Secret EPA lab sets mpg ratings for U.S. cars
DETROIT — After eyeing the driver and checking under the car for bombs, a federal security guard lowers a thick barrier, allowing a car onto the test facility where the EPA helps set standards for the U.S. auto industry.
Mileage claims verified by the 175 engineers at the test facility can mean millions of potential sales for automakers with higher fuel economy standards than competitors. Conversely, it can cost billions to develop new technology and equip vehicles to meet stringent regulations.
The mpg audits performed in Ann Arbor are increasingly important, with several companies forced to restate inaccurate fuel economy figures. Hyundai, Kia, Ford, Mercedes-Benz and BMW have had to revise their claims and some have sent compensation checks to owners.
The accuracy police at the EPA have changed some of their testing, now auditing more aspects of each vehicle as a result of the misleading stickers. And the lab in Ann Arbor, which is the only federal lab to do fuel testing, continues to expand its overall capability.
All vehicles sold in the U.S. must be certified by the EPA, which issues about 1,200 labels a year. Automakers do their own testing, and the EPA audits about 15% of them.
"Consumers deserve the most accurate numbers they can get," said John O'Dell, senior analyst with Edmunds.com.
Like the tax code, the system has become very complicated and full of loopholes, said analyst Dave Sullivan of AutoPacific. The system may be broken, but until the industry can rethink how to achieve better fuel economy, there is no other way to police the testing of 330 nameplates, all equipped differently.
The lab was established in 1971 because of its proximity to Detroit's automakers, said David Haugen, director of the EPA's testing and advanced technology division.
The mandate has gone from testing catalytic converters to analyzing a wide variety of advances automakers are putting into vehicles, such as Ford EcoBoost engines, Chrysler's 9-speed transmission and the latest stop-start systems. The tests assess new technologies' impact on fuel economy and gauge whether the improvements are big enough to meet stricter mpg standards coming in the future.
"We need a world-class facility to support (the auto industry)," said Janet McCabe, Obama administration nominee for assistant administrator for the Office of Air and Radiation. The work is vital. "Climate change is no longer something to debate. It affects our lives and our world as we know it."
'SERIOUS RAMIFICATIONS'
The EPA meets regularly with other agencies and car companies, said Dan Barba, a director with the EPA lab.
Mazda officials were in Ann Arbor this month for a deep dive into their SkyActiv fuel-efficient engines; Hyundai officials were in the day before. Detroit automakers met with the EPA last year and Barba traveled to Japan in the summer to meet automakers there.
When engineers are not tearing apart technology to study it, they are conducting the five tests used to certify fuel economy claims, including cold testing and the impact of running air-conditioning. The 120,000 square feet of space now includes a new testing area that simulates a 95-degree day, said Haugen.
The engineers have also changed their own practices in the wake of the false claims.
In November 2012, Hyundai and Kia admitted to overstating the estimated fuel economy of about 900,000 vehicles sold since 2010 and they are spending millions to compensate owners.
Ford has lowered the mileage figures for a number of its models, mostly hybrids, and is reimbursing about 215,000 customers.
The companies made errors in "coast-down testing" that measures the forces on a vehicle as it coasts to a stop. The figure is fed into a dynamometer to test fuel economy on a simulated road test.
Hyundai, Kia and Ford said changes to their coast-down procedures led to inaccurate results, which led to claims that vehicles were getting better mileage than they actually were.
The errors have put a chill through the industry, said EPA senior engineer Jeff Alson. "The automakers know there are serious ramifications if caught."
'CHECKS AND BALANCES'
The EPA started coast-down auditing around 2000, but since the Hyundai errors, oversight has been stepped up. Auditing of this data has more than doubled, Alson said, alongside a move to test more aspects of each vehicle.
"You need checks and balances to see if someone is gaming the system," said Michelle Krebs, senior analyst with AutoTrader.com in Detroit. "Fuel economy is an important factor in the purchase decision and we need reliable guards."
The honor and audit system works well enough given its limited budget, O'Dell said.
The audits, in tandem with assessments of the latest technology, are given to the National Highway Traffic Safety Administration to support rule-making.
NHTSA has proposed stringent corporate average fuel economy standards to be phased in by 2025.
Every automaker has a different CAFE requirement depending on the mix and size of the vehicles it sells. But whether it is a small car or full-size pickup, all have more aggressive targets to meet.
Alson said customized targets prevent automakers that sell more trucks from being penalized. "We are trying to make all vehicles more efficient while preserving consumer choice."