U.S. Scraps Letter Grades for Cars
Friday, May 20, 2011
U.S. Scraps Letter Grades for Cars
By: Josh Mitchell and Stephen Power, Wall Street
Journal
WASHINGTON-The Obama administration has scrapped a proposal to
assign new passenger cars a letter grade from A to D based on their
fuel efficiency, according to people familiar with the matter.
The administration was considering the letter grades as part of
a revamp of the familiar price-and-mileage labels affixed to new
cars.
Instead, the updated labels, expected to be unveiled by Obama
officials next week, will include more information designed to help
consumers judge a car's projected gasoline costs and its emissions.
But they won't include letter grades assigned by regulators, people
familiar with the proposal said.
Under the administration's proposal, released last August, the
only cars that would receive an A-plus, A or A-minus would be
electrics and plug-in hybrids, and that prompted concerns among
U.S. auto makers that specialize in bigger cars and sport-utility
vehicles.
The auto industry argued the letter grade proposal would put the
government in the position of making value judgments about
vehicles. The industry's top lobbyist at the time likened the
proposal to elementary school, and members of Congress wrote to the
administration opposing the idea.
A spokesman for the Alliance of Automobile Manufacturers, the
industry's main trade group, said Thursday that the group hadn't
seen the final proposal, but that it welcomed the idea of
more-traditional labels without letter grades.
"The addition of a large, brightly colored letter grade may
confuse the public about what is being graded and it risks
alienating the consumer who has a valid need for a vehicle that
does not achieve an 'A'" based on greenhouse gas emissions, said
Wade Newton, an Auto Alliance spokesman.
The Washington-based Safe Climate Campaign, one of a number of
environmental groups that lobbied for the letter grades, criticized
the administration's decision to drop the idea.
"It is deeply disappointing that the Obama administration
abandoned" the idea of assigning letter grades, said Dan Becker,
the campaign's director. "It's appalling that the car makers, some
of whom we bailed out, bludgeoned the administration into
submission."
Mr. Becker said the administration's decision means his group
will push harder for ambitious fuel economy targets in the
rule-making to cover 2017-2025 model-year vehicles. The
administration has already required all cars sold in the U.S. to
average 35.5 miles per gallon by 2016. It is currently in
negotiations with California, the auto industry and environmental
groups on standards for the subsequent years, and that proposal
could come out in September.
Vickie Patton, general counsel of the Environmental Defense
Fund, said that as "American families are hard hit by soaring gas
prices, the Administration has missed a vital opportunity to
empower consumers with information that can save them hard earned
money at the gas pump, strengthen our security and reduce
pollution."
The Transportation Department and the Environmental Protection
Agency, which are jointly releasing the new labels, declined to
comment. The proposal is undergoing a final review by the White
House Office of Management and Budget, according to that agency's
Web site.
A person familiar with the administration's internal
deliberations on the new labels said the agencies struggled with
how to account for the upstream emissions of electric vehicles in
states that rely heavily on coal-fired electricity. If the
government were to give such vehicles A's, the person said, "is
everyone going to go out and buy electric vehicles that actually
pollute the environment?"
"Even within agencies, there were differences of opinion" on
whether to grade vehicles, the person said, adding that
administration officials ultimately concluded that letter grades
would be "very subjective."