Last week the Environmental Protection Agency (EPA) published its proposals for new fuel economy labels and the National Automobile Dealers Association (NADA) has responded with a thumbs down. Specifically, NADA is unhappy with the proposed letter grades that would indicate where the labeled vehicle stands relative to its direct competitors. NADA is concerned that the new grades would confuse consumers, especially when comparing different fuel types. This is a dubious argument.

Since the proposed grades would give a rating that is relative to similar vehicles, it shouldn't really matter what the fuel type is. If a compact sedan with a gasoline engine gets a C compared to a similar vehicle with electric drive that gets an A, that seems perfectly reasonable.

NADA does stand on more solid ground when it complains about comparisons between new cars with grades and used cars without them. However, that argument is limited as well, since the 2007 Energy Independence and Security Act that mandated higher CAFE standards also requires new labels to retain MPG ratings. The comparable MPG ratings exist on the new labels but are now de-emphasized. There also doesn't seem to be any mention of the QR codes on the labels that allow consumers to scan the data with a smart-phone and do instant comparisons.

[Source: Detroit News]

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