The US Department of Energy (DOE) is proposing a significant revision in its procedures for calculating a value for the petroleum-equivalent fuel economy of EVs for use in the Corporate Average Fuel Economy (CAFE) program administered by the Department of Transportation (DOT). The change, petitioned for by the Natural Resources Defense Council and Sierra Club in 2021, would decrease the EV fuel economy values used in calculating CAFE compliance, thereby forcing automakers to either sell more EVs or to improve their other models to remain in regulatory compliance.

Background. In May 1980, as required by the Motor Vehicle Act, DOE proposed a method of calculating the petroleum-equivalent fuel economy of electric vehicles utilizing a “petroleum equivalency factor” (PEF). The rule was finalized in April 1981, and effective 21 May 1981. The seven-year evaluation program was completed in 1987, and the calculation of the annual petroleum equivalency factors was not extended past 1987.

DOE subsequently published a proposed rule for a permanent PEF for use in calculating petroleum-equivalent fuel economy values of EVs in February 1994 and obtained oral and written comments from interested parties. Based on the responses and other factors, DOE decided to modify the PEF calculation approach proposed in 1994; withdrew the 1994 proposed rule; and proposed a modified approach in a 14 July 1999, notice of proposed rulemaking.

DOE published a final rule on 12 June 2000. The PEF adopted by DOE in the 2000 Final Rule is based, in part, on the existing regulatory approach which provides procedures determining the petroleum-equivalent fuel economy of non-EV alternative fueled vehicles. The calculation procedure converts the measured electrical energy consumption of an electric vehicle into a raw gasoline-equivalent fuel economy value, and then divides this value by 0.15 to arrive at a final petroleum-equivalent fuel economy value which may then be included in the calculation of the manufacturer's corporate average fuel economy.

DOE has not updated this since the June 2000 Final Rule.

On 22 October 2021, DOE received a petition for rulemaking from the Natural Resources Defense Council (NRDC) and Sierra Club requesting that DOE update its regulations for calculating the PEF for electric vehicles. The petitioners asserted that the data underlying the current regulation are outdated, resulting in higher imputed values of fuel economy for electric vehicles.

The petitioners asserted that with this higher imputed value, a smaller number of EVs enable fleetwide compliance at lower real-world average fuel economy across an automaker's overall fleet.

Proposed PEF. In reviewing the PEF value, DOE must consider four factors:

1. Energy efficiency of the electric vehicle,

2. National average electricity generation and transmission efficiency,

3. The need of the United States to conserve all forms of energy and the relative scarcity and value to the United States of all fuel used to generate electricity, and,

4. Driving patterns of electric vehicles compared to those of gasoline vehicles.

DOE reviewed the methodology used to develop the current PEF value and its approach in light of these factors and concluded that some inputs should be updated to reflect more recent data, and that some components of the derived PEF value are not relevant to today's vehicles.

As a result, the proposed new PEF for the period of 2027-2031 is 23,160 Wh/gal. The current PEF is 80,049 Wh/gal. As examples of the impact:

(Tesla, not surprisingly, supports granting the petition to update the PEF for electric vehicles. Tesla supports stringent CAFE standards for light-duty vehicles for efficiency gains.)

DOE will accept comments regarding this proposal on or before 12 June 2023.