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New fuel economy grades could hurt car sales, dealers contend

November 12, 2010

A new window sticker proposed by the Environmental Protection Agency that would assign new cars a letter grade based on their emissions has the support of some local car buyers, but dealers are worried the labels might hurt sales.

The fuel economy stickers, which have been required to be displayed on all new cars since 1977 and were only redesigned once, in 2007, would show a letter grade from A+ to D based on the car’s carbon dioxide emissions and combined fuel economy.

It is similar to the rating system in the United Kingdom, where cars are taxed on their carbon dioxide emissions.

The rating system is designed to promote electric cars—those vehicles get an A+, while most average cars would get a B. About 1,980 models would rank in the B and C ranges, whereas only 14 current models would receive an A+.

The proposed ratings have rattled some dealers, many of whom are still recovering from one of the worst automotive sales years in nearly two decades.

The National Automobile Dealers Association opposes the new labels, which "would confuse the buying public, make vehicle purchasing decisions more difficult or treat certain automakers or fuel types unfairly," said NADA spokesman Bailey Wood.

The EPA is soliciting public comments on the letter grade label for the next two months. If the proposed labels go forward, they would apply to the 2012 model year.

A second proposal would keep the current label’s focus on fuel economy and annual fuel-cost projections. A sliding bar underneath would compare the vehicle’s fuel economy and tailpipe emissions with those of similar vehicles.

The NADA "will concentrate on" the second option, Wood said.

Dave McCurdy, CEO of the Alliance of Automobile Manufacturers, which represents Toyota, GM, Ford and eight other automakers, said Monday the rating system "falls short because it is imbued with schoolyard memories of passing and failing.

The NADA also is pitted against environmental groups on whether to use the stickers on electric and plug-in hybrid vehicles to display information about the pollution caused by generating electricity.

The dealer group said it prefers the new fuel economy and emissions information be placed on the Internet, as both the EPA and the Department of Transportation have proposed. Some environmental groups want it on the vehicle labels.