49 U.S.C. § 32904 — Calculation of average fuel economy

(a) Method of Calculation — (1) The EPA Administrator calculates a manufacturer's average fuel economy. (A) For automobiles covered by section 32902(a), the Administrator uses whatever method it prescribes. (B) For automobiles covered by section 32902(b)-(d), the Administrator divides the number of passenger automobiles the manufacturer made that year by the sum of, for each model, the number of that model made divided by that model's fuel economy. (2)(A) "Electric vehicle" means a vehicle powered mainly by an electric motor drawing power from a portable source. (B) If a manufacturer makes electric vehicles, the Administrator includes equivalent petroleum-based fuel economy values (set by the Secretary of Energy) in the average fuel economy calculation. The Secretary of Energy must review these values yearly and propose needed changes, based on: (i) how electrically efficient the vehicle is, given its type, mission, and weight; (ii) the national average efficiency of generating and transmitting electricity; (iii) the nation's need to conserve energy and the scarcity and value of fuel used to generate electricity; and (iv) how electric vehicles are actually used compared with gas vehicles. (b) Separate Calculations for Passenger Automobiles Manufactured Domestically and Not Domestically — (1)(A) Except as provided in paragraphs (6) and (7), the Administrator calculates fuel economy separately for (i) a manufacturer's domestically-made passenger automobiles and (ii) its non-domestically-made ones. (B) These two groups count as if they came from separate manufacturers, except for purposes of the credits in section 32903. (2) Generally, a passenger automobile counts as domestically made in a model year if at least 75% of its cost to the manufacturer comes from value added in the United States or Canada — unless it was finished in Canada and imported into the U.S. more than 30 days after the model year ends. (3)(A) Alternatively, an automobile counts as domestic if at least 75% of its cost comes from value added in the U.S., Canada, or Mexico — again unless it was finished in Canada or Mexico and imported more than 30 days late. (B) This Mexico-inclusive rule applies to a manufacturer's automobiles as follows: (i) a manufacturer that started assembling in Mexico before model year 1992 could elect, between January 1, 1997 and January 1, 2004, to use this rule starting the model year after its election; (ii) a manufacturer that started assembling in Mexico after model year 1991 must use this rule starting the model year after January 1, 1994, or after it began assembling in Mexico, whichever is later; (iii) a manufacturer that assembles in the U.S. or Canada but not Mexico, and isn't described in (i) or (ii), could elect between January 1, 1997 and January 1, 2004 to use this rule — but if it starts assembling in Mexico before electing, it instead falls under rule (ii); (iv) a manufacturer that doesn't assemble in the U.S., Canada, or Mexico at all must use this rule starting the model year after January 1, 1994; (v) a manufacturer described in (i) or (iii) that never makes an election must use this rule starting the model year after January 1, 2004. (C) The Secretary of Transportation sets reasonable procedures for these elections. (4) A non-domestic passenger automobile's fuel economy is treated as equal to the average fuel economy of all of that manufacturer's non-domestic passenger automobiles. (5)(A) A manufacturer may submit a plan to the Secretary of Transportation showing it will make a model domestically within 4 model years. The Secretary must promptly review it and must approve it unless the plan is inadequate or the manufacturer already got an earlier plan approved under this rule. (B) If approved, for each of the 4 plan years, the Administrator will count up to 150,000 of that manufacturer's not-yet-domestic automobiles as if they were domestic, if: (i) the model hasn't previously been made domestically; (ii) at least 50% of each automobile's cost is value added in the U.S. or Canada; (iii) any automobiles finished in Canada are imported within 30 days after the model year ends; and (iv) the model actually becomes domestic by the end of the 4th plan year. (c) Testing and Calculation Procedures — The Administrator measures each model's fuel economy and calculates each manufacturer's average under testing procedures it sets. Except for the alternative-fuel calculations in section 32908, the Administrator must use the same method used for model year 1975 (55% weighted on city driving, 45% on highway driving), or a method giving comparable results. Fuel economy numbers must be rounded to the nearest tenth of a mile per gallon. The Administrator decides how much of another fuel counts as equal to one gallon of gasoline. Fuel economy tests should be combined with emissions tests under the Clean Air Act where practical. (d) Effective Date of Procedure or Amendment — The Administrator must set a new testing procedure, or any non-technical change to one, at least 12 months before the model year it will apply to. (e) Reports and Consultation — The Administrator must report its measurements and calculations to the Secretary of Transportation, and must consult and coordinate with the Secretary in carrying out this section.