WINDOW PAIN: Making sense of sticker data in the EV era

Faced with trying to inform car buyers wanting to compare gasoline and electric vehicles, the EPA adopted the term MPGe. Turns out, it's not an easy comparison.

Buried among 8,000 public comments generated the last time the EPA redesigned the window sticker for new vehicles is this line from Tesla's then-director of public policy, James Chen: "How would consumers compare a vehicle capable of 25 mpg with an EV possessing a 56-kWh battery pack?"

That question was at the heart of a debate that played out from 2009 through 2011, when the EPA tried to better inform shoppers who were just starting to see plug-in cars parked on dealership lots alongside the familiar gasoline-powered ones. Bound on one side by regulations that defined what it had to produce and on the other by what made sense for the industry at the time, the agency adopted an awkward term, MPGe, that many consumers still don't understand and rolled out a sticker that, less than a decade later, already begs for more clarity as electric vehicles become more mainstream.

"While in principle MPGe is a good way of conveying relative efficiency, I'm not sure that it's actually meaningful to consumers, nor is energy efficiency in general for plug-in vehicles," said Sam Abuelsamid, senior analyst at Navigant Research. "Much as most consumers focus on what their monthly payment is going to be, for EVs, I think they are mostly just interested in the electric range and, in the case of PHEVs, the gas/diesel efficiency."

More changes to the sticker, formally known as the Motor Vehicle Fuel Economy Label, wouldn't be easy, fast or cheap. EPA officials say they're not looking to make any at this time. But behind the scenes at some automakers, there are rumblings that another revision is needed to highlight differences between vehicles powered by fossil fuels and those that use alternative energy sources.

The previous revision was spurred by the Energy Independence and Security Act, which President George W. Bush signed into law in 2007. The act called for a "rating system that would make it easy for consumers to compare the fuel economy and greenhouse gas and other emissions of automobiles at the point of purchase."

From those few words, the EPA spent two years listening to automakers and stakeholder groups, focus groups in four cities, an Internet survey and an expert panel. Plus, of course, thousands and thousands of public comments.

That same sort of complex process awaits anyone who wants to see today's label updated, this time to further emphasize the differences between standard gasoline-powered vehicles and those that use electricity in some fashion. No one interviewed for this article had an easy answer for what a better metric for comparison would be, and there are legal restrictions on what's possible to put on the sticker anyway.

"The consistency of information and format is significant to giving consumers a tool to use in comparing vehicles," said Stephanie Brinley, senior analyst for IHS Markit. "But emphasizing the benefits of an EV versus a gasoline engine is not the job of a federally mandated window sticker. Any redesign needs to ensure it does not include a bias toward any fuel source."

Said Abuelsamid, "I'm not a graphic designer, but I'd probably de-emphasize the MPGe information so it still complies with the law, but just making it smaller and instead focus on the [internal combustion engine] mpg and the EV's range. I would also maybe amplify the charging time and include Level 1, 2 and 3 [charger] times. Those are numbers that are meaningful to a traveler."

For advocates of an update, the good news is there are a few ways to jump-start the process. The EPA is bound by a federal rule-making process, so outside organizations — EV advocacy groups or the automakers — could request meetings and petition for a change. The EPA could recommend a change because of new data on an existing issue; for example, increased EV sales. Or Congress or the president could get involved.

"EPA is always interested in data and information about how consumers utilize the label and if there is an unmet need," an agency spokesperson said. "That said, currently, we do not have plans to initiate a rule-making that would change or update the label. EPA is always interested in hearing from stakeholders about our label, particularly if they have relevant data to share that sheds light on whether and how the label achieves the goal of informing consumers about fuel economy across the full suite of vehicle choices."

During the revision process, the EPA said it heard loud and clear that consumers wanted one label that would let them compare vehicles, regardless of the type, powertrain or kind of fuel. "The current label does just that," the spokesperson told Automotive News.

What is MPGe?

Decoding the EPA label
  • Fuel economy: The biggest number on the label is the estimated combined fuel economy rating, assuming 55% city driving and 45% highway. For electrified vehicles, the EPA uses "miles per gallon equivalent," or MPGe, which shows how far they can go on fuel with the same energy content as a gallon of gasoline. A plug-in hybrid label displays 2 numbers: one using only electricity and one using only gasoline.
  • Fuel consumption rate: This value shows how much gasoline or electricity is consumed per 100 miles. The EPA says it’s more meaningful when comparing costs and energy consumption between 2 vehicles than the fuel economy rating, even though it’s printed much smaller.
  • Charging time: How long it takes to charge the battery using a 240-volt (Level 2) charger. Bigger batteries generally have longer charging times, and charging times approximately double when using a standard household outlet.
  • Driving range: Approximately how far the vehicle can be driven on a fully charged battery. For plug-in hybrids, the range is divided into electric and gasoline modes.
  • 5-year comparison: The label compares the vehicle’s estimated fuel cost to that of an average vehicle, based on driving 15,000 miles per year for 5 years. It’s calculated based on projections for gasoline and electricity prices that are updated annually.
  • Annual fuel cost: Estimated cost of fuel per year, based on 15,000 miles and the current year’s projected gasoline and electricity prices.
  • Greenhouse gas rating: A 1-to-10 rating based on a vehicle’s greenhouse gas emissions, which correlates to its fuel economy. Full electric vehicles receive a 10 because they produce no emissions.
  • Smog rating: A 1-to-10 rating based on the amount of air pollutants emitted. EVs get a 10.
  • Emissions: How much carbon dioxide is produced, in grams per mile.
  • Greenhouse gas rating: A 1-to-10 rating based on a vehicle’s greenhouse gas emissions, which correlates to its fuel economy. Full electric vehicles receive a 10 because they produce no emissions.
Source: fueleconomy.gov

The fuel economy sticker has long been a small but contested piece of real estate. It is required to be displayed on all new vehicles sold in the U.S. and gives shoppers bite-size information about the vehicle's mpg rating and estimated fuel costs. The 2011 revisions, which were optional for the 2012 model year and compulsory starting with the 2013 model year, added greenhouse gas and smog ratings, a place for savings estimates for fuel-efficient vehicles and a new metric: MPGe.

MPGe stands for "miles per gallon equivalent." A slew of alternatives were debated before this metric was applied for vehicles that use something other than gasoline or diesel for power. MPGe, developed by a number of federal agencies, won out because it was the easiest to compare the efficiency of one vehicle with another, regardless of powertrain.

The MPGe for a plug-in vehicle expresses how many kilowatt-hours it takes to go 100 miles compared to 33.70 kWh, which is the amount of energy in a gallon of gasoline. An EV that uses 25 kWh to go 100 miles would get 134.8 MPGe, for example. MPGe is the official way that the industry answers Tesla's question about the 25 mpg car and the EV with a 56-kWh battery.

The use of MPGe allows analysis of data throughout the federal government's reporting on automotive trends. In its most recent annual report on carbon dioxide emissions and fuel economy, for example, the EPA says it uses MPGe "in order for data from alternative fuel vehicles to be merged with data for gasoline and diesel vehicles." This report, from January 2018 and covering 2016 data, says alternative-fuel vehicles are "in fact beginning to have a measurable and meaningful impact on overall new vehicle fuel economy and CO2 emissions" and "increased the overall MY 2016 adjusted fuel economy by 0.1 mpg compared to what it otherwise would have been."

The companies with the biggest gains to their corporate average fuel economy were BMW (up 0.4 mpg specifically due to alternative-fuel vehicles), Volvo (0.3 mpg), Ford and Nissan (both up 0.2 mpg). In other words, plug-ins are playing a bigger role, which means MPGe is becoming more important.

"Showing MPGe is a decent step but imperfect," said Ed Kim, vice president of industry analysis at AutoPacific, "especially when trying to show the cost of ownership, as utility rates vary wildly across the country."

The number isn't necessarily well-understood. The Argonne National Laboratory had warned during the revision process that the sticker "should not mislead consumers into thinking that one can convert kWh of electricity to gasoline in the same fashion as converting miles into km or gallons into liters. Suggesting this could be the case misleads and confuses the public and is scientifically flawed."

'Arbitrary metric'

Honda argued that using MPGe would be "problematic." It said, "The most useful metric that can be provided to consumers is 'miles per purchased unit of energy.' "

The group Securing America's Future Energy said, "MPGe is an arbitrary metric that promotes efficiency for efficiency's sake. Few people would understand what it meant. If they did understand it, even fewer would care."

There were more supporters than opponents, with many saying that the prime benefit was the ability to compare powertrains. Tesla, Toyota, Ford and Nissan were all in favor.

"MPGe is still useful because it compares a relatively low-volume vehicle type and gives context to shoppers who might be wondering how to make sense of a car that runs on only electricity," Brian Moody, executive editor of Autotrader, told Automotive News. "There is room for window stickers, in the future, that would compare various transportation types to each other in terms of overall cost, not just fuel economy.

This total cost-to-own equation might help consumers who are getting wise to the fact that EVs cost more to buy even though the fuel may be less expensive."

A proposal during the redesign discussion for overall letter grades at the top of each label was dismissed, in part because it was opposed by many automakers, including General Motors, Nissan, Volvo and Suzuki. Adding a SmartWay logo to indicate environmental performance was considered and dropped as well, with the Alliance of Automobile Manufacturers and Toyota coming out against it.

Tesla supported moving the bulk of the information to the EPA's website because "the labels should be straightforward and contain information that is both relevant and easy to understand."

Different EPA stickers

 

In addition to the MPGe rating, the EPA added two 1-to-10 scales to each sticker: one showing the vehicle's relative fuel economy and greenhouse gas emissions and the other its smog rating.

Tesla was among the supporters of these scales, saying they were similar to the EnergyGuide scale used for appliances and thus familiar to customers.

Plug-in hybrids are especially difficult for consumers to evaluate using the current label because the cost to operate can vary greatly depending on how much the vehicle runs on electrons vs. fossil fuels.

The EPA rejected a proposal to list estimates for all-electric and all-gasoline modes in addition to the opaque combination it ultimately adopted.

Ford said the additional numbers could create confusion because "most people who purchase a plug-in will plug it in on a regular basis, and will not travel an entire year without using any electricity — so the annual cost assumptions in the 'gas only' box are not relevant to the plug-in customer."

The EPA instead opted for a five-year cost estimate "based on standard driving schedules" — a phrase that can leave consumers guessing.

A critical piece of information that most vehicle shoppers seek, of course, is how much it will cost them to drive a particular vehicle. The EPA tried to answer that more meaningfully by having the sticker include an estimate of how much an owner will spend on fuel compared with the average new vehicle.

Maragno: Buyers look beyond label

Still important?

"Could the label be improved? Yes, of course," said Brian Maragno, director of EV marketing and sales strategy for Nissan North America. "Everything could always be improved, in particular MPGe. Until we have something where 10 of 10 people you ask understand it, you've got something there that probably needs to be changed. But I would also say there is enough information on the label to give customers a clear understanding of what they can expect, on average, for savings. I think that's really important when you're comparing an electric car versus a hybrid versus an ICE car."

A big question moving forward is whether a window sticker is even important anymore. Maragno said most EV buyers educate themselves well before they go out to kick the tires, which means lots of online research. These shoppers use discussion forums, automakers' websites and official government sites to figure out what they want before they buy. In fact, he said, the usefulness of the paper label is more as confirmation for shoppers that the vehicle they're looking at is the one they researched.

"Looking beyond the label, there is a lot that the EPA provides that really gives customers an enormous amount of information," he said. "The EV community is large and well-informed. I haven't met too many people who buy a car based solely by looking at the label that's on the car in the showroom."

You can reach Sebastian Blanco at autonews@crain.com

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