Environmental Protection Agency

            Fuel Economy Label


            Final Report
&EPA
United States
Environmental Protection
Agency

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                  Environmental Protection Agency
                           Fuel Economy Label

                                Final Report
                            Office of Transportation and Air Quality
                            U.S. Environmental Protection Agency

                                      and

                         National Highway Traffic Safety Administration
                          United States Department of Transportation
                                 Prepared for EPA by
                                     PRR, Inc.

                              EPA Contract No. GS-23F-0364P
                                   Task Order 0001
&EPA
United States
Environmental Protection
Agency
€1
%\ft7
EPA-420-R-10-909
September 2010

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     Topics
     Background	3
     Steps Involved	5
     Critical Themes	9
        Keep it Simple	10
        Provide Ability to Compare Vehicles	15
        Role of the Label in Purchase Process has Changed	22
     Label Designs for Public Comment	25
     Appendix A - Detailed Research Methodology	31
Final Report

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EPA Fuel Economy Label Redesign

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       Background
      The Environmental Protection  Agency (EPA) and the National
      Highway Traffic Safety Administration (NHTSA)  are conducting
      a joint process  to redesign the fuel economy label that is posted
      on the  window sticker of all  new  cars and  light-duty trucks
      sold in  the U.S. These changes are proposed to impact vehicles
      beginning with model year 2012. The redesigned label will provide
      information to  help American  consumers choose more efficient
      and environmentally friendly vehicles. The changes are needed to
      respond to the  Energy Independence and Security Act  (EISA) of
      2007, introduction of advanced technology vehicles such as plug-
      in hybrid electric vehicles and electric vehicles, and changes in how
      vehicles are purchased by Americans.

      A thoughtful and  thorough  process  is underway to ensure the
      public is provided the best possible tool to help  inform a decision
      that impacts their lives, their community and their environment.
      Both the research process and the design process are continuums
      involving many staff in multiple  agencies and hundreds of research
      participants. Even though research participants  were provided
      several  options to review  throughout  this  process, literally
      hundreds of options were created, modified,  and discarded prior
      to ever reaching the research participants. Designs were influenced
      and directed by staff and managers from each agency involved in
      the review process, as well as dictated by statutory requirements.

      This  report presents the key findings from the  label redesign
      research process that informed the resulting label designs proposed
      for  public  comment.  This report is intended to  provide  the
      reader with a top line  summary of significant findings from the
      multifaceted information gathering process described in the next
      section. Detailed information is  provided in the  reports generated
      following each research phase.
Final Report

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EPA Fuel Economy Label Redesign

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      Steps   Involved
      To help inform the redesign of the fuel economy label and increase the
      value of and preference for more fuel efficient vehicles, EPA engaged
      PRR Inc. to work with them in the development and implementation
      of several information gathering tasks. The following tasks were
      included and, as can be seen in Figure 1, each task informed the next
      task ultimately resulting in the redesigned labels.

        •   Literature review

        •   Focus groups (including pre-focus group online
            surveys with participants)

        •   Expert panel

            Internet survey of new vehicle buyers and intenders

      See Appendix A for a more detailed description of these research
      methodologies and their limitations.

      Literature Review
      PRR assembled and reviewed eighty articles. The primary focus of
      the review was to understand how consumers decide which vehicles
      to purchase and the factors that influence their decisions.

— T —
Expert Panel
1

Refine 2 Existing Label
Designs, Create 1 New
Label Design
Final Report

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Focus Groups
Focus group participants completed an online survey before they
took part in the discussions. The purpose of the pre-group online
survey was to obtain information regarding their vehicle purchase
process, the role of fuel economy in their purchase decision, how
they used the current fuel  economy label, and  motivators  and
barriers to purchasing advanced technology vehicles.  By gathering
this information before the focus groups we were able to use the
focus group time most efficiently.

Three phases of focus groups were conducted to acquire the desired
information.  The  three  phases and  their  in-depth discussions
addressed the following issues:

   •    Phase I - Use of the current fuel economy label, as well as
        metrics and design of the label  for conventional internal
        combustion engine vehicles.

   •    Phase II - Understandability of and preference for metrics
        on advanced technology vehicle labels.

        Phase III - Assessment of full label designs for  conventional
        and advanced technology vehicles in regard to both content
        and look.
                                           EPA Fuel Economy Label Redesign

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       Expert Panel
       A group of individuals with demonstrated experience in changing
       social norms was recruited to participate in a daylong consultation.
       Panel members came from a variety of fields in advertising, national
       educational campaigns and product introduction. Feedback received
       from this group was critical because of their unique history of creating
       dramatic shifts in social change and influencing product preference
       over short periods  of  time.  In addition to providing feedback on
       prototype label designs as constructed following the three phases of
       focus groups, panelists  were asked to provide guidance on increasing
       the value of and  preference for more efficient vehicles. Counsel
       provided by the Expert Panel was significant and compelling because
       of the exceptional credentials of each panel member, the conviction
       of their recommendations and the strong consensus  of the group.
       The very purpose of assembling this group was to receive comments
       and recommendations  from an independent group of exceptional
       individuals and bring an outside perspective.
Final Report

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                                  Internet Survey of New Vehicle Buyers and Intenders
                                  While the focus groups  and expert panel were used to develop
                                  new label designs, the internet survey will  be used to  examine
                                  how understandable the  new label designs are, and whether the
                                  proposed new labels will improve consumers' knowledge about
                                  more efficient vehicles. The survey is scheduled to begin sometime
                                  in September 2010 and will ask these types of questions  for both
                                  conventional and advanced technology vehicle labels.
29. Please rank order the top five things that would motivate you to seriously consider buying an advanced
technology vehicle (such as an electric vehicle or a plug-in hybrid electric vehicle)? Do this by checking your #1
motivator in the #1 column, checking your #2 motivator in the #2 column, etc.
                                        #1 motivator   #2 motivator  #3 motivator   #4 motivator  #5 motivator
Lower fuel costs
Vehicle and parts are reliable
Good maintenance costs
Good vehicle range
Lower cost of vehicle
Better fuel efficiency
Reduce the number of trips to the gas station
Environmental benefits
Reduce our dependence on gasoline
Other things in your top five that would motivate
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                                                                               EPA Fuel Economy Label Redesign

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      Critical   Themes
      Developing an effective label - one that conveys the required and
      desired information to consumers so  that they can understand
      and use it to make decisions - involves some inherent subjectivity.
      By this we mean that it involves the careful interpretation of the
      research results since some results are contradictory, as well as the
      fact that what is understandable and useful for one consumer may
      be confusing or unhelpful to another. Furthermore, research results
      must  be assessed in regard  to  which results are more important
      than others relative to the ultimate goal of the label. Finally, the
      label  metrics and designs are also 'negotiated'  so as to meet the
      specific requirements of the various federal agencies involved.

      In looking at all of the research results through the filters mentioned
      above we found that three key themes  emerged which guided the
      label metrics used and the designs of the labels themselves. These
      three  critical themes are:

         1.   Keep it simple -Without exception, consumers and experts
            stressed  simplicity of content and design.

         2.   Provide  the ability to compare vehicles  - Consumers cast
            a wide net when selecting a vehicle and want the ability to
            easily compare the features and benefits of multiple vehicles.

         3.   The role of the label in the purchase process has changed -
            With  the rise of internet  and social  media services, a
            significant and  growing portion of the buying process is
            now happening before buyers even visit a lot.
Final Report

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                                           Keep  It  Simple

          Consumers currently receive an
          estimated  3,000   to  5,000
          marketing messages each day. It
          has been said that  "Data is like
          food. A good  meal  is served in
          reasonably-sized  portions  from
          several food groups. It leaves you
          satisfied but not stuffed. Likewise
          with information,  we're  best
          served when we  can partake of
          reasonable,   useful  portions,
          exercising discretion in what data
          we digest and how often we seek
          it out." This is true in the vehicle
          purchasing process as well.

       ^
       http://www.nytimes.com/2007/01/15/
       business/media/15everywhere.html
        "What you put on the sticker
        needs to be simple, basic,
        because it's going to scare a lot
        of people away from the car if
        there are too many figures."
        - Chicago Male

        "It took me some time to figure
        it out [3B]. If I have to take the
        time, I won't figure it out."
        - Houston Female
Without  exception, consumers and experts  stressed extreme
simplicity for both content and design.

Many factors such as the aesthetics of the vehicle, reliability, safety,
price, and fuel economy  can influence  a consumer  decision. In
addition,  and addressed in greater detail later  in  this document,
the buying  process  is an  ever evolving  continuum that includes
consumer reliance on multiple sources to acquire information and
make their purchasing decision. The fuel economy label is just one
piece in this continuum  and should be considered in that context.

Throughout each phase  of the focus group process, and even more
pronounced with the expert panel, was the cry for simplicity. When
asked  to select  understandable designs  participants described
their selections as simple,  straight forward, and concise. The least
understandable designs  were  described  as confusing,  distracting,
and complicated. In essence, participants preferred designs that
they thought of as informative and  that presented the information
in a simple format.

The desire for simplicity  became evident immediately, especially
when focus group and expert panel participants were shown the
existing Monroney label as a reminder of the space available for
fuel economy  information as well as the context in which  this
information is provided.

Phase 1 focus group participants were provided four approaches to
represent individual metrics outside of the context of a full label. They
were  asked  to indicate which  approach was  most understandable.
Even in this  sterile environment of looking at a single metric without
other information competing  for their attention, simplicity was the
primary reason individuals gave for selecting their choice as most
understandable. Statements used included:

        Easy. Nothing difficult to understand

        Could see it right away
10
                                             EPA Fuel Economy Label Redesign

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       Simplicity  was  again  reinforced when participants were asked
       why they specifically rejected other options. Comments included
       statements such as:

              Cluttered and too busy

         •    Not reader friendly - there's too much stuff

              I get nervous when there's a lot of information

              This takes too much time and effort to figure it out

       "Familiarity" was another significant theme that emerged related
       to simplicity. Throughout the research process participants raised
       the desirability and usefulness of having information provided in
       a "familiar" manner. The term "familiar" was used  by participants
       when explaining their preferred choices  across metrics for fuel
       economy, fuel consumption and environmental impacts.

       When focus group  participants  were provided various  metrics
       intended to help them compare one vehicle to another they again
       used the terms "simple" and "familiar" to describe why they selected
       a specific metric approach over the others. This was after viewing
       rating scales represented numerically, with stars and with leaves (in
       the case of environmental impacts), as well as slider scales similar
       to the bar that exists on the current fuel economy label.

       In Phase 2  focus groups (where they were presented with a variety
       of metrics that could potentially be included on labels for advanced
       technology vehicles) and Phase 3 focus groups (where they were
       presented with full labels), participants were overwhelmed with
       the amount of  information  and therefore  favored  designs  that
       emphasized some  values/metrics with larger font sizes and  more
       prominence (so they knew what to look  at and what to compare).

       The two strongest recommendations provided by the Expert Panel
       echoed  these comments as well—keep it simple and present it in a
       way that is familiar.
Final Report                                                                                                  11

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                                           The Expert Panel was provided label designs for review that were
                                           the most current at the time. (See samples below). They understood
                                           that these designs reflected  legal requirements, directives  of  staff
                                           from multiple agencies and feedback from focus group participants.
                                           Their initial response summarized the feelings of the group: "This
                                           label is the result of negotiation, not design."

                                           Expert Panel members recognized that focus group participants
                                           had requested  specific information and in some cases wanted  it
                                           provided in great detail (such as wanting city and highway miles per
                                           gallon estimates for both electric and gas use on dual fuel vehicles).
                                           However, they rejected the need for this information to be provided
                                           in detail and in full on the label.
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12
                                                                      EPA Fuel Economy Label Redesign

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      The guiding principles they used to support their recommendations
      were  that consumers don't act on details, so information must be
      kept simple without the use of jargon, and that purchasing a car is
      an emotional decision so communications must appeal to emotions.

      The Expert Panel then offered specific recommendations regarding
      design and content that, given their experience, would effectively
      engage  the public. They referenced other successful labels when
      strongly recommending that  the  top  portion, and the greatest
      amount of space on the label, contain only one element - a "grade."
      They suggested combining as many of the desired and required
      metrics as possible into a single grading scale (A, A-, B+, B, etc.).
      The rationale is that in a simple and familiar  way, this  design
      provides  useful comparative information to the consumer who
      may only glance at it, while also providing the necessary details to
      those who want more in-depth information.

      To help demonstrate the benefits of one vehicle over another they
      also suggested prominently displaying "savings" (over five years to
      express a larger and more realistic impact) rather than "cost." They
      went  on to suggest that a website, similarly  reflecting the  desire
      for simplicity,  could be created  to provide additional detailed
      information  for those who  desired  it. It was suggested that  an
      easily remembered URL (such as  "itsimple.com") be provided to
      help reinforce the educational messages and be easy to remember.
      Recognizing the current and quickly evolving level of information
      available using mobile  devices such  as Smart Phones, the  Expert
      Panel echoed the recommendations of each focus group  phase, to
      include a QR type scan code which would provide  the consumer
      with multiple functions such as storing specific vehicle information,
      seeking additional information, and the ability to undertake side-
      by-side vehicle  comparisons.

      In the  space under  the grade they  suggested placing the URL,
      which would inform the consumer that additional information was
      available and easily accessible while providing  a natural  design
      element. The remaining space below the grade and the URL could
      be used for any remaining information required by law.
Final Report                                                                                                  13

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                                         For the Expert Panel it came down to these points:

                                            •   It is difficult for consumers to sway from routine

                                                It is critical to use only a few messages that are relevant
                                                and empower individuals to understand how their choices
                                                will make a difference

                                                Messages must address "What's in it for me?" and how
                                                making this decision will improve "my" life

                                                Keep it simple; we all yearn for simplicity

                                                Consumers don't act on details

                                                Remember the reality of very short label viewing time -
                                                roll ratings and metrics up into a single score

                                                Instead of focusing on costs, use savings information -
                                                a very strong consumer motivator

                                                Develop a website to be launched in conjunction with
                                                the new label

                                         Expert Panel recommendations provided  clarity and refinement, as
                                         well as specific tactical suggestions consistent with the findings of the
                                         literature review, pre-focus group online surveys, and focus groups.
                                         The implications of these recommendations for the label design are
                                         significant and  might seem at first glance to contradict the focus
                                         group findings. However, there is consistency in striving to provide
                                         the ability to compare within and across vehicle technologies in a
                                         simple way.
14                                                                                  EPA Fuel Economy Label Redesign

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       Provide Ability  to Compare Vehicles
       Consumers cast a wide net when selecting a vehicle and want the
       ability to easily compare the features and benefits of multiple vehicles.
       Consumers shop within and across vehicle classes
       Consumers cast a fairly wide net when selecting a vehicle, possibly
       wider than they consciously realize and report. When asked in the
       focus groups and in the pre-group online surveys if they had a specific
       vehicle in mind when they started  shopping, the vast majority said
       yes. However, more than three-fifths (63%) of respondents to the
       pre-group  online  survey reported that they seriously considered
       more than one vehicle class, with about a third of these considering
       both cars and trucks.1 It is also important to note that participants
       thought of vehicle classes in fairly broad terms that are not necessarily
       parallel to those used by EPA. Class or type of vehicle is considered
       in terms such as SUVs, sedans, mini-vans, etc. This is probably why,
       when focus group participants were given the choice of having the
       comparison information on the label be displayed as 'within class',
       'among all classes', or both, that most preferred both.

       The  fact  that  consumers  shop  across multiple vehicle classes
       throughout the buying process indicates  that  the  label has the
       potential to influence consumers to choose vehicles that are more
       fuel efficient. As  a trusted  source of fuel  economy information
       (according to 72% of pre-focus group online survey respondents),
       the EPA is in a strong position to use the redesigned fuel economy
       labels and its planned educational campaigns to aid consumers  in
       selecting more fuel-efficient vehicles.

       Consumers want the ability to easily compare
       across multiple vehicles
       Based on the above, it is no surprise  that throughout the focus groups,
       participants consistently and strongly indicated the need to  be able  to
       compare across vehicles. As reflected earlier in this document, they also
       demanded  simplicity. But, what factors allow them to compare in the
       simplest way? The literature review made clear that the top four factors
       that buyers report as influencing their vehicle choice include reliability,
       safety, price, and fuel economy (in that order). In addition, one can't
       discount the importance of vehicle  aesthetics. Put simply - the most
       reliable, safe, affordable, and fuel efficient vehicle will not be purchased
       if doesn't also, as one focus group participant said, "Speak to me!"
"There was a time when
compact car meant something,
but now there's sub-compact,
mid-sized compact; everyone
has different categories for the
same thing. You're really talking
about a small,  mid-sized or
luxury car."- Seattle Male
   It should be noted that
   participants used the terms
   'vehicle class' and 'vehicle
   type' interchangeably and how
   they grouped vehicles by type
   or class varied and did not
   necessarily match the distinct
   EPA vehicle classes.
Final Report
                                 15

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       "/ wasn't sure about the
       information it's measuring,
       but the stars make sense."
       -Seattle Male

       "I liked that it  identified the
       worst case scenario, you know
       where the 347 falls in relation
       to the scale." - Houston Male
It  is worth restating  that  the buying  process  is  a continuum
that includes  consumer  reliance on  multiple sources to acquire
information and make their purchasing decision. The fuel economy
label is just one piece in  this continuum and should be considered
in that context. To  be  effective  it needs to provide  relevant
information, be understood in  a very short amount of  time, be
compelling enough to generate the desired impact, and be presented
in such a way that it draws the attention and interest of the buyer in
the stressful, cluttered and confusing car lot environment.

Comparisons across vehicles can be made using a variety of metrics.
The following three  metrics  were selected for  further  research
exploration. Each is discussed in greater detail in this  section:

        Fuel economy/fuel consumption

   •    Fuel costs

        Environmental impacts

In Phases 1 and 3, focus group participants were shown rating scales
including numerical, iconic (such as five star  systems), and slider
scales similar to the bar that exists on the current fuel economy label
for within-class comparisons. Participants were split into two camps:
those that preferred the analytic detail of the absolute slider scales,
and those that prefer the  simplicity of a star-type rating scale.

A  major challenge to providing a  useful comparison tool is the
complexity  of advanced technology  vehicles.  If  consumers  first
encounter advanced technology vehicles on the dealer's lot, and are
not predisposed to buy  one,  a  label  that  effectively conveys the
benefits of such vehicles  would be helpful in informing consumers
and could potentially influence them to purchase such vehicles.

Three advanced technologies were covered in the Phase 2 and Phase
3 pre-group online surveys, and were a particular focus of the Phase
2 focus groups. These advanced  technology vehicles included:

        Electric Vehicles  (EV)

        Extended Range  Electric Vehicles (EREV)

   •    Plug-in Hybrid Electric Vehicles (PHEV)
16
                                            EPA Fuel Economy Label Redesign

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      When considering the implications of this research, it is important
      to remember that research participants had their first exposure to
      two of these technologies (EREV and PHEV) during the research
      process.  In the 'real' shopping experience manufacturers, news
      organizations, websites, and a host of other resources will all be
      active in increasing awareness, understanding and preference for
      these emerging technologies.

      The  combination  of  confusion  over  new  technology  and  a
      proclivity for people to  want  any information  offered,  makes  it
      easy to understand why, even in spite of their call for 'simplicity'
      in label designs, Phase 2 focus  group  participants sought as much
      detailed information as possible.

      As such, the overwhelmed participants  indicated a thirst  for
      more information. This however, did not mean that they would
      necessarily use all the information sought in  comparing vehicles,
      but  somehow having it provided them with a greater  sense of
      control. Nonetheless, when asked what the two most important
      metrics were for comparison  purposes  they  chose  consumption
      and cost. This was further supported  by  the fact that 60%  of pre-
      group online survey respondents rated fuel economy a '9'  or above
      on a 10-point importance scale. On another survey question, 40%
      indicated that  'gas mileage/fuel economy' was  the  second most
      common factor they used to compare  across the vehicles they were
      considering (second only to 'size/seating capacity/cargo capacity').

      As important as fuel consumption and fuel costs  are to consumers,
      their unfamiliarity  and  discomfort  with advanced  technology
      vehicles caused focus group participants to insist that labels for
      vehicles with  electric power include  both range  (the distance a
      vehicle could travel on one charge) and charging  time information.
      For that reason, even though we believe such information  will be
      provided  by other sources (such  as  manufacturers) or  in other
      mediums  (such as websites), both range and  charge time  appear
      on two of the three label designs for vehicles using electric power.

      Currently  consumers  compare across  vehicles using  city and
      highway MPG  figures. When participants were  probed  in  the
      Phase 3 focus groups about why they liked certain label designs,
      the familiarity of city and highway  values was often cited. The
      lack of this information was also cited for not liking those labels
"It's not really like any other
car, its miles per charge, not
MPG, it's a complete paradigm
shift. This range is probably
important, how far you go on
a charge. There isn't room
for error; it has to be awfully
accurate." - Chicago Male

"What happens if I'm driving
somewhere and I only have a
limited time to recharge? How
long will it take to recharge is
important." - Chicago Male

"I usually look at city and
highway, and then compare to
other vehicles in class."
- Seattle Female
Final Report
                                17

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       "I'm used to MPG, Using
       gallons per 100 miles is like
       teaching us the metric system."
       - Chicago Female
       2.  MPG Illusion
          http ://www. efficient-mileage .com/
          mpg-illusion.html.
that did not include it. This was further supported by results of
the pre-group online surveys where 'highway MPG', 'city MPG'
and  'combined fuel economy  compared to other vehicles'  were
rated by survey respondents as the top three most helpful pieces of
information on the current fuel economy label. Consequently, the
redesigned labels include city and highway breakouts.

Finally, the  Expert  Panel  (without knowledge that  the agencies
had already planned to introduce QR codes on the fuel economy
label due in part to the  enthusiasm for such an approach evidenced
in the focus groups) recommended that the agencies include this
technology and perhaps  launch  it by hosting a competition to
create a Smart Phone application (App) that would directly provide
users with additional vehicle information and expand consumers'
ability to compare vehicles.

Fuel economy and fuel consumption
As  discussed  above, MPG information (in  many cases  to the
exclusion  of all other label  information)  is currently used for
comparison  purposes.  Interestingly, participants  admit that this
might be because they  have been trained to do so since they first
started buying vehicles because it is by far the most prominent
information displayed on the current label.

However, MPG is not linear and can therefore be misleading. When
people compare vehicles with different MPG values they are apt to
incorrectly estimate the fuel savings of one vehicle over another. For
example, switching from a 15  MPG vehicle to a 20 MPG vehicle
will save more fuel than switching from  a 30 MPG vehicle to a 35
MPG vehicle (see MPG Illusion2). Consequently, we introduced the
option to use 'gallons per 100 miles' in the Phase 1 focus groups as
a more useful metric for fuel consumption.

The  reaction from focus  group participants  to 'gallons per 100
miles' was immediate, clear and intense - they did not understand
it and they  did not  like  it. However, once they  understood the
concept, many participants saw the value of the information, but
still did not want to see it at the cost of losing the familiar MPG
information. Consumers like and are attached to MPG. It became
clear that  if 'gallons per 100 miles'  was  to make it to the label, it
would need to be through a slow transition process, occurring over
time and in conjunction with retaining the MPG information in a
more prominent position.
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                                           EPA Fuel Economy Label Redesign

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       Advanced technology vehicles further complicate this issue with the
       need to express the consumption of electricity rather than gallons
       of any petroleum based fuel. In the Phase 2 focus groups, it became
       clear that participants did not understand the concept of a kilowatt
       hour as a measure of electric energy use in spite of the fact that they
       all receive monthly electric bills using this metric.

       For electric-only  vehicles, focus group participants favored an
       MPG equivalent,  'MPGe.' This was in spite of the fact that they
       did not understand, nor did they feel the need to understand how
       an MPGe metric was calculated. This again suggests that the desire
       for  simplicity  and familiarity outweighs  the  desire for accurate
       information.
"/ think by the time these cars get
out we'll be more used to this,
but this (kW-hr) doesn't mean
anything to me right now. Keep it
simple."- Charlotte Male
"To me, this 2.9 miles per kW-hr,
if I'm comparing it to a gasoline
car,  that doesn't help me, where
as the 98 MPGe, my brain knows
MPG."-Houston Female
       As  the  complexity  of the technology  increased, so  too did the
       complexity and number of metrics that consumers'  desired. Given
       the options presented to them, focus group participants wanted an
       MPGe that combined the MPGe of electric operation and the MPG
       of gas operation in any vehicle that could operate in  more than one
       mode of operation, such as an EREV or PHEV. In general, the more
       they were shown, the more they wanted. However, in order to stay
       true to  consumers'  greater desire for label  simplicity, a  decision
       was made to use the following fuel economy  and fuel consumption
       metrics  on the redesigned labels:

          •    MPG (city and highway, and combined)

               MPGe (city and highway, and combined)

               Gallons per 100 miles

               kW-hrs per  100 miles3

       Fuel costs
       Focus group participants reported (on the pre-group online survey,
       as well  as in the group discussions) that after the use of city MPG
       and highway MPG, they turned to annual fuel  costs when comparing
       vehicles. The use of annual fuel cost is not  surprising  given that cost
       is a major decision point for individuals and  a metric (dollars) they
       easily understand. It should be noted that research took place during
       a period of record unemployment and immediately following one of
       the worst economic crises faced by this country.
   It should be noted that the 'kW-
   hrs per 100 miles' metric was
   more confusing to focus group
   participants compared to a 'miles
   per kW-hr' metric since the
   former metric results in a lower
   number being better (that is,
   fewer kW-hrs is more efficient).
   This issue of 'the lower the
   number the better' is confusing
   because consumers think in
   terms of higher being better, as in
   MPG. The same can be said of
   'gallons per 100 miles', but when
   kW-hrs are involved the issue
   becomes even more confusing.
   However, in order to have an
   electricity consumption measure
   that would be equivalent to
   'gallons per 100 miles', it was
   decided to stick with 'kW-hrs per
   100 miles'.
Final Report
                                 19

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        "The economy is important.
        If you looked at this two years
        ago, it would be a lot more
        accurate. But a year ago, gas
        was closer to $4. I thought
        this on the lot, at $2.80- a
        gallon, the information wasn't
        accurate."- Seattle Female
        "If you're doing your budget, you
        need to know how much more
        your electric bill is and how
        much less your gas bill is."
        - Charlotte Female
However, participants made it clear that annual fuel cost is a metric
surrounded  by skepticism because they question the assumptions
upon which the cost figure is based. The current label clearly states
that the cost figure assumes 15,000 annual miles  at $2.80 a  gallon.
And yet, many focus group participants could not get beyond the fact
that - "I don't drive 15,000 miles a year and gas costs a lot more than
$2.80 where I live." In other words, participants really struggled with
the idea that the annual cost figure needs to be based on some set of
assumptions and that, regardless of which assumptions were chosen,
it could still  be used to compare one vehicle to another. Consequently,
at least in regard to use of the current label, this skepticism drove
consumers to rely even more on city and highway MPG.

The exact same skepticism was expressed  for  electricity costs,
impacting metrics used for advanced technology vehicles - "Where
I live electricity costs a lot more than 12 cents  a kilowatt hour."
The implication of this for the redesigned label is that  consumers
will continue to look for metrics with which they are familiar and
which they trust, even if they do not understand the details.

In spite of  the skepticism, in the  Phase 2 focus groups, where
participants were asked to create labels from scratch, most groups
placed a cost value on  the  label. When  probed about expressions
of a cost value, many  participants  expressed interest in cost per
mile figures, monthly  figures  and  annual cost  figures. Monthly
figures were appealing since that is how they are used to seeing
electricity costs (on their monthly electricity bill) and it is also how
they budget their money (i.e., monthly). However, in Phase 3, when
presented with labels that displayed both a monthly cost  and an
annual cost, participants suggested that the monthly  cost value
could be dropped, since they could do the math (divide by 12).

Advanced technology vehicle labels are even more complex in that some
run on both gasoline and electricity, or on a blend of both  fuels. Most
participants in the Phase  2 focus groups preferred to see costs separated
by fuel type. However, when presented  with  full label designs during
the Phase 3 focus groups, many saw the utility of a fuel cost figure that
merged all fuels. Such a  dollar figure could easily be compared across
vehicles, across different vehicle  technologies, and  even to a PHEV
(which runs  at times on a blend of gasoline and electricity). As a result
of the research, two of the designs presented here for public comment
show fuel costs expressed in annual  dollars with all fuels combined,
while the third design presents separate costs by fuel type.
20
                                             EPA Fuel Economy Label Redesign

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      Understanding that cost is a  significant influencer  for  vehicle
      purchasers and that demonstrating  the benefits of more efficient
      vehicles is critical to the EPA, the Expert Panel suggested expressing
      financial information in terms of 'savings' and expressing it over a
      five year period in order to demonstrate a larger and more realistic
      impact. It was also thought that the introduction of the five year
      savings information would  help  consumers in  overcoming the
      effects of the MPG Illusion. This use of a 'savings' metric made
      particular sense since focus group participants reported on the pre-
      group online surveys that the most compelling factor for purchasing
      fuel efficient vehicles was 'to save money.'

      The second most compelling factor  for purchasing a fuel efficient
      vehicle was because such vehicles are 'better for the environment,'
      which brings us to the third major metric category on the redesigned
      labels which can be used to compare vehicles: environmental impact.

      Environmental impact
      Most of the research included in the literature review and echoed
      in the focus  groups indicated  that consumers place  much less
      importance on the environmental impact  of vehicles, compared to
      other factors such as safety, price and fuel economy. Nonetheless,
      consumers are not opposed to, and some may welcome, an eco-label
      on their vehicle, although they say that it is unlikely to impact their
      purchase decision. Most focus group participants indicated that if
      such information was not on the label they were not likely to seek it
      out elsewhere. However, when presented with whole label designs in
      Phase 3 many participants indicated  that the environmental metric
      should be on the label to accommodate those who  were interested.
"/ care about the environment,
but when it comes to money,
I have to put my pocket book
first.  The environment isn't
going to pay my bills."
- Charlotte Female
      Participants were shown multiple options  for the presentation of
      environmental information; some separated CO2 from other pollutants,
      while some combined all pollutants; some used relative rating scales,
      while others showed actual grams of CO2. Rating scales  examined
      included those  based on relative  values, such as  a "5 leaf" rating
      system, as well  as a linear scale that had the vehicle's absolute CO2
      value identified on a scale also showing the highest and lowest emitting
      vehicles available.  As with all  other  information, the participants
      indicated that environmental information must be simple in order for
      consumers to pay any attention to  it. An overall environmental rating
      was favorably received because as participants stated- "I don't need to
      know the science behind the rating," and "I trust the EPA to know how
      to come up with these ratings."
Final Report
                                21

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       "/ don't need to know the actual
       grams per mile, I just need to
       know how it compares with
       other cars [i.e. the 1-10 scale]."
       - Houston Male
               Awareness
               One Make/
             Model Intention
                Shopping
The Expert Panel suggested that environmental metrics be included
as part of the overall rating or as a stand-alone rating in a less
prominent position for those consumers interested in more detailed
environmental information. Consequently, the label designs include
CO2 grams (separate from other pollutants), as well as absolute
and relative scales of environmental impact.

Additionally,   such  a  'rating'  could  include  the  use of  an
environmental certification such  as  the  SmartWay™  logo that
appeared on label designs shown to focus groups. Although none
of the participants  recognized and  knew  what the SmartWay™
logo meant, they assumed that it was an EPA designation similar
to the Energy Star™ rating found on electric appliances. However,
while some participants indicated the logo may confer credibility
to an environmentally friendly vehicle, it was obvious that for an
environmental metric to have influence, it would either need to be
incorporated  into an overall rating system, or consumers would
need to be educated as to why environmental ratings should be
more important to them.


Role of the Label in the

Purchase Process Has  Changed
With the rise of internet and social media services, a significant and
growing portion of the buying process is now happening before buyers
even visit a lot.

The Vehicle Buying Cycle
The vehicle buying cycle is that period of time between consumers'
first contemplation of purchasing a new vehicle and when they actually
purchase the vehicle.  The vehicle buying cycle is a seven step process:
awareness, familiarity, opinion/imagery, consideration, one make/model
intention, shopping, and purchase.

Unlike in the past, consumers increasingly seek out fuel economy
information prior to, and beyond, simply viewing the fuel economy
label on vehicles during dealership visits. They are taking advantage
of the many  opportunities available to  become informed about
the benefits they are  seeking, which can include  fuel economy
and environmental  impact. Two-thirds of the respondents to the
pre-focus group online surveys reported  they had researched fuel
economy prior to buying their vehicle. Of these, about half (52%)
22
                                          EPA Fuel Economy Label Redesign

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       reported  that they started researching vehicle information  about
       one to three months prior  to  final purchase.  Consequently, the
       length  of the  vehicle buying cycle  is contracting as consumers
       obtain more information sooner.

       The literature review, as well as the results of the pre-focus  group
       online surveys, demonstrated a significant portion of the buying
       process  takes  place  prior  to  consumers visiting a  dealership.
       What this means  for the fuel economy label  is  that through their
       own information gathering, many consumers  now rely less  on
       the  fuel economy label as  a source of initial fuel economy, fuel
       consumption, fuel cost,  and environmental  impact information.
       Rather, the label is more likely to be used to confirm what they have
       already learned. By the time the consumer enters the dealership to
       test drive a vehicle s/he is closer to a final purchasing decision than
       was true in the past. This might suggest that the label now has less
       influence over purchase decisions.  However,  if properly designed,
       the label has the potential to expand consumers' vehicle options in
       the direction of more fuel efficient vehicles. The label can do this by
       providing useful comparison metrics in a usable format.

       Sources of Information
       For many consumers, purchasing a  big-ticket item like a vehicle
       happens only occasionally and  tends to be related to other  major
       changes in their  lives.  This increases  the anxiety level of the
       consumer  and increases the need for good information to drive the
       decision process.4  Traditionally,  information has come from vehicle
       manufacturers and dealers,  word of mouth,  personal  experience,
       and family and friends, but much has changed with the advent of
       the Internet and the ability of consumers  to search for information
       on specific types  of  vehicles and brands. Pre-focus group  online
       survey  respondents reported gathering fuel economy information
       from manufacturer  websites, Consumer  Reports,  Edmunds, auto
       dealers, vehicle search websites, automobile magazines, others with
       similar vehicles, government websites, television advertisements, and
       the fuel economy label itself. However, for some buyers, viewing the
       label is simply too late in the purchase process to greatly influence
       their decision. Therefore, to be effective it becomes increasingly
       important for EPA to be where the consumer is, with the information
       they are seeking, delivered in a format that is relevant, and using the
       mediums they prefer throughout the buying cycle.

       The Internet has emerged as one of the most  important sources of
"/ used the label more to
confirm, I already had an idea
when shopping for cars."
- Charlotte Female

"I already know  this information
before I go to the dealer."
- Seattle Female
   Center for Advancing Health.
   (2009). Consumer Reports: Car
   Buying Guide. A Case Report for
   Getting Tools Used. Retrieved from
   http://www.cfah.org/activities/
   Getting Tools Used/consumer.pdf
Final Report
                                23

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        "/ would use the label to verify
        what I looked at online."
        - Seattle Male
        5  Greene, D.L., Gibson, R., and
          Hopson, J., "Reducing Oil Use
          and CO2 Emissions by Informing
          Consumers' Fuel Economy
          Decisions: The Role for Clean
          Cities," prepared by Oak Ridge
          National Laboratory, Oak Ridge,
          TN, August 2009, p.l. Available at
          http://wwwl .eere.energy.gov/
          cleancities/pdfs/fuel economy
          strat paper.pdf

        6  Capgemini. (2009a). Cars Online
          09/10: Understanding Consumer
          Buying Behavior in a Volatile
          Market. Retrieved from
          http://www.capgemini.com/
          services-and-solutions/by-
          industrv/automotive/carsonline/
information for consumers interested in purchasing a vehicle. For
example, traffic on the DOE and EPA website www.fueleconomy.gov
increased from 400,000  user sessions  in  1999  to  more than
30  million  in  2008.5 Nearly half of consumers  visit  a vehicle
manufacturer's website6 in search of product and price information.
Consequently, information on the redesigned fuel  economy label
that is intended to inform consumers  about a vehicle's performance
in regard to several metrics (such as fuel economy, consumption,
cost, and environmental impact) should also be available online in
the same format as it appears on the label so that  consumers can
easily recognize it and use it when they visit auto dealerships. The
Internet also provides the opportunity for consumers to purchase
vehicles online (annual growth rate of 14.6%  in the United States
over the  past  five years, although  this  still represents a  small
percentage of total car sales), which is very attractive to consumers
who do not want to negotiate with vehicle dealerships.

Our research also validated the increasing importance third party
reviews of vehicles and social networks play in informing the vehicle
purchase  process. The  Expert Panel strongly recommended that
outreach activities include crowdsourcing, the use of Smart Phone
applications, creation  of tools for car dealers, and collaboration
with other organizations.

Consequently, influencing consumer purchase decisions increasingly
needs to occur prior to consumers visiting dealer showrooms, and
to highlight the value  of educational tools  beyond the label  to
provide consumers with information on  a vehicle's fuel  economy,
fuel consumption, fuel costs, and environmental impact. EPA will
need to be a content provider  and use the fuel economy label, the
web, emerging technologies such as  QR codes and Smart Phones,
and social networks - including third party trusted advocates - to
get information out to the consumers.
24
                                            EPA Fuel Economy Label Redesign

-------
      Label   Designs  for
      Public   Comment
     Label Version 1
      EPA   Fuel Economy and
      DOT   Environmental Comparison
       The above grade reflects fuel


       Grading system ranges from A+to D.
                        Smart phone
                        H^H
       website, here
       Over five years, this vehicle

       saves $1,900
          Gasoline Vehicle
              compared to the
              average vehicle.
      Gallons/   MPG   MPG  C02 g/mile  Annual
      100 Miles   City   Highway (tailpipe only) fuel cost
3.8   22    32   347  $1,617
       Combined MPGe

                      Other Air Pollutants
                                Fuel Economy and
                           DOT  Environmental Comparison
                            The above grade reflects fuel


                            Grading system ranges from A+to D.
                            website, here
Over five years, this vehicle

saves $6,900<
 fuel costs
compared to the
   •ehicle.
                           Range  kW-hrs/  MPGe  MPGe C02g/mile Annual
                           (miles)  100 Miles  City  Highway (tailpipe only) fuel cost
                           99  34  102  94
                                                     $618
                                   Combined MPGe
                  Fuel Economy and
             DOT  Environmental Comparison
             The above grade reflects fuel
             economy and greenhouse gases.
             Grading system ranges from A+ to D.
              website, here
Over five years, this vehicle

saves $5,700
in fuel costs
compared to the
average vehicle.
            Blended Electric+Gas
             (first 50 miles only)
                                                             1.5
                                                                 65
                                                                     2.7
                                                                         38
                                                                             137
                                                                          $855

                                                                       CO, g/mi
                                                                             Other A
                                                              Combined MPGe


                                                             MPGequivaient. MPGequivaient: 33.7 kW-hrs = 1 gallon gasoline energ
                                                             • Annual fuel cost based on 15,000 miles per year at $2.80 per gallon
                                                             and 12 cents per kW-hr.


                                                             personalized for your driving, and to
                                                             download the Fuel Economy Guide (also
                                                             available at dealers).
Final Report
                                                                               25

-------
                 Fuel Economy and
         DOT    Environmental Comparison
         The above grade reflects fuel
         economy and greenhouse gases.
         Grading system ranges from A+to D.
          website, here
          Over five years, you will
          spend$3,100
                      more in fuel costs
                      compared to the
                      average vehicle.
              Gasoline Vehicle
Gallons/
100 Miles
         6.2
MPG
City
                 14
                MPG
               Highway
                              C02 g/mil
                             (tailpipe only)
                         18
                               572
                            $2,625
          Combined MPGe
• Fuel economy for all SUVs ranges from 12 to 32 MPG.
• Annual fuel cost based on 15,000 miles per year at $2.80 per gallon.
                                                  Fuel Economy and
                                          DOT    Environmental Comparison
                                          The above grade reflects fuel
                                          economy and greenhouse gases.
                                          Grading system ranges from A+to D.
                                           website, here
                                                   Over five years, this vehicle
                                  saves $5,700^
                                                               in fuel costs
                                                               compared to the
                                                        Dual Fuel Vehicle: Plug-in Hybrid Electric
                                                          11
                                                               1.5
                                                               2.7
                                                                   66
                                                                   36
                                                                       64
                                                                       40
                                                                            90
                                                                           236
                                                                                $737
                                                                                $1,105
                                                  iti  ffi  lil HP
                                                    Combined MPGe      COsg/mile     Other Air Pollutants
                                                  • Fuel economy for all midsize station wagons ranges from 18 to 75
                                                   MPGequivalent. MPGequivalent: 33.7 kW-hrs = 1 gallon gasoline energy.
                                                  • Annual fuel cost based on 15,000 miles per year at $2 80 per gallon
                                                   and12centsperkW-hr
                                                  Visit wete/te/7ereto calculate estimates
                                                  personalized for your driving, and to    /S*^ jtilfe /'T'N
                                                  download
                                                      aide;
                                                          rs).
                                                                                   Fuel Economy and
                                                                           DOT    Environmental Comparison
                                                                           The above grade reflects fuel
                                                                           economy and greenhouse gases.
                                                                           Grading system ranges from A+ to D
                                                                            website, he
26
                                                                                             EPA Fuel Economy Label  Redesign

-------
                                     Fuel Economy and
                             DOT   Environmental Comparison
                              The above grade reflects fuel
                              economy and greenhouse gases.
                              Grading system ranges from A+ to D.
 website, here
 Over five years, this vehicle
         Cfr^  *t/\/\  in fuel costs
 saves *O,1UU  %ss$x&
                                  <3E» Compressed Natural Gas Vehicle
                             Range  eGallons/  MPGe   MPGe C02 g/mile An
                             (miles)  100 Miles   City   Highway (tailpipeonly) fuel cost
170   3.6   24   36   220  $777
                             ml:
                             • Fuel economy for all midsize cars ranges from 12 to 103 MPGequivaien
                              MPGeqmvaient: 121.5 cubic feet CNG = 1 gallon of gasoline energy.
                             > Annual fuel cost based on 15,000 miles per year at $1.45 per gasoline
                              gallon equivalent.

                                      tocalci
         Fuel Economy and
 DOT    Environmental Comparison
 The above grade reflects fuel
 economy and greenhouse gases.
 Grading system ranges from A+ to D.
                                                                        website, here
                                                                        Over five years, this vehicle
                                                                        saves $1,600
                      n fuel costs
                      ;ompared to the
                      iverage vehicle.
                                                                            Dual Fuel (Gas & ESS) Vehicle
Gallons/  Gasoline  Gasoline MPG C02 g/mi
100 Miles  MPG City  | Highway  [(tailpipeonlyi| fuel cost
                                                                       4.0
                                                                               22
                30     355   $1,680
Final Report
                                                           27

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    Label  Version  2
                                  EPA  Fuel Economy and
                                  DOT  Environmental Comparisons
            • N  Dual FuelVehicle:
              Gasoline-Electricity
                                            Electric + Gas


                                                      MPG«qui.,l«n,
                                              $737
 Gas Only
           MPG
                                    Charge & Range  \ \
                                    .Fu" B3aj| |har9e tlme Blended Electric + Gas Range (battery)
1r
 Extended Range (gas)
28
                             EPA Fuel Economy Label Redesign

-------
                          EPA  Fuel Economy and
                          DOT  Environmental Comparisons
                              •N Dual Fuel Vehicle:
                                Gasoline-Electricity
All Electric

"W
  £~g.
MPG.qui.,l.nt



^4. lW-h,,p,r
W^ 100 miles
                                                      Gas Only
                                                               MPG
                                                        $1,105
                           Charge & Range ] p              ] p
                           FUN Battery charge tme All Electric Range (battery) Extended Range (gas)
Final Report
                                                                       29

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     Label Version 3
      EPA  Fuel Economy and
      DOT  Environmental Comparisons
                                                Gasoline Vehicle
                                                  Environment Rating
                                                  (among all vehicles)
                                                           C02
Fuel Economy           Consumption
  ^%^% MPG

  262232    $1,617        347
  combined  city   highway      annual fuel cost
                           3Q gallons USed         Other Air Pollutants
                           • O every 100 mil
Fuel Economy & Greenhouse Gas Rating
                                                    ***
      Visit www.fueleconomy.gov

       * Download the Fuel Economy Guide
        (also available at dealers)
                                           Smartphone
                                           Interactive
                                           Scan code formore

                                           vehideortocompare'
                                           it with others.     rj]j
      EPA  Fuel Economy and
      DOT  Environmental Comparisons
                                                Dual Fuel Vehicle:
                                                 Plug-in Hybrid Electric
Blended Electric+Ga:

 ^% ^™ MPGequivalent

 D01.5 Ssi,,s
 Chargetakes Range
 r^TIR SO^.esbefore^
Gas Only *-^^^~

          MPG

          O 7 ga
          £../ pe
38
       Annual Fuel Cost
$855
                                Blended and
                                Gas Only combined
       Fuel Economy & Greenhouse Gas Rating
       (among all vehicles)
                                                  Environment Rating
                                                  (among all vehicles)
                                                    ****
                                          Visit www.fueleconomy.gov
                                          * Calculate personalized driving estimat
                                          * Download the Fuel Economy Guide
                                           (also available at dealers)
                                                 Scan code formore

                                                 vehideortocompare
                                                 it with others.
                                                                    EPA  Fuel Economy and
                                                                    DOT  Environmental Comparisons
                                                                                            $618
                                                 Fuel Economy           Consumption
                                                  ^\ ^J MPGequivalent

                                                  iJ O 102  94
                                                  combined    city    highway    annual fuel cost
                                                                          O^ kW-hrs per
                                                                          O** 100 miles
                                                 Fuel Economy & Greenhouse Gas Rating
                                                 (among all vehicles)
                                                                                                  is from 12to103MPGequiv
                                                                                                                Environment Rating
                                                                                                                (among all vehicles)
                                                                                                                         *****
                                                                                                                       Charge & Range
                                                                                                                       'iSra 99""
                                                                                                                       .	ii7 W v mi
                                                                    Visit www.fueleconomy.gov

                                                                     * Download the Fuel Economy Guide
                                                                      (also available at dealers)
                                                                                          I vehicle on
                                                                    EPA  Fuel Economy and
                                                                    DOT  Environmental Comparisons
                                                                                         Gas Only »-^^
                                                                                                  38
                                                                                     MPG


                                                                                     2.7 peMOO n
                                                                            Annual Fuel Cost
                                                                                   $847
                                                                          All Electric and
                                                                          Gas Only combined
                                                                     Fuel Economy & Greenhouse Gas Rating
                                                                     (among all vehicles)
                                                                                                                Environment Rating
                                                                                                                (among all vehicles)

                                                                                                                   111 ^3.


                                                                                                                   ****
                                                                                         Visit www.fueleconomy.gov
                                                                                         * Calculate personalized driving estimat
                                                                                         * Download the Fuel Economy Guide
                                                                                              :'1   ealers)
                                                                                                                Scan code for more


                                                                                                                itwithothers.
30
                                                                                                         EPA Fuel  Economy Label Redesign

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     Appendix  A-   Detailed
      Research   Methodology
     The Environmental Protection Agency (EPA) and the National
     Highway Traffic  Safety Administration (NHTSA) embarked on a
     comprehensive and innovative research program beginning in the fall
     of 2009. The research helped inform the development of the new labels
     being proposed and included a review of available  literature, three
     phases of consumer focus groups (including pre-group online surveys),
     and a day-long consultation with an expert panel of individuals
     who have introduced new products or have spearheaded national
     educational campaigns. In addition, an online survey of vehicle buyers
     and intenders is planned to take place in September of 2010.

     Such  a  multi-method approach has many benefits, perhaps  the
     most  important of which is that the limitations of one method  can
     be potentially compensated for by the methodological strengths of
     another. For example, while focus groups are the preferred method
     to obtain in-depth reactions to potential label metrics and designs
     and to generate new ideas, they are not meant to be representative
     of new vehicle buyers nationwide in general. The focus groups for
     this research were held in four specific  locations and the type of
     individuals who agree to participate in a focus group may be unique
     in some ways. In addition, group dynamics can influence the resulting
     discussion in ways that are not present during individual interviews.

     Pre-group online surveys compensated for some of these limitations by
     gathering information from participants before they  were influenced
     by the group discussion. Another technique we used during the groups
     themselves was to have participants record on paper their individual
     answers to discussion topics before opening the  issue up to group
     discussion. Having conducted  thirty-two  focus groups, it was also
     beneficial to have another group, the Expert Panel, not involved with the
     project come in with a fresh set of eyes to provide another perspective.
Final Report                                                                                 31

-------
                                         To address the issue of the lack of representativeness of focus
                                         group participants, we plan to supplement the research  process
                                         with a much broader sample of new vehicle buyers and prospective
                                         new vehicle buyers ("intenders") through a large sample online
                                         survey. This approach also has its limitations since  such  surveys
                                         do not allow for in-depth  probing. Furthermore, the samples are
                                         self-selected to be contacted by email and there is no guarantee that
                                         those who choose to complete the survey are representative even of
                                         this self-selected group.


                                         Literature Review

                                         We began the research process with a review of existing literature on
                                         the vehicle buying process, information sources used by consumers
                                         as  they shop for vehicles, the factors (such as price, fuel economy,
                                         and safety, as well as demographics and  psychographics) that
                                         influence consumer vehicle purchasing decisions, and the impact of
                                         the increasing availability of "greener" vehicles. This allowed us to
                                         establish a foundation upon which subsequent research tasks were
                                         based and supplement (instead  of repeat) existing research. A total
                                         of  eighty studies/articles were  reviewed and the sources spanned
                                         a broad range of books, articles, papers, and secondary research
                                         reports. Data presented were primarily taken  from business,
                                         marketing, and  academic journals and  magazines;  websites;
                                         newspapers; conference  proceedings; and published government
                                         guidelines, standards, and documents. The literature review report
                                         provides a summary of the reviewed information.


                                         Pre-Focus Group Online Surveys

                                         The  next  research  step  involved  gaining  initial insights  from
                                         individuals who would be participating in the  focus groups. The
                                         online surveys had several  objectives including validation of  some
                                         key findings from the literature review (especially  in regard to the
                                         vehicle purchase process and factors that influence the vehicle buying
                                         process). Using an online survey tool provided the opportunity to also
                                         acquire some information without the impact  of peer influence in the
                                         focus groups. It also exposed participants to discussion topics raised
                                         later in the focus groups (such as the MPG Illusion  and descriptions
                                         of  advanced technology vehicles) to allow more time for discussion
                                         of  priority topics when the focus groups met face-to-face.
32                                                                                 EPA Fuel Economy Label Redesign

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      A main purpose of the survey was to obtain additional information
      regarding participants'  vehicle purchase process, the role of fuel
      economy in their purchase decision, how they used the current
      fuel economy label,  and motivators  and barriers to purchasing
      advanced technology vehicles. The survey questions were developed
      by PRR, with input from the EPA, NHTSA and OMB (Office of
      Management and Budget).

      Those recruited were sent a link to the pre-group online survey
      approximately one week in advance of the scheduled focus groups.
      They were instructed to complete the online survey at least two
      days prior to their group. Follow-up reminder calls were made to
      those who had not completed the survey in the specified timeframe.
      A total of 404 of those recruited completed the online survey. It
      should be noted that  the results of these surveys are not  intended
      to  be  representative  of any larger  group of new vehicle buyers
      and reflect only  the  experience  of the focus  group participants
      themselves. Nonetheless, these results provided important insights
      when used in conjunction with the other research tasks connected
      with this overall project.

       Focus  Groups

      When our research process was at the point of requiring in-depth
      consumer feedback on design possibilities the agencies determined that
      focus groups would be ideal to gather in-depth,  qualitative feedback
      about fuel economy labeling, potential new label information, and
      ways of displaying the information. Focus groups are the  optimum
      approach to use when the task calls for qualitative, in-depth insight
      into a consumer's understanding of fuel economy labels. Focus groups
      allowed us to probe  around why some label  designs were  more
      understandable, how  different label  designs would be used in  the
      vehicle purchase process, and which label metrics were most important
      to consumers. The focus group discussions also provided insights into
      how a label design may help consumers choose more fuel efficient
      vehicles. The focus groups were  not intended to provide quantitative
      results, but were instead designed to help EPA and NHTSA discern
      the subtleties of consumer understanding and preference as it relates
      to the label and the best way to provide numerous and sometimes
      complicated pieces of information.
Final Report                                                                                                 33

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        7  There were as many as fifteen
          approaches presented to the
          agencies and they selected
          three to present to focus
          groups. Developing the labels
          was iterative and PRR strived
          to incorporate all statutory
          requirements, findings from
          Phase 1 and Phase 2 focus
          groups, and agency perspectives
          and overarching guidelines.
A total of thirty-two focus groups (256 participants) were conducted
in  three phases between February 25th and May 27th, 2010 in the
cities of Seattle, Chicago, Houston and Charlotte. The three phases
were designed to  address the following issues:

        Phase I (8 focus groups) -Use of the current fuel economy
        label, as  well  as  metrics and design of  the label for
        conventional internal combustion engine vehicles.

        Phase II (8 focus groups) -Understandability of and preference
        for metrics for advanced technology vehicle labels.

        Phase III (16 focus groups) - Assessment  of full  label
        designs for conventional and advanced technology vehicles
        in regard to content and look.7

Thus,  overall,  focus  groups  were used to obtain  a  qualitative
understanding of consumers' comprehension and  reactions to fuel
economy label information.

Participants were recruited from panels developed and maintained
by the focus group facility used in each city. All the  groups consisted
of eight  participants  (with  the  exception of one group that had
7 participants, two that had 6  participants, and one that had 5
participants). Participants were screened for having purchased a
new vehicle (not a used or pre-owned  vehicle; not a motorcycle;
and not a 'Cash for Clunkers' purchase) in the last 12 months and
being the sole or primary decision maker with regard to this new
vehicle purchase. To  ensure  a good cross-section of participants,
each focus  group included  a mix of participants  based on the
following variables: type of new vehicle, price range of new vehicle,
distance  they typically travelled daily in this new vehicle, if they
had  seriously considered an advanced technology vehicle before
purchasing their  vehicle, and a  variety of demographic variables.
In  each city, separate male and  female  groups were  conducted in
English and each group lasted two hours. A moderator guide was
used to structure  the focus group discussions.
34
                                            EPA Fuel Economy Label Redesign

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       Expert  Panel
      Following the focus group research, we assembled an expert panel
      for a one day consultation and asked them to give us feedback
      on the draft label designs the focus groups had helped create and
      to assist us in identifying opportunities and strategies to increase
      consumer preference for  energy  efficient  and environmentally
      friendly  vehicles. The experts  came from a variety  of  fields in
      advertising and product development  and  were  chosen because
      they have led successful national efforts to introduce new products
      or had spearheaded  national  educational campaigns. Feedback
      received from this elite group was desirable because of their unique
      history and experience of creating  dramatic social change  and
      influencing product preference over short periods of time.

      An initial list of products and social changes that met the criteria of
      being dramatic, impacting a significant percentage of the population,
      having demonstrated  staying power and having happened quickly
      was generated and prioritized. Individuals who were in roles critical
      to the success of these efforts were then identified and invited to
      participate in  the Expert Panel. The panel was limited to  no more
      than 10 participants in order to ensure full participation.

      Nine expert  panelists eventually participated in  the  six  hour
      discussion. The group was  convened on Wednesday, June 9, 2010
      at EPA headquarters located  in Washington DC. In advance of
      the discussion, participants were provided a draft agenda, a brief
      overview of the project, and initial research and focus group findings.
      Panelists were asked to come prepared to discuss how they would
      recommend that the EPA increase the value of, and preference for
      more efficient vehicles, as well as identify opportunities to increase
      the priority of energy efficiency in the vehicle purchase process, and
      finally to provide feedback  on fuel economy label design drafts.
Final Report                                                                                                  35

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           Sources of respondents were
           databases owned by Autobytel,
           http://www.autobytel.com
           (for those intending to buy
           new vehicles), and Focus USA
           (for those who purchased
           a vehicle in the last year),
           http://www.focus-usa-l.com.

           Respondents are asked which
           was better, rather than which
           was more fuel-efficient or
           less costly, so as to leave the
           respondents with the choice
           of what information on the
           label to use for the comparison.
           A later question asks which
           information they used in their
           response. While this somewhat
           ambiguous approach may reduce
           the absolute number of correct
           answers to the questions, the goal
           is to test the relative effects of the
           labels, not the absolute effects.
Online  Survey of New Vehicle  Buyers

and  Intenders

The online survey of vehicle buyers and intenders is meant to
examine how  understandable  the new  label  designs  are,  and
whether the  proposed  new  labels  will  improve  consumers'
knowledge about more efficient vehicles. This survey will use two
samples: self-selected  new vehicle purchasers, and people who
expressed an intention to purchase a  new vehicle by requesting a
price quote from a dealer8  within the past 12 months (excluding
the 'Cash for Clunkers' 2009 period). Each sample will be divided
into three separate groups  and  see surveys identical in every way
except for the label design, each of the groups will see only one of
the label designs.

The survey tests  respondents'  understanding  of the labels  by
showing each respondent a series of  label pairs. In each pair, all
vehicle characteristics are held constant except the information on
the vehicle label. For instance, the fuel economy of the vehicles may
differ, or one may be for a conventional vehicle and one an electric
vehicle. Respondents are then  asked  to identify which vehicle is
better to use for trips of specified distances.9  The key question is
whether the different label  designs produce statistically significant
different results. If one label produces more correct responses than
other labels, then it can be considered more understandable. If the
labels do not produce statistically different results, then the labels
can be considered equivalently understandable.

To test  the potential influence of the  labels on vehicle purchases,
respondents will see  pairs  of labels for vehicles with all vehicle
attributes constant except  those  varied on the label, such as  the
technologies of the vehicles, their efficiencies, and their energy
costs. Instead of using the  label to identify the better vehicle  for
a trip distance scenario, the respondents are asked which of these
vehicles they would prefer to buy, based on their individual driving
patterns. Because the survey asks respondents about their typical
daily driving distances, it  is possible  to see whether respondents
chose the vehicle better suited for their  habits. The key variable is
whether the responses differ for different label designs.
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                                             EPA Fuel Economy Label Redesign

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