No Letter Grade: The Car Industry Breathes A Sigh Of Relief

May 23, 2011

According to a recent article in the Wall Street Journal, the Obama administration has abandoned the idea of using letter grades to reflect the fuel economy and greenhouse gas emissions of new cars. Instead, the administration is expected to announce a new, revised system that will take the place of the existing price and fuel economy stickers affixed to new vehicles.

Existing labels estimate the miles a car owner can expect to drive on a gallon of gasoline under ideal conditions. It allows consumers to make a more informed choice when comparing which new vehicle to purchase. Both the EPA and National Highway Traffic Safety Administration (NHTSA) want to improve the current system starting with the 2012 model year.

The auto industry was not happy with the proposed letter grade system. Vehicles would be assigned a letter—from A to D—based on fuel economy and emissions. However, it was expected that only electric cars and plug-in hybrids would get the highest grade. The auto industry felt the system would confuse consumers because they wouldn’t immediately understand why most cars would not receive an “A” rating. They also didn’t like the government making subjective value judgments about new vehicles.

A number of environmental groups had lobbied for the letter grades. The WSJ article quotes one as being disappointed with the Obama administration over the announcement to cancel the proposed letter grade system.

The Wall Street Journal article also stated that the Obama administration will announce details of the new sticker system this week. The system is expected to fulfill its objective to help consumers compare one vehicle’s gasoline costs and emissions to another.

[Wall Street Journal]

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