Car Dealers Give Proposed New Fuel Economy Label a Failing Grade

September 7, 2010

Last week, the Environmental Protection Agency submitted three fuel economy label concepts for public review. One of those designs—referred to in the agency’s seven-page brochure as “Label 1″—was a large sticker with a prominently displayed letter grade that would be given to every auto model that goes on sale in the United States. The grades range from D to A+ based on a fuel economy grading system whose details aren’t available and are probably yet to be finalized.

The National Automobile Dealers Association and Alliance of Automobile Manufacturers both came out against that option, saying that the letter grades would confuse consumers and be unfair. “The proposed letter grade falls short because it is imbued with school-yard memories of passing and failing,” said Dave McCurdy, the president and CEO of the Auto Alliance.

The EPA is determined to move forward with some form of new labeling scheme and is currently reviewing feedback for the three proposed designs during a 60-day public comment period. “New fuel economy labels will keep pace with the new generation of fuel efficient cars and trucks rolling off the line, and provide simple, straightforward updates to inform consumers about their choices in a rapidly changing market,” said EPA Administrator Lisa Jackson in a press release.

But whether a letter grading system is the best way to do that is a question that has yet to be answered. Of the NADA’s two chief criticisms, the possibility that consumers could be confused by letter grades or an overabundance of information on the stickers is the most valid. For example, if a shopper is in the market for an SUV and finds that all of the vehicles he is considering have the same vaguely-defined rating, would he be inclined to ignore fuel economy entirely in his decision process—even when an extra 2 mpg could pay significant dividends in terms of fuel costs and emissions?

The EPA does have an interest in alerting consumers to which vehicles pass, fail and lead the class in fuel economy, but in order for a letter-grading system to be successful it would have to be designed to be straight-forward and understandable to consumers that aren’t used to relying on fuel economy as one of their chief considerations in purchasing a new car or truck. If the EPA fails to accomplish this, letter grades—or even the stickers themselves—risk following in the path of the DHS’s all-but-forgotten color-coded terrorism alert system.

The EPA is encouraging anyone interested in weighing in on the new labels to do so on its website.


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  • Anonymous

    Informed consumers are the enemy of car dealerships. When a salesman tries to up-sell a buyer to a larger (higher profit) vehicle, saying “hey, it’s only a couple grand more!” the window sticker will refute that claim, demonstrating that it’s a couple grand plus a few more grand in fuel costs too!

    Keep the letter grade EPA!

  • usbseawolf2000

    Under the proposed letter grading system, Chevy Volt will get a better grade than the Plugin Prius because it simply takes account of emission from the exhaust (not electricity from the plug).

    United States Department of Energy did a very detail research and found the opposite is true. The longer the EV range, the higher the greenhouse gas emission. The report shows the greenhouse gas break-even point (Figure 6.10) is at about 15 miles on electric and yet still displace about half of petroleum consumption of a standard hybrid.

    Quote from executive summary on greenhouse gas emissions:

    “PHEVs achieve greater petroleum energy savings with increased electric range. Conversely, more GHG emissions are produced with increased electric range unless renewable or nonfossil electricity generation is used for recharging.”

    http://www.ipd.anl.gov/anlpubs/2010/06/67242.pdf

  • DC

    What exactly is wrong with a gradeing system? It is simple, to the point method of showing where a car sits on the gas-burning scale. But i can see why the slimeballs, sorry, car salesman would object to this system. New car sales are almost always ego and or impulse driven. IOW people are far more likely to buy based on such critical metrics like, what color there new gas-burning trash bin is, or how “cool” it looks, or how heavily armored it is etc. Rarely, if ever taken into consideation is how efficent it is, or how much polllution it generates, at least relative to other gas-burners that is. A huge, impossible to ignore sticker that goes in some way illustrate these facts in an hard-to-ignore format would certainly make for more interesting conversations on lots I would think. Salesman would no doubt find themselves in the awkward position of explaining why so many N.A. models have “C” or “D” rateings(or worse) and a lot of imports dont…

  • PatrickPunch

    National Automobile Dealers Association = crybaby?

  • JamesDavis

    If they keep the grading system, which I hope they do, all the big three, Chrysler, GM, and Ford, American made vehicles will have ‘D’ ratings and all the foreign made vehicles will have a ‘B’ or ‘A’ rating. If we kept the rating system, no one except the ‘thoughtless’ will buy American vehicles.

  • Charles

    Umm… Getting 12mpg to go to work alone is worthy of a failing grade.

  • Anonymous

    Wow … why am I not surprised.

    Inform the customers that the car you have on the lot stinks? What are they thinking? Customers should not know anything and just buy what the dealer sells them – no questions asked, no outside information what so ever! The dealer knows what is good for you!

  • Rob D

    First of all, I would like my next car to get at least double the mileage of my current Honda Accord (23 mpg combined). Now, on to the issue of “grading” the fuel economy of vehicles. I do not want some government agency with its own agenda giving letter grades to vehicles. Give the consumer some credit please for being able to comprehend a little more complex information than a letter grade. And so far as the comment that “2 mpg” is going to make a big difference in the money spent of gas??? Come on. The difference is very minor. Anyone that is looking for better fuel economy is looking for a much more significant difference than 2 mpg.

  • ACAGal

    I like the grades. Keep the ratings simple enough for those who don’t have time, or ability to read.
    Keep the explanations for those who want to know the what, and why of the ratings.

  • m

    i doubt the average citizen would wish for car dealers to have a voice in any policies related to carbon emissions and fuel economy. i certainly hope they don’t have any privileged influence in this matter. beyond that they are notoriously self-interested, the most expensive car (sports car and large suvs) will have lower grades. dealerships aren’t objecting to the letter grading system as much as they’re objecting to any large clear display of a relative fuel efficiencies.

  • m

    follow the link to the epa website if you want to vote for the letter grade.

  • m

    i doubt the average citizen would wish for car dealers to have a voice in any policies related to carbon emissions and fuel economy. i certainly hope they don’t have any privileged influence in this matter. beyond that they are notoriously self-interested, the most expensive car (sports car and large suvs) will have lower grades. dealerships aren’t objecting to the letter grading system as much as they’re objecting to any large clear display of a relative fuel efficiencies.

  • m

    i would also say that the version which shows you how much you *save* on gas is more confusing than the version that shows how much you *spend* on gas, because it isn’t clear to me, nor would it be clear to the average car shopper, what you’re saving *from*, and while it’s still useful for comparison, it’s not clear on an individual car basis what it means.

  • adwan n.

    Hi ,every body hybrid cars is wantted in my country due to the save in gas .

  • mk

    The letter grading would be okay if it were based on class and not every vehicle included. I agree with the dealers. There are some people that just plain need a truck or SUV. If they’re all graded a “D”. How can they choose one that might be better than another? Give the Trucks and large SUV’s a grade related to each other, Small SUV’s and cross overs, Luxury cars, compact cars, etc. Let each category have good and bad grades.

  • tapra1

    The grades range from D to A+ based on a fuel economy grading system whose details aren’t available and are probably yet to be finalized.Tech Expo