The WSJ's Numbers Guy on EPA's mileage estimates:
This fall, car buyers may suffer from a new kind of sticker shock: Mileage estimates for 2008 model-year cars will show figures much lower than in previous years. Some drops may be as high as 30%.
The cars themselves aren't changing. Instead, the U.S. Environmental Protection Agency has issued new rules for fuel-economy testing that attempt to better mirror the experiences drivers have on the road.
Critics of the EPA's current stats -- including the environmental group that proposed the change, and auto experts and consumer advocates whose independent testing showed change was needed -- generally applaud the overhaul. They say it brings more accurate information to consumers who are increasingly conscious of the environmental and financial impact of gasoline usage.
But caveats remain about the new fuel-economy labels, including their reliance on what is essentially a treadmill test of cars, which still may not accurately capture real-world performance. Also, some critics say the focus should be on annual fuel cost, not miles per gallon. Some cars with particularly high mpg ratings, including hybrids, will appear to take the biggest hit under the new rules, when in fact their advantage over lower-economy cars could end up being even greater (more on that in a bit).
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The new mpg ratings take into effect faster speeds (80 miles per hour, instead of 60) and quicker acceleration (eight miles per hour, per second, instead of 3.2.) They also consider the use of air conditioning and driving in cold weather. In general, average city mpg will drop by 12%, and highway will decline by 8%, the EPA says.
My Suburu gets about 20 MPG when it is supposed to get MPG. I'm planning on joining in the lawsuit against the EPA. I'm fairly sure that would be a good career move.
Michael Love, national regulatory affairs manager for Toyota Motor Corp., said his company suggested to the EPA that the new mileage labels emphasize annual fuel costs, rather than miles per gallon. The current labels include such an estimate, but in relatively tiny type. "You don't pay for miles per gallon," Mr. Love said. "You pay for gallons of gasoline. Using a consumption metric would be much, much easier to understand for the public, and a much better metric to use."
The EPA's Ms. Oge responded, "The fuel-economy label that we finalized is what received the highest support overall" from consumers in surveys and focus-group testing. (The annual-cost estimates include annual driving of 15,000 miles, with 55% of the miles driven in the city and 45% highway. Figures are updated each year with average fuel costs.)
Focusing on consumption rather than mpg ratings can make a big difference. Consider this example: Compare a compact car that today is labeled at 40 mpg, and a sport utility vehicle rated at 12 mpg. Suppose both are being driven 15,000 miles a year. The compact would use 375 gallons of gas a year, and the SUV would require 1,250 gallons -- or 875 gallons more than the car. Now suppose that the compact's mpg estimate drops by 20% to 32 mpg, and the SUV's drops by just 10% to 10.8 mpg. At first glance, it seems the compact has suffered more from the change. But crunch the numbers, and you'll see that 15,000 miles of driving would consume 920 more gallons in the SUV than in the compact. The small car's advantage increased by 45 gallons.
My second lawsuit against the EPA will emphasize that the fuel cost labels are wrong when gas prices change. I was mislead into believing that fuel costs would be stable!
