VI.  COSTS and LEAD TIMES

    Table of Contents

    Systems Costs

    These cost estimates are NHTSA-derived estimates based on a tear-down study of costs by a contractor of three direct measurement systems and one indirect measurement system and confidential discussions with a variety of suppliers and manufacturers about how their systems work and the various components in their systems. All costs provided here are consumer costs. Variable cost estimates received from suppliers were multiplied times 1.51 to mark them up to consumer cost levels. These cost estimates assume high production volumes, U.S. raw material prices, Detroit area labor rates (union shop), U.S. manufacturing processes, methods, and overhead application rates. For this analysis, we estimate there will be sales volumes of 17 million light vehicles per year, 8 million passenger cars and 9 million light trucks.


    Indirect measurement systems:

    There are different ways of using indirect measurement systems for a Tire Pressure Monitoring Systems (TPMS). The first assumes that the vehicle has an existing ABS system and that manufacturers will add the capability to monitor the wheel speed sensors, make changes to the algorithms, add the ability to display the information and a reset button. The incremental cost of adding these features to an existing ABS vehicle was estimated to be $13.29 per vehicle. In model year 2000, about 76 percent of all passenger cars and light trucks had an ABS system. However, you need a 4 wheel ABS system and you need a 4-channel ABS for the TPMS system to work. In model year 2000, 74 percent of all new light trucks and 63 percent of all new passenger cars had a 4 wheel ABS systems. However, a large percentage of these trucks (about 60 percent) [29] have a 3-channel ABS system (defined as a 3 channel system because the rear axle has one wheel speed sensor rather than a separate wheel speed sensor on each wheel, which would be required for a TPMS system). In the FEA, the agency discussed the costs for adding an indirect system to some pickup trucks. In order to pass the proposal that the system be able to detect when any one of the tires are low, the agency believed these trucks would have their wheel speed detection system redesigned to include individual sensors on both rear wheels at an estimated cost of $25 per vehicle. About 52 percent of the 4-wheel ABS systems are light trucks; if 60 percent of these need a fourth wheel speed detector, then 31.35 percent of all passenger cars and light trucks with 4-wheel ABS will need a fourth wheel detector. Thus, the average cost of providing an indirect system for ABS vehicles is estimated to be $21.13 ($13.29 + $25*.3135).

    NHTSA tested four ABS-indirect measurement systems and none of the four met the proposed requirements to provide a driver warning at 25 percent below placard and to detect "one, two, or three, or four tires" being low. They could not detect when four tires were low and had problems detecting two tires low on the same axle or when two tires on the same side of the vehicle were low. Indirect system costs are included as a partial basis for the hybrid system costs.

    In the FEA, the agency also discussed the possibility of manufacturers adding wheel sensors at a cost of $130 per vehicle or full ABS at a cost of $240 per vehicle to provide an indirect system. Some manufacturers may decide to add a full ABS and a hybrid system as a countermeasure to this proposed rule. However, this is a marketing decision and the additional costs of adding an ABS system are not the result of this proposal.


    Direct measurement systems:

    A direct measurement system has a pressure sensor inside each tire that broadcasts tire pressure, and in some systems internal air temperature, to a central receiver on the vehicle (or in most cases to four separate antennae on the vehicle which relay the data to a central processor). It sends the information to a central processor that in turn displays a low-pressure warning when appropriate. Thus, there are two main costs of these systems (sensors and a receiver/central processor).

    The agency has a teardown study performed by its contractor Ludtke & Associates. [30] Three direct measurement systems, the Beru tire pressure warning system, the SmarTire system, and the Johnson Controls system, have been torn down and their costs estimated.

    The Beru system goes beyond the bare minimum needed to pass the proposal. The Beru system is capable of providing a "soft warning" with an amber telltale lamp when the inflation pressure drops 2.8 or more psi below the recommended pressure, and a "hard warning" with a red telltale lamp when the under-inflation is 5.7 psi or greater below the recommended inflation pressure.

    The costs of the Beru direct measurement system are broken into the following categories (1 control unit at $44, 4 wheels electronic modules to measure tire pressure and transmit the data at $32, 4 reception antenna at $11, 4 valves at $7, the instrument panel display at $2, assembly and miscellaneous costs at $10) for a total of $106.

    The costs of the SmarTire direct measurement system are broken into the following categories (1 control unit which includes one antenna at $30, 4 wheels electronic modules to measure tire pressure and transmit the data at $30, 4 valves at $5, the instrument panel display at $4, assembly and miscellaneous costs at $11) for a total of $80.

    The costs of the Johnson Controls direct measurement system are broken into the following categories (1 control unit which includes one antenna at $19, electronic sensor modules in the 4 wheels to measure tire pressure and transmit the data at $30, 4 valves at $7, the instrument panel display at $4, assembly and miscellaneous costs at $9) for a total of $69.

    Thus, one can see that the direct measurement system component cost estimates are very consistent between systems with the exception being the control module. As with most electronic systems, the agency believes that the costs of the control module will decrease in the future as engineers learn how to design the systems more efficiently. Thus, we will use the least expensive control module cost in our calculations. However, it is possible that this cost could be reduced even further over time.

    Based on the three direct measurement systems costed out in the teardown studies, the average price for the tire pressure sensors is about $7.50 per wheel or $30 per vehicle.

    For the direct measurement system, in Compliance Option 1 the agency assumes that manufacturers will provide a display system ("selectable display") that will allow the driver to check and see the tire pressure for all four tires individually. This system is not required by the proposal, however, we believe that consumers will value this information and that the manufacturers will provide it in some cases. Two systems with a selectable display feature were costed out. The selectable display feature in the design of the Johnson Controls system costs $4.28 and the design in the SmarTire system cost $3.73. Thus, the average cost is $4 per vehicle. These designs were individual displays. If the design of the system is set up in an existing display that the driver can access, the costs would be much less, probably on the order of $1 per vehicle. A selectable display is currently available in high-end vehicles as an option and is purchased by a small percent of those purchasers. The agency estimates that about 5 percent of total sales have a selectable display currently. Thus, the average cost is estimated to be $3.85 ($4*.95 + $1*.05). This cost is in addition to the cost of the telltale lamp that would typically be provided on the instrument panel to provide a warning when the system detects that tires are low. The cost of the telltale lamp was estimated in the Beru system to be $1.58.

    To summarize, a direct measurement system with a selectable display (Compliance Option 1) is estimated to cost $70.35 ($7.50 per wheel or $30 per vehicle for the tire pressure sensors, $19 per vehicle for the control module, $3.85 for a selectable display, 4 valves at $6, and $11.50 for the

    combination of an instrument panel telltale, assembly, and miscellaneous wiring, etc.). A direct measurement system with only a telltale lamp  (Compliance Option 2) is estimated to cost $66.50 ($70.35 - $3.85).

    A direct measurement system with a pump:

    Cycloid Company makes a pump based system that uses 4 wheel electronic modules, like a direct measurement system, as well as a pump to inflate the tires to proper pressure while the vehicle is being driven. Each tire has a sensor and a pump. The pump is attached under the hubcap. The display is designed to give a warning to the driver when a particular tire has a problem and needs servicing. For slow leaks, the pump can keep inflating the tire enough to get the vehicle to its destination. However, once the vehicle stops, the pump stops, and the tire will deflate. The cost of this system is estimated to be the same as a sensor-based system, except that there is the addition of a pump at an estimated cost of $10 per wheel, or $40 per vehicle. The benefit of this system is that it eliminates the need for the driver to stop for air for normal tire pressure loss conditions. 


    Hybrid systems

    A hybrid system is an indirect system for ABS-equipped vehicles with 2 direct wheel sensors. The agency believes such a system could detect when one to four wheels are 25 percent or more below placard. TRW estimated that adding two direct tire measurement systems to a vehicle that had ABS would cost about 60 percent of the cost of a direct measurement system. The hybrid system would not be able to tell drivers the inflation pressure in all four tires, so we do not believe that a selectable display would be provided. Thus, the estimated cost for a hybrid system is $39.90 ($70.35 - $3.85)*.60).


    Malfunction/Warning Lamp

    We anticipate the cost of adding a separate malfunction/warning lamp to the system to be close to the costs of adding a telltale lamp to the system ($1.58). In addition, the cost of adding circuitry for the malfunction capability would add an estimated $0.25 to the system. Thus, the cost of a separate malfunction/warning lamp with the added circuitry for the malfunction capability is estimated to be $1.83. This would be added to each Compliance Option analyzed above if a separate malfunction/warning lamp were required. The agency proposes that both functions be performed, but is not proposing to require a separate malfunction warning lamp. We anticipate the cost of having two functions performed by the same lamp to be negligible. Thus, we assume only the $0.25 costs for the malfunction capability for performing two functions using one telltale lamp.

    Table VI-1 shows the estimated incremental costs for the different types of systems


Table VI-1
Cost Summary of TPMS Costs
(With Malfunction Capability)
(2001 Dollars)
nowrap>Direct Measurement System with Selectable Display $70.60
Direct Measurement System with Only a Telltale Display $66.75
Hybrid Measurement System $40.15


    TPMS Systems in New Vehicles

    Voluntary use of TPMS in new vehicles was determined by using the calendar year 2000 sales, a model year 2001 list of the make/models with each type of system, and an estimate that 2 percent of sales were purchased as an option for those optional systems, to estimate the percent of the year 2000 sales that had each type of system. The resulting estimates are that 4 percent of the model year 2001 light vehicle fleet has an ABS-type indirect measurement TPMS, and 1 percent of the fleet has a direct measurement system.


    System Cost Summary by> Compliance Option

    Compliance Option 1: Assuming a direct measurement system with a selectable display, the incremental cost would be an estimated $69.89 per vehicle ($70.60 per vehicle * 99 percent to account for the 1 percent of sales in the current fleet).

    Compliance Option 2: Assuming a direct measurement system with only a telltale lamp, the incremental cost would be an estimated $66.08 per vehicle ($66.75 per vehicle * 99 percent to account for the 1 percent of sales in the current fleet).

    Compliance Option 3:  In the near term it is assumed that for Compliance Option 3 that a hybrid system would be provided for the 67 percent of the fleet that is already equipped with ABS, and that a direct measurement system with a telltale display will be installed in the remaining 33 percent of the fleet. The average overall cost for this Compliance Option is estimated to be $48.44[40.15*.67 + $66.75*.33]*.99 to account for one percent current compliance.


    Maintenance Costs

    The current direct measurement systems have a battery to transmit data, which has a finite life of 7 to 10 years, which will have to be eventually replaced to keep the system functioning. At this time, the tire pressure sensor has a battery in an enclosed package, which does not open to replace the battery. Thus, the entire sensor must be replaced to replace the battery. This may be necessary to ensure the lifetime use of the sensor given its location in the wheel considering vibrations. To estimate the present discounted value of this maintenance cost the following assumptions were made. The agency assumes that the second time the tires are changed, in the 90,000 to 100,000 mile range, that the sensor and battery will be replaced. This occurs in year 9 for all Compliance Options for passenger cars and light trucks. Survival probability and discount factors from year 9 are used (see Chapter V). The cost of the sensor ($7.50 each for 4 tires) is multiplied by 3 to account for typical aftermarket markups.

    At the 3 percent discount rate, the estimated maintenance costs are $54.25 for passenger cars ($7.50 * 4 * .775 * .7778 * 3) and $59.99 for light trucks ($7.50 * 4 * .857 * .7778 * 3), making the average maintenance costs for a direct measurement system for all four wheels of  $56.55 (57.12*.99 to account for current compliance). When a hybrid system is used with a direct measurement system in two wheels, the average maintenance costs would be $28.28 ($56.55*0.5).

    At the 7 percent discount rate, the estimated maintenance costs are $39.24 for passenger cars ($7.50 * 4 * .775 * .5626 * 3) and $43.39 for light trucks ($7.50 * 4 * .857 * .5626 * 3), making the average maintenance costs for a direct measurement system for all four wheels of  $40.91 (41.32*.99 to account for current compliance). When a hybrid system is used with a direct measurement system in two wheels, the average maintenance costs would be $20.45 ($40.91*0.5).

    If the agency requires a malfunction/warning system, then consumers who have replacement tires that are incompatible with the TPMS put on their vehicle and get the malfunction warning, could go back to the tire dealer and purchase a different set of tires. If the warning lamp stays lit until the system is fixed, the agency believes that most consumers will want to have their tires changed to extinguish the lamp, until they find out what it might cost them. The question is "Who pays the bill for the second mounting, and balancing, and in some cases, the additional cost of more expensive tires than were originally purchased?" This could cost $50 or more. We assume this cost would fall upon the consumer, and not the tire dealer. If it is to be the consumer, many will ignore the lamp or have it turned off before they will pay another $50. We expect very few consumers would go to the trouble and expense of changing tires, just to have their malfunction lamp go off.

    For this analysis, we assume that the malfunction lamp will stay on and it lets consumers know that they have to check their tires themselves and can’t rely on the TPMS working. The big question then is "What percent of consumers will remember to check their tire pressure, given that they have a malfunction yellow lamp continuously lit on their instrument panel?"  These are people that currently don’t check their tire pressure, or they wouldn’t be part of the benefits of the rule. The agency has no way of knowing this answer.

    The malfunction/warning lamp would provide information on more than just the tires not being compatible with the TPMS. There are a variety of reasons why the system might not be working. These include: a battery in an individual wheel sensor went dead after its 7 to 10-year life or stopped working earlier, a wheel sensor was broken while mounting a tire on a rim, there was an electronic failure of any type, or there was a failure in the system for some other reason. The agency has not estimated the potential occurrence of any of these failure modes, with the exception of the battery.

    It should be noted that all suppliers of direct measurement systems are working on systems that do not use batteries. At least two designs are being worked on. IQ-mobil Electronics GmbH stated in its docket comment (Docket No. 2000-8572, No. 174) that it has designed a battery-less transponder chip at the valve that is 1" by 1" in size. They have further developed this system and claim it will be ready for production by the proposed effective date. A second system could use kinetic energy in the rotating wheel to provide power for the system. The Cycloid Company already uses a similar technology to power its pump. For this analysis, we present a range in maintenance costs; however, there is a very good chance that the maintenance costs discussed above may only last for a few model years as technology to reduce maintenance costs becomes more widespread.

    Since a battery-less TPMS system will soon be on the market, which will eliminate the need for maintenance when the battery dies, this system will result in no maintenance costs to replace batteries. For this analysis, the agency is providing a range from no maintenance costs for a battery-less direct TPMS system, to the estimates for maintenance costs for a TPMS with a battery.

    Maintenance costs can also be affected by compatibility between replacement tires and TPMS designs. If the TPMS won’t work because of a compatibility problem with replacement tires, then there is no reason to do maintenance on the TPMS. Thus, for this analysis the maintenance costs, which were assumed to occur in year 9 or 10 of the vehicle to replace batteries in the direct system TPMS, are reduced by 1 percent to represent the 1 percent of the systems that are assumed to be incompatible.

    At the 3 percent discount rate, the average maintenance costs for a direct measurement system for all four wheels would be $55.98 (56.55*.99). When a hybrid system is used with a direct measurement system in two wheels, the average maintenance costs would be $28.00 ($28.28*0.99).

    At the 7 percent discount rate, the average maintenance costs for a direct measurement system for all four wheels would be $40.50 (40.91*.99). When a hybrid system is used with a direct measurement system in two wheels, the average maintenance costs would be $20.25 ($20.45*0.99).

    At the 3 percent discount rate, for Compliance Options 1 and 2, the present discounted value of the quantified maintenance costs is $0 to $55.98. For Compliance Option 3, the present discounted value of the quantified maintenance costs is $0 to $37.23 ($28.00*.67 + $55.98*.33).

    At the 7 percent discount rate, for Compliance Options 1 and 2, the present discounted value of the quantified maintenance costs is $0 to $40.50. For Compliance Option 3, the present discounted value of the quantified maintenance costs is $0 to $26.93 ($20.25*.67 + $40.50*.33).


    Owner’s manual costs

    The agency is proposing to require that the owner’s manual must describe the operational performance of the TPMS telltale and the malfunction indicator. The cost implication of adding information to the owner’s manual is small, probably on the order of $0.01 per vehicle.


    Opportunity Costs and Other Impacts from Driver Response to TPMS

    A portion of drivers who respond to TPMS will fill up their tires at an earlier time than they would have without the TPMS notification. This means that over the life of the vehicle, they will fill up their tires with more frequency. Since this requires time that would otherwise be spent with other activities, there is a small opportunity cost associated with this activity. Conversely, drivers will save time because improved treadwear will result in fewer tire purchases, resulting in fewer trips to the tire store. Moreover, when crashes are prevented, drivers avoid the delays associated with getting their vehicles towed, responding to police, and dealing with other involved drivers, as well as the time consuming process of getting repair estimates and the inconvenience of going without their vehicle while it is being repaired. These impacts are to some degree offsetting.

    Added Fill Ups

     In 2001 NHTSA conducted a special study of driver attitudes and habits towards maintaining correct pressure in their tires [31]. In this survey drivers were asked to specify the frequency with which they refilled their tires. The responses were grouped into specific categories and are summarized below:


Table VI-2
Frequency of Tire Pressure Check
Weekly 9%
Monthly 24%
When They Seem Low 25%
When Serviced 28%
Before a Long Trip 2%
Other 7%
Never 5%

    As mentioned previously, tires generally lose air at the rate of about 1 psi per month under normal circumstances. Given the average passenger car and LTV placard levels  (30 and 35 psi respectively), and the notification requirement of 25% below placard, notification would typically occur every 7.5 months for passenger cars and every 8.75 months for LTVs. Passenger cars have an expected lifetime of 20 years and LTVs have an expected lifetime of 25 years. Over this time frame, if drivers only filled their tires when notification was made by the TPMS, they would fill their tires a total of 32 (PCs) and 34 (LTVs) times over the vehicle’s life. The impact of a TPMS will vary depending on the frequency with which drivers normally check and fill their tires.

    Weekly and Monthly:

    Two of the categories of drivers listed in Table VII-1 would clearly not benefit from TPMS because they check their tires more frequently than the 7-8 months needed for a typical tire to reach its trigger point. Barring a puncture or other damage related leak, drivers who check their tires weekly or monthly will maintain adequate tire pressure without the TPMS. In fact, it is possible that these groups may eventually respond by  relying on the TPMS rather than their current routine. They thus may experience fewer tire checks over the vehicles life.

    When Low:

    The drivers who check their pressure when it "seems low" are engaging in subjective judgment that is difficult to measure. The relevant question is whether these drivers perceive tires that are 25% below their placard level to be low, or whether they perceive this prior to, or after the 25% reduction is experienced. NHTSA has no data regarding this question. To estimate the impact of TPMS on this group, a vehicle mounted tire was photographed in a controlled position under successive levels of pressure reduction (10% below placard, 20% below placard, etc.). These photos were then shown to a convenience sample of employees within NHTSA. Based on their responses, we estimate that some drivers began to notice low pressure when tires are around 40% below placard level, and that all drivers would notice low pressure when it declines to 60% below placard. Within this construct, we assume that the proportion of drivers who will notice tire pressure is low is directly proportional to the relative percentage of placard pressure that tires have lost. Thus, 100% of drivers would notice at 60% underinflation, 83% at a 50% underinflation, and 67% at 40% underinflation. Note that this represents a controlled circumstance in which people were actively looking for underinflation. The portion that would actually notice the problem and take action at each subsequent unit drop in pressure under casual circumstances is a separate issue. Our examination of the photos indicated that underinflation becomes significantly more obvious and more serious at levels of 50% and higher. It is thus believed that the progressive air losses that occur between the 40% and 60% underinflation levels will result in an increasing sense of urgency to correct the problem. Based on this, it was assumed that the probability of a driver taking action is proportional to the relative portion of drivers who could perceive the low pressure. A probability of perception was thus calculated relative to the base 40% underinflation threshold level. Thus, for example, a driver is 50% more likely to take action when a tire is 60 percent underinflated than when it is 40% underinflated  (100%/67%). These relative probabilities were used as weights to distribute the different impacts that would occur for drivers at the various levels where they would otherwise have checked their tires in the absence of TPMS. This process is illustrated in Table VI-3. In that table, the aggregate impact at each level of underinflation is summed at the bottom. This indicates that the net impact on all drivers in this category is 16 additional fill-ups for passenger car drivers and 17 additional fill-ups for LTV drivers over the vehicle’s life.


Table VI-3
Estimation of Impact of TPMS on Drivers Who Check Tires When They Seem Low
Underinflation
Level
Low Presser Perception Threshold at this (psi) Months to  Refill Lifetime Tire     Refills Difference in Lifetime Refills Vs. TPMS % Pop Who Perceive Low Tire Pr. Relative Probability of Perception Aggregrative Relative Extra Low Weight Tire Check
  PC LTV PC LTV PC LTV PC LTV       PC LTV
25% 22.5 26.25 7.5 8.75 32.0 34.3 0.0 0.0 NA NA NA NA NA
40% 18 21 12 14 20.0 21.4 12.0 12.9 66.7% 1 3.81% 0.4571 0.4898
41% 17.7 20.65 12.3 14.35 19.5 20.9 12.5 13.4 68.3% 1.025 3.90% 0.4876 0.5224
42% 17.4 20.3 12.6 14.7 19.0 20.4 13.0 13.9 70.0% 1.05 4.00% 0.5181 0.5551
43% 17.1 19.95 12.9 15.05 18.6 19.9 13.4 14.4 71.7% 1.075 4.10% 0.5486 0.5878
44% 16.8 19.6 13.2 15.4 18.2 19.5 13.8 14.8 73.3% 1.1 4.19% 0.5790 0.6204
45% 16.5 19.25 13.5 15.75 17.8 19.0 14.2 15.2 75.0% 1.125 4.29% 0.6095 0.6531
46% 16.2 18.9 13.8 16.1 17.4 18.6 14.6 15.7 76.7% 1.15 4.38% 0.6400 0.6857
47% 15.9 18.55 14.1 16.45 17.0 18.2 15.0 16.0 78.3% 1.175 4.48% 0.6705 0.7184
48% 15.6 18.2 14.4 16.8 16.7 17.9 15.3 16.4 80.0% 1.2 4.57% 0.7010 0.7510
49% 15.3 17.85 14.7 17.15 16.3 17.5 15.7 16.8 81.7% 1.225 4.67% 0.7314 0.7837
50% 15 17.5 15 17.5 16.0 17.1 16.0 17.1 83.3% 1.25 4.76% 0.7619 0.8163
51% 14.7 17.15 15.3 17.85 15.7 16.8 16.3 17.5 85.0% 1.275 4.86% 0.7924 0.8490
52% 14.4 16.8 15.6 18.2 15.4 16.5 16.6 17.8 86.7% 1.3 4.95% 0.8229 0.8816
53% 14.1 16.45 15.9 18.55 15.1 16.2 16.9 18.1 88.3% 1.325 5.05% 0.8533 0.9143
54% 13.8 16.1 16.2 18.9 14.8 15.9 17.2 18.4 90.0% 1.35 5.14% 0.8838 0.9469
55% 13.5 15.75 16.5 19.25 14.5 15.6 17.5 18.7 91.7% 1.375 5.24% 0.9143 0.9796
56% 13.2 15.4 16.8 19.6 14.3 15.3 17.7 19.0 93.3% 1.4 5.33% 0.9448 1.0122
57% 12.9 15.05 17.1 19.95 14.0 15.0 18.0 19.2 95.0% 1.425 5.43% 0.9752 1.0449
58% 12.6 14.7 17.4 20.3 13.8 14.8 18.2 19.5 96.7% 1.45 5.52% 1.0057 1.0776
59% 12.3 14.35 17.7 20.65 13.6 14.5 18.4 19.8 98.3% 1.475 5.62% 1.0362 1.1102
60% 12 14 18 21 13.3 14.3 18.7 20.0 100.0% 1.5 5.71% 1.0667 1.1429
                  Totals 26.25 1 16.00 17.14

    When Serviced:

    Many of the drivers who fill their tires "When Serviced", are also likely to maintain adequate tire pressure without the TPMS. Given the roughly 8 month time span for routine pressure drop to reach the trigger point, drivers who bring their car in for service 2 or more times per year are unlikely to ever get a TPMS warning unless their tire is damaged. Drivers who get their vehicle serviced one time each year are likely to get one warning before their next service appointment. NHTSA currently does not have information on the frequency of vehicle service, but we believe that most vehicles are serviced 1-2 times per year. The frequency of service is likely to increase as vehicles age. To estimate the impact of TPMS on tire checks for this group, it will be assumed that half of them get serviced 2 or more times per year, and half of them only once. Thus, 14% of drivers are estimated to check their tires one additional time per year due to TPMS. This would add 20 checks over the lifetime of a passenger car and 25 over the lifetime of an LTV.

    Before a Trip, Other, and Never:

    The three remaining categories, "Before a long trip", "Other", and "Never", will be treated as "When Serviced". A driver who literally "never" checked his tires would be running on wheel rims within 2-3 years due to normal pressure loss over time. Clearly, therefore, these drivers are checking their tires, or getting somebody else to check them, at some point within this time frame. It is likely that in most cases this is being done when the vehicle is serviced. Likewise, the small portion of drivers who only check tire pressure before a long trip and those in the Other category will be assumed to experience the same basic impact as those who have it checked when the vehicle is serviced.

    These 4 groups "When Serviced", Before a Long Trip", "Other", and "Never" comprise 42 percent of all drivers, and half of them or 21 percent, are estimated to experience from 20 (PC) to 25 (LTV) additional lifetime tire checks.

    It will be assumed that these tire checks are performed during the next stop for gasoline, thus no additional stops will be required. Drivers will take time to move their vehicles from the fuel pump to the air pump and then locate and fill the underinflated tire or tires. It will be assumed that this process takes 5 minutes. The average value of business travel time specified by DOT for a single driver is $18.80/hour in 1995 dollars [32]. This value was expressed in its 2001 equivalent based on the change in average hourly earnings as measured by the Bureau of Labor Statistics [33]. Values for personal travel specified by DOT were also adjusted to 2001 levels. These values are a varying percentage of the full wage rate, depending on travel type (local vs. intercity). When weighted together by travel frequency, the average value for travel time for all types of surface travel was $11.10 per hour in 2001$.

    Although the activity of checking and refilling tires is usually performed by the driver, passengers who are present would also be delayed by this process. Data from the National Personal Transportation Survey indicate that an average of 1.6 occupants ride in vehicles during daily trips. However, frequently drivers schedule trips to gas stations to avoid inconveniencing other passengers. For example, drivers may make a trip to a nearby station specifically to obtain gasoline or they may do it on the way to accomplish other chores. It is therefore likely that average ridership for trips to gas stations is less than the average for all trip types. For this analysis, it will be assumed that an average of 1.3 occupants are delayed by added fill ups. The value of a tire check is thus estimated to be $1.20 ($11.10*5/60*1.3).

    This analysis assumes annual vehicle sales of 17 million units (9 million LTVs and 8 million passenger cars). It is further assumed that the survey results noted in Table VI-2 represent the tire pressure habits of all new vehicle fleet buyers. Under these circumstances, an estimated 25 percent of drivers who currently check tires when they seem low would experience an increase of from 16 to 17 additional fill-ups over the vehicle’s life. However, as previously noted, about 10% of drivers will ignore the TPMS, and will thus not experience this impact. Moreover, about 1% of vehicles already have a TPMS that complies with this proposal. After adjusting for these cases, the total impact is 62,879,143 added lifetime fillups valued at $75.6 million. An additional 21 percent of the new fleet or 3,570,000 vehicles (those that check tires when serviced, before a long trip, never, or "other") would be driven by owners who would experience an average of 22.65 additional tire checks over the vehicle’s life. This totals 72,637,350 added checks over the vehicles’ life, valued at $86.6 million. The total for these groups is $162.2 million.


Table VI-4
Summary of Opportunity Costs Due to Added Tire Checks/Fillups
  Current Tire Check
Frequency %
Drivers
Portion w/Extra
Tire Checks w/TPMS
Additional Lifetime
Tire Checks w/TPMS
Opportunity Cost
Weekly 0.09 0 0 $0
Monthly 0.24 0 0 $0
When Low 0.25 0.25 62,879,143 $75,612,169
When Serviced 0.28 0.14 48,024,900 $57,749,942
Before a Long Trip 0.02 0.01 3,430,350 $4,124,996
Other 0.07 0.035 12,006,225 $14,437,486
Never 0.05 0.025 8,575,875 $10,312,490
         
Total   134,916,493 $162,237,083
Total Discounted @ 3%     $133,566,927
Total Discounted @ 7%     $107,079,338

    Since these added checks occur over the vehicles life they must be discounted to express their current value. At a 3% discount rate (.8233 factor weighted by vehicle type), they are valued at $133.6 million. At a 7% discount rate (.6600 factor) they are valued at $107.1 million. These results are summarized in Table VI-4.

    Note that these calculations are based on normal inflation loss. The sudden or gradual air loss that results from a tire puncture would result in repair or replacement of the tire, and thus is not considered here.


    Fees Charged for Air Pump Use

    Although air pumps have traditionally been provided as a free service by gas and service stations to lure customers, many stations now charge nominal fee – usually either .25 or .50, to use their pump. In a recent survey of air pumps at gas stations, NHTSA found that 43 percent of stations charged a fee for pump use [34]. Frequently, this fee is waived for customers who refuel their vehicles, which is the scenario contemplated here.

    NHTSA has no data regarding the average level of fees charged across the country, but fees of 25 cents and 50 cents have both been observed. To estimate the cost of fees for the added tire fill ups, it will be assumed that half of those stations charging fees charge 50 cents and half charge 25 cents. The average charge is thus 37.5 cents. It will also be estimated that half of these stations waive the fees for their gasoline customers.

    The total number of extra tire refills was estimated to be 134,916,493 (after adjustment for current systems and driver response) and 43 percent of these are estimated to occur at stations that charge for air. The total fee cost is thus estimated to be $10,877,642 (134,916,493 x .43 x .5 x $0.375). Discounted over the vehicle’s life, the present value of these fees is $8,955,371 at 3%, and $7,179,436 at 7%.

    Time Saved from Prevented Crashes

    When crashes occur, drivers must get estimates for insurance purposes before getting the vehicle fixed, and then must arrange to deliver the vehicle to the selected body shop or garage. While the vehicle is being repaired they must either rent a replacement vehicle, borrow a second car, take public transportation, or modify their activities. This occurs after the initial crash, which can tie up those involved for hours while their vehicles are towed, while police process the crash, or while occupants are transported to and treated in hospitals. There are thus lost opportunity costs associated with every crash. To the extent that TPMS prevent crashes, they will mitigate these costs.

    Table VI-5 illustrates the number of currently damaged vehicles that would be involved in crashes that are prevented by TPMS. The estimates were derived in several steps. The number of injury crash vehicles was estimated by totaling all injuries prevented by TPMS in each category and dividing by 1.35, the ratio of injuries to injury involved vehicles from the 2000 NHTSA report on the cost of motor vehicle crashes [35]. From this same report, there were approximately 4 PDO involved vehicles for every injury involved vehicle. This factor was used to estimate the total PDO involved damaged vehicles that would be saved by TPMS. PDO crashes are largely under reported – only 52% of PDO crashes are reported to the police. This factor was applied to Police reported PDOs to estimate the total number of PDO involved vehicles. Overall, about 4,900 vehicles  involved in injury-related crashes, and 47,900 involved in PDO crashes would be mitigated by TPMS.


Table VI-5
Crash Involvements Prevented by TPMS
Injured Persons
  Preventable  
  Stop. Dist Skid Flat  
MAIS1 1,328 3,529 457 3,202
MAIS2 145 393 132 670
MAIS3 62 168 32 262
MAIS4 6 16 14 36
MAIS5 4 10 5 19
Fatal 13 44 37 94
Total 1,558 4,160 953 6,671
         
Inj. Vehicles 1,150 3,071 704 4,925
Ratio PDO/Inj Veh 4   4  
Total P.R. PDO Vehicles 4,589 17,511 2,807  
Total PDO Vehicles 8,825 33,675 5,398 47,897
Total Vehicles Crash Involvement Prevented 52,822

    In order to estimate the impact these prevented crashes will have on drivers, a number of assumptions must be made. These assumptions include:

    Process delay at crash site:  This represents the time that elapses from the occurrence of a  non-injury involved crash to the time the involved drivers resume their trip. For minor bumper damage where drivers just exchange information, it might be relatively short, but in crashes where damage is more extensive and police get involved, it could result in significant delays. We estimate an average occurrence to be 30 minutes.

    Injury related delay:  This represents the additional delay that occurs for persons injured in crashes as they are initially transported to hospitals and treated for their injuries. It does not include long term work or time loss during recovery, as that is considered under lost productivity, a line item in the comprehensive costs used in determining equivalent fatalities. It is possible that there is some overlap between these 2 measures, but this is uncertain. We estimate an average of 5 hours delay for each injured person.

    Time spent getting repair estimates: Typically insurance companies require that drivers get 3 estimates before making claims for vehicle repair. In addition, drivers must spend time dealing with the administrative tasks involved in completing claims forms, contacting agents, etc. This activity occurs for both PDO and injury crashes. We estimate an average of 4 hours time lost to this process for each involved vehicle.

    The total crash related delay time mitigated by TPMS is thus estimated to be 37,185 hours for injury vehicles (4,925 vehicles x 5.5 hours *1.35 injuries/vehicle) and 38,318 hours for PDO vehicles (47,897 vehicles x 0.5 hours). The total hours of repair related activities for all vehicles is 264,112 (52,822 vehicles x 4 hours). The value of this prevented lost opportunity cost is $3,769,096 (339,614 x $11.10). Discounted at a 3% rate, this value is $3,103,030. At a 7% rate it is $2,487,670.

    Although we have analyzed these positive impacts on time savings from TPMS, they are to a large extent already included in estimates of lost productivity that are used in determining the relative values of nonfatal injuries when estimating fatal equivalents in the cost effectiveness analysis. As such, it would not be appropriate to include them again at this stage of the analysis. Therefore, this segment of the analysis is provided for illustrative purposes only, and will not be carried forward into the cost effectiveness or cost benefit analysis.

    The present value of total opportunity costs is $142,522,298 ($133,566,927 + $8,955,371) at the 3% discount rate and $114,258,774 ($107,079,338 + $7,179,436) at the 7% discount rate.


    Total Costs by Compliance Option

    Table VI-6 provides the total cost by Compliance Option adding the vehicle consumer cost, the present discounted value of maintenance costs, and opportunity costs.  


Table VI-6
Cost Summary
(Per vehicle)
At a 3 Percent Discount Rate
  Consumer Cost
Increase
Present Value of
Maintenance Costs
Opportunity Costs Total Cost
Compliance Option 1 $69.89 $0 to $55.98 $8.38 $78.27 to $134.34
Compliance Option 2 $66.08 $0 to $55.98 $8.38 $74.46 to $130.44
Compliance Option 3 $48.44 $0 to $37.23 $8.38 $56.82 to $94.05

At a 7 Percent Discount Rate
  Consumer Cost
Increase
Present Value of
Maintenance Costs
Opportunity Costs Total Cost
Compliance Option 1 $69.89 $0 to $40.50 $6.72 $76.61 to $117.11
Compliance Option 2 $66.08 $0 to $40.50 $6.72 $72.80 to $113.30
Compliance Option 3 $48.44 $0 to $26.93 $6.72 $55.16 to $82.09

Table VI-7
Cost Summary for 17 Million Vehicles
(Millions of 2001 Dollars)
At a 3 Percent Discount Rate
  Consumer Cost
Increase
Present Value of
Maintenance Costs
Opportunity Costs Total Cost
Compliance Option 1 $1,188 $0 to $952 $143 $1,331 to $2,283
Compliance Option 2 $1,123 $0 to $952 $143 $1,266 to $2,218
Compliance Option 3 $823 $0 to $633 $143 $966 to $1,599

At a 7 Percent Discount Rate
  Consumer Cost
Increase
Present Value of
Maintenance Costs
Opportunity Costs Total Cost
Compliance Option 1 $1,188 $0 to $689 $114 $1,302 to $1,991
Compliance Option 2 $1,123 $0 to $689 $114 $1,237 to $1,926
Compliance Option 3 $823 $0 to $458 $114 $937 to $1,395

    Other Maintenance Costs (non-quantified)

    The agency anticipates that there will be maintenance costs other than batteries for direct measurement systems associated with both a direct and a hybrid measurement system. With hybrid and indirect systems, the agency is aware of problems with wheel speed sensors with mis-adjustment, maintenance, and component failures. With direct systems, there is the possibility that the wheel sensors could be broken off when tires are being changed. Without estimates of these maintenance problems and costs, the agency is unable to quantify their impact.


    Testing Costs

    The test to show compliance starts with the tires at the placard pressure. The vehicle would be run for a specified time to check out the system. For this cost analysis, it is assumed that every possible combination of deflated tires would be tested. First, one tire would be deflated and the vehicle driven for 10 minutes to determine the response. Each of the other three tires would be deflated separately and the response of the system checked. Then, different combinations of two tires would be deflated at a time and the vehicle driven for ten minutes, different combinations of three tires would be deflated at the same time and finally all four tires would be deflated at the same time. Before and during these tests, the system may need to be calibrated. The data must be collected, analyzed and a test report written.

    Assuming one set of tires on one vehicle at one vehicle load, the man-hours for the test are 6 hours for a manager, 30 hours for a test engineer and 30 hours for a test technician/driver.

    Labor costs are estimated to be $75 per hour for a manager, $53 per hour for a test engineer and $31 per hour for technicians. Total testing costs are thus estimated to be $2,970 ($75 * 6 + $30 * 53 + $31 * 30). If for light trucks, it is necessary to test the vehicle unloaded and fully loaded, which is rarely done for passenger cars, since the two weights of unloaded and fully loaded are not that far apart, the test costs for light trucks would essentially double.


    Lead Time

    Based on information supplied by vehicle manufacturers and TPMS suppliers to a NHTSA special order request, there is ample supply capacity for direct monitoring systems to meet the following lead time phase-in proposal. However, the information required did not specify whether battery-less systems were being planned. The agency proposes that:

    50 percent of light vehicles produced between September 1, 2005 and August 31, 2006,

    90 percent of light vehicles produced between September 1, 2006 and August 31, 2007,

    all light vehicles produced after September 1, 2007 meet the proposed requirements.

    The agency will allow carry forward credits as it has done in other rulemakings, but only for vehicles that are manufactured during the phase-in, and will allow small volume vehicle manufacturers to meet the standard starting September 1, 2007.



    [29]  Based on a model by model analysis of data in the Mitchell Service Manual.

    [30]  Beru Tire Pressure Warning System, for No. DTNH22-00-C-02008 Task Order No. Three (3).

    [31] Tire Pressure Special Study: Interview Data, NHTSA Research Note, August 2001, DOT HS 809 315

    [32] "Departmental Guidance for Valuation of Travel Time in Economic Analysis", memorandum from Frank E. Kruesi, Assistant Secretary for Transportation Policy, U.S. Department of Transportation, to Secretarial Officers and Modal Administrators, April 9, 1997.

    [33] Series CEU0500000049, Average Hourly Earnings, 1982 Dollars, Annual Average.  The average hourly earnings was $7.53 in 1995 and $8.11 in 2001.

    [34] Stevano, Joseph M.S. Ph.D., "Air Pumps and Gas Stations:  Major Findings Regarding Availability, Reliability and Fees", Research Note, NHTSA, U.S. Department f Transportation, DOT HS 809 366, November 2001.

    [35] Blincoe L., Seay A., Zaloshnja E., Miller T., Romano E., Luchter S., Spicer R., "The Economic Impact of Motor Vehicle Crashes, 2000", U.S. Department of Transportation, NHTSA, DOT HS 809 446, May 2002.


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