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AG Nessel Urges Department of Energy to Update Calculations that Determine Compliance with Federal Fuel Economy Standards

LANSING - Michigan Attorney General Dana Nessel joined a multistate coalition in urging the Department of Energy (DOE) to update its "petroleum equivalency factor," which determines how electric vehicles are accounted for when calculating auto manufacturers' average fleetwide fuel economy under the Corporate Average Fuel Economy (CAFE) program.  

Currently, the "petroleum equivalency factor" is based on inflated and outdated data from over two decades ago, making it easier for auto manufacturers to comply with CAFE standards without making important improvements to the fuel economy of their fleet. This is at odds with Congress' goals for both the fuel economy program and the petroleum-equivalent fuel economy value: to conserve energy and incentivize the growth of the electric vehicle market. 

"As it stands, the 'petroleum equivalency factor' is inflated, outdated and does very little to incentivize auto manufacturers to improve efficiency," Nessel said. "For the sake of our planet and consumers across the country, I urge the Department of Energy to revisit and update the 'petroleum equivalency factor.'" 

Under the Energy Policy and Conservation Act, the National Highway Traffic Safety Administration (NHTSA) is required to set standards to improve fuel economy and reduce the energy consumption of passenger cars and light-duty trucks to the maximum extent feasible. Electric vehicles do not, however, use "fuel" as defined under statute, so do not have a "fuel economy" value. Congress directed DOE to assign these vehicles a value for the purposes of calculating the average fuel economy of auto manufacturers' respective fleets thereby incentivizing the development and production of these vehicles. Unfortunately, the "petroleum equivalency factor," a key component of this calculation, is based on obsolete data from over two decades ago and significantly inflates the petroleum-equivalent fuel economy value of electric vehicles. 

In their letter, the coalition encourages DOE to update the "petroleum equivalency factor" so that the petroleum-equivalent fuel economy of electric vehicles is set at an appropriate level to comport with congressional intent. 

Nessel has joined multi-state and multi-city efforts to support rigorous and stringent fuel-economy standards. In October, Nessel joined a coalition in supporting the NHTSA's proposal to increase the stringency of CAFE standards for model year 2024-2026 vehicles.  

Joining Attorney General Nessel in filing this comment letter are the attorneys general of California, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Minnesota, Nevada, New York, Oregon, Pennsylvania, Rhode Island, and Vermont, as well as the cities of Los Angeles, Oakland, and New York.