constant. Therefore, fuel economy will
decrease from the 1997 level because of the projected increased sales
of Vectors, which have lower fuel economy values than Lamborghinis.
Despite these qualifications, the following describes how
Lamborghini and Vector maximize their respective vehicles' fuel economy
by using state of the art materials and technologies for their
vehicles.
Lamborghini and Vector vehicles share a common engine designed and
produced by Lamborghini. This engine is a 5.7 liter V-12 that produces
550 horsepower. Fuel is delivered to the engine through a computer-
controlled multipoint fuel injection system. Aluminum alloy is used for
all major castings like the engine crankcase, cylinder heads, induction
manifold, gearbox, and axle. The Lamborghini V-12 is a highly efficient
engine which produces extremely high output for its displacement. While
the fuel efficiency of the Lamborghini and Vector vehicles could be
improved through the use of a smaller engine, redesign or replacement
of the current engine would require Lamborghini and Vector to invest
resources in an endeavor which would most likely reduce the demand for
their vehicles.
In keeping with the high performance character, Lamborghini and
Vector vehicles are designed to provide a structure that is both strong
and lightweight. Vector uses a semi-monocoque structure and a steel
roll cage with body panels fabricated from carbon-reinforced composite
fiber glass. Front suspension consists of independent, unequal length
A-arms with concentric coil shock absorbers and anti-dive
characteristics. Rear suspension is parallel link, concentric coil
springs with anti-squat characteristics. The hydraulic brake system
includes vacuum assist, quad cylinder calipers and ventilated discs.
The Lamborghini Diablo chassis uses space frame construction with
the unstressed panels, such as the doors and trunk, made of aluminum
alloy and plastic composite. Composite and steel beams were recently
adopted for the energy absorbing bumpers.
All Lamborghini/Vector vehicles have a rear engine driving rear
wheels through five speed manual transmissions in which fifth gear
serves as an overdrive gear. Additionally, Vector vehicles are equipped
with ZF transaxle and constant velocity driveshaft joints. Both
Lamborghinis and the Vectors rely on wide low aspect ratio tires to
provide maximum traction and performance.
Lamborghini/Vector vehicles achieve a very high level of
performance by incorporating an efficient powerplant with a lightweight
structure. Much of the technology used to improve fuel economy in other
vehicles is already employed by Lamborghini/Vector to enhance
performance. Any further improvements in fuel economy in these vehicles
through the use of a smaller powerplant, tires with less rolling
resistance, or lower axle ratios would be
[[Page 5776]]
contrary to the essential characteristics of the vehicles and their
position in the marketplace.
Model Mix
The Vector Avtech/M12 and Lamborghini Diablo are similarly sized
vehicles sharing a common V-12 engine. Therefore, any opportunity to
improve fuel economy by changing model mix would be dependent on
introduction of new models or engines. In any event, changing the model
mix would have a negligible effect on fuel economy due to the
inherently low fuel economy of these ultra high performance coupes.
The Effect of Other Vehicle Standards
Federal Motor Vehicle Safety Standards and other regulations have
an adverse effect on fuel economies of Lamborghini and Vector vehicles.
These standards include 49 CFR part 581, Bumper Standard, Standard No.
214, Side impact protection, Standard No. 208, Occupant crash
protection and Standard No. 201, Occupant protection in interior
impact. These standards tend to reduce achievable CAFE levels, since
they result in increased vehicle weight. Engineering resources are
necessarily devoted to meeting the standards, since, in order to remain
in the market, Lamborghini/Vector must meet these mandatory standards.
The Need of the United States to Conserve Energy
The agency recognizes there is a need to conserve energy, to
promote energy security, and to improve balance of payments. However,
as stated above, NHTSA has tentatively determined that it is not
technologically feasible or economically practicable for Lamborghini/
Vector to achieve an average fuel economy in MYs 1998 and 1999 above
the levels set forth in this proposed decision. Granting an exemption
to Lamborghini/Vector and setting an alternative standard at that level
would result in only a negligible increase in fuel consumption and
would not affect the need of the United States to conserve energy. In
fact, there would not be any increase since Lamborghini/Vector cannot
attain the generally applicable standards. Nevertheless, the agency
estimates that the additional fuel consumed by operating the MYs 1998
and 1999 fleets of Lamborghini/Vector vehicles at the projected CAFE of
12.4 mpg for MYs 1998 and 1999 is insignificant compared to the fuel
used each day by the entire U.S. motor vehicle fleet for passenger cars
in 1996.
Maximum Feasible Average Fuel Economy for Lamborghini/Vector
The agency has tentatively concluded that it would not be
technologically feasible and economically practicable for Lamborghini/
Vector to improve the fuel economy of their MY 1998 and 1999 fleets
above an average of 12.4 mpg, and that the national effort to conserve
energy would not be affected by granting the requested exemption and
establishing an alternative standard.
Proposed Level and Type of Alternative Standard
NHTSA tentatively concludes that the maximum feasible average fuel
economy for Lamborghini/Vector is 12.4 mpg in MY 1998 and 12.4 mpg in
MY 1999. The agency also tentatively concludes that it would be
appropriate to establish a separate standard for Lamborghini/Vector
rather than to set standards for a vehicle class or a single standard
for exempt manufacturers. Neither of these two options are available
for the model years in question because of actions previously taken by
the agency.
NHTSA has already established an alternative standard for Rolls
Royce of 16.3 mpg for MYs 1998 and 1999. The agency has also granted a
petition from Mednet, Inc. (successor company to Dutcher Motors) for an
alternative standard of 17.0 mpg for MYs 1996-98. Therefore, the agency
cannot set a standard for a class or a single standard for all exempted
manufacturers for MYs 1998 and 1999.
Regulatory Impact Analyses
NHTSA has analyzed this proposal and determined that neither
Executive Order 12866 nor the Department of Transportation's regulatory
policies and procedures apply. Under Executive Order 12866, the
proposal would not establish a ``rule,'' which is defined in the
Executive Order as ``an agency statement of general applicability and
future effect.'' The proposed exemption is not generally applicable,
since it would apply only to Lamborghini Automobili and Vector
Aeromotive as discussed in this notice. Under DOT regulatory policies
and procedures, the proposed exemption would not be a ``significant
regulation.'' If the Executive Order and the Departmental policies and
procedures were applicable, the agency would have determined that this
proposed action is neither major nor significant. The principal impact
of this proposal is that the exempted company would not be required to
pay civil penalties if its maximum feasible average fuel economy were
achieved, and purchasers of those vehicles would not have to bear the
burden of those civil penalties in the form of higher prices. Since
this proposal sets an alternative standard at the level determined to
be the maximum feasible levels for Lamborghini/Vector for MYs 1998 and
1999, no fuel would be saved by establishing a higher alternative
standard. NHTSA finds in the Section on ``The Need of the United States
to Conserve Energy'' that because of the small size of the Lamborghini/
Vector fleet, the incremental usage of gasoline by Lamborghini/Vector's
customers would not affect the nation's need to conserve gasoline.
There would not be any impacts for the public at large.
The agency has also considered the environmental implications of
this proposed exemption in accordance with the National Environmental
Policy Act and determined that this proposed exemption, if adopted,
would not significantly affect the human environment. Regardless of the
fuel economy of the exempted vehicles, they must pass the emissions
standards which measure the amount of emissions per mile traveled.
Thus, the quality of the air is not affected by the proposed exemptions
and alternative standards. Further, since the exempted passenger
automobiles cannot achieve better fuel economy than is proposed herein,
granting these proposed exemptions would not affect the amount of fuel
used.
Interested persons are invited to submit comments on the proposed
decision. It is requested but not required that two copies be
submitted.
All comments must not exceed 15 pages in length (49 CFR 553.21).
Necessary attachments may be appended to these submissions without
regard to the 15 page limit. This limitation is intended to encourage
commenters to detail their primary arguments in a concise fashion.
If a commenter wishes to submit certain information under a claim
of confidentiality, three copies of the complete submission, including
purportedly confidential business information, should be submitted to
the Chief Counsel, NHTSA, at the street address given above, and two
copies from which the purportedly confidential business information has
been deleted, should be submitted to the Docket Section. A request for
confidentiality should be accompanied by a cover letter setting forth
the information specified in the agency's confidential business
information regulation [49 CFR Part 512].
All comments received before the close of business on the comment
closing indicated above for the proposal
[[Page 5777]]
will be considered, and will be available for examination in the docket
at the above address both before and after that date. To the extent
possible, comments filed after the closing date will also be
considered. Comments received too late for consideration in regard to
the final rule will be considered as suggestions for further rulemaking
action. Comments on the proposal will be available for inspection in
the docket. NHTSA will continue to file relevant information as it
becomes available in the docket after the closing date, and it is
recommended that interested persons continue to examine the docket for
new material.
Those persons desiring to be notified upon receipt of their
comments in the rules docket should enclose a self-addressed, stamped
postcard in the envelope with their comments. Upon receiving the
comments, the docket supervisor will return the postcard by mail.
List of Subjects in 49 CFR Part 531
Energy conservation, Fuel economy, Gasoline, Imports, Motor
vehicles.
In consideration of the foregoing, 49 CFR Part 531 is proposed to
be amended as follows:
PART 531--[AMENDED]
1. The authority citation for part 531 would continue to read as
follows:
Authority: 49 U.S.C. 32902; Delegation of authority at 49 CFR
1.50.
2. In section 531.5, the introductory text of paragraph (b) is
republished for the convenience of the reader and paragraph (b)(10)
would be revised to read as follows:
Sec. 531.5 Fuel economy standards.
* * * * *
(b) The following manufacturers shall comply with the standards
indicated below for the specified model years:
* * * * *
(10) Automobili Lamborghini S.p.A./Vector Aeromotive Corporation.
------------------------------------------------------------------------
Average
fuel
economy
Model year standard
(miles
per
gallon)
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1995......................................................... 12.8
1996......................................................... 12.6
1997......................................................... 12.5
1998......................................................... 12.4
1999......................................................... 12.4
------------------------------------------------------------------------
* * * * *
Issued on: January 29, 1998.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 98-2695 Filed 2-3-98; 8:45 am]
BILLING CODE 4910-59-P