California Dreaming or New Reality? Fuel Efficiency Rule Could Have Big Impact
While it’s sometimes true that “What happens in Vegas, stays in Vegas,” what happens in California doesn’t always stay in California - especially when it comes to fuel efficiency requirements for tires.
In 2004, hardly anybody outside of “The Golden State” knew about the California Environmental Protection Agency’s newly minted SmartWay program.
As everyone soon learned, the initiative set fuel efficiency standards for commercial truck tires operating within California’s borders.
Despite being voluntary - and it’s still voluntary - SmartWay had far-reaching impact. Tire manufacturers reconfigured tread designs and reformulated compounds to meet rolling resistance targets established by the program.
At first, only a handful of tiremakers had the wherewithal to do this. Today, more than 2,000 truck tires have received SmartWay certification. (You can view the whole list at www.epa.gov.)
Now imagine the creation of a similar program for passenger and light truck tires.
Efforts are already underway as legislators have directed the California Energy Commission (CEC) to establish a fuel efficiency standard and rating system for passenger and light truck tires sold at the replacement level.
Under potential rulemaking, replacement tires sold in California would be required to at least match the rolling resistance of OE consumer tires.
Before this issue of MTD went to press, I caught up with Tim Olson, senior policy advisor for the commission, to learn more.
First, Olson indicated that rulemaking is not imminent. The process in California “can typically take one year to complete from the informal start date,” he said.
On top of that, regulations are required to show “that actions are cost-effective and reflect beneficial impacts and cost impacts.”
The CEC is now in “the information gathering stage,” which could take several more months to complete.
“We are currently gathering data on all passenger vehicles and light trucks operating in California, including their tire make, model, size and trim; examining tire efficiency test data conducted over time; collecting data on OE tires for new passenger vehicles and light trucks; and exploring methods to present and display tire data to consumers to enhance purchase decisions.”
Fortunately, the Tire Industry Association (TIA) and the California Tire Dealers Association (CTDA) have been part of the process and are providing valuable input.
Olson says talks have been “very beneficial and productive.”
Representatives from TIA agree.
“The people from the CEC have been very good to work with,” says TIA President Dan Nothdurft. “They want knowledge, so we’re trying to help them with the information they need.”
That’s where things stand right now. But let’s speculate for a moment.
What if the CEC does establish a rule? What if other states are inspired to create their own standards? And what if there’s a federal mandate at some point? Things could get very complicated, very quickly. (And this is just me talking - not TIA or the CTDA.)
First of all, a mandate - at either the state or national level - would limit consumer choice. Not all people can afford higher-priced tires made by companies that have the ability to meet whatever rolling resistance goal that could be required.
Where would that leave consumers who can only afford products that don’t have all the “bells and whistles?”
Theoretically, a label on a tire would let buyers know if the product meets minimum rolling resistance requirements. But will buyers take the time to read those labels? Will the information matter to them?
What if low rolling resistance happens to be a low priority for the customer? What if a customer is more interested in another attribute, like traction? Is saving a few bucks at the gas pump worth potentially losing some grip?
There are customers who are much more interested in tire and wheel aesthetics than tire performance. Let’s say a loyal customer of yours wants to buy a big-diameter tire for his lifted pickup truck. Fuel economy is probably the last thing on his mind. He just wants something that looks cool. How will you handle that?
This leads to another problem that I foresee. A fuel efficiency mandate could limit your ability to sell what you want.
Not all customers have the same tire needs. Will a ruling paint all tire buyers into a one-size-fits-all corner? Will it force some people to run tires that exist outside of an “approved” list? Will a class of “outlaw” tires emerge? Who will police this?
Furthermore, there’s no guarantee that all tire manufacturers will be able to build products that meet a certain rolling resistance target. (Think back to the early days of SmartWay.)
And what about the potential impact on your inventory?
Now, some of the scenarios discussed above may never occur. But they’re worth thinking about. I have no doubt that the intentions of the CEC are sincere. And I’m glad the commission is working closely with TIA and the CTDA to come up with a workable solution. That’s good for all of us.
I just want to make sure you’re aware of what’s happening. And I encourage you to follow the situation as it develops by checking back with MTD.