Executive Summary

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    Under section 13 of the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act, the Secretary of Transportation was required to complete a rulemaking for a regulation mandating a warning system in each new motor vehicle to indicate to the operator when a tire is significantly under-inflated.

    Accordingly, NHTSA is proposing to require a tire pressure monitoring system (TPMS) to be installed in all new passenger cars, multipurpose passenger vehicles, trucks, and buses that have a gross vehicle weight rating (GVWR) of 4,536 kg (10,000 lbs.) or less, except those vehicles with dual wheels on an axle. The proposal would require that the driver be given a warning when tire pressure is 25 percent or more below the vehicle manufacturer’s recommended cold tire inflation pressure (placard pressure) for one to four tires. (We note that the agency had previously issued a final rule providing two different compliance options with different levels of stringency. However, a court decision [1] found that the TREAD Act requires a TPMS with a four-tire detection capability, so the court vacated the standard for further rulemaking consistent with its opinion.) Thus, this NPRM proposes a single performance requirement (four-tire, 25 percent under-inflation detection). The NPRM also proposes a requirement for a TPMS malfunction indicator, as well as a warning when the system detects under-inflation of 25 percent or more in one to four tires.

    For this Preliminary Regulatory Impact Analysis, the agency estimated the impacts of three TPMS systems that the manufacturers could use to meet the proposal.

    Compliance Option 1 assumes that manufacturers will supply a direct system with a warning lamp and either an interactive or continuous readout of individual tire pressures.

    Compliance Option 2 assumes that manufacturers will supply a direct system with a warning lamp.

    Compliance Option 3 assumes that manufacturers with an ABS system would use a hybrid measurement system (indirect system with two direct tire pressure measurements) and vehicles without ABS would use a direct measurement system. We assume a warning lamp will be provided for drivers.

    Since this is a performance standard, the manufacturers can use any system to meet the performance requirements. It may be possible to refine an indirect system to meet a four-tire, 25% under-inflation detection proposal. Comments are requested on feasibility, design, and costs of such a system.

    Compliance Option 1 assumes that manufacturers will supply either an interactive or continuous readout of individual tire pressures. The agency believes that some proportion of drivers that have an interactive or continuous readout of individual tire pressures will pay attention to this information and fill their tires with air more often than those that wait for a warning to be given. These drivers will attain higher benefits from their systems because of this capability.

    Low tire pressure may have an influence on skidding and loss of control crashes, crashes resulting from flat tires and blowouts, and may influence any crash that involves braking, since low tire pressure can result in increased stopping distance. The quantified safety benefits are based on these three types of crashes.


Annual Full Fleet Benefits of TPMS
  Non-fatal Injuries Reduced
(All AIS levels)
Fatalities Reduced
Compliance Option 1 8,568 121
Compliance Option 2 8,373 119
Compliance Option 3 8,373 119

    The estimated consumer cost increase for an average new vehicle would be $69.89 for Compliance Option 1, $66.08 for Compliance Option 2, and $48.44 for Compliance Option 3.

    The net costs are estimated to be:


Net Costs per Vehicle
At a 3 Percent Discount Rate
(2001 Dollars)
Opt. Vehicle
Costs
Present Value
of Maintenance
Costs*
Present Value
of Opportunity
Costs of
Refilling Tires
Present Value
of Fuel Savings
Present Value
of Tread Wear
Savings
Present Value
of Property Damage
and Travel
Delay Savings
Net Costs
1 $69.89 $0 to $55.98 $8.38 $23.08 $4.24 $7.79 $43.16 to
$99.14
2 $66.08 $0 to $55.98 $8.38 $19.07 $3.42 $7.70 $44.27 to
$100.25
3 $48.44 $0 to $37.23 $8.38 $19.07 $3.42 $7.70 $26.63 to
$63.86

    *  Maintenance costs range from a battery-less TPMS to a TPMS with 4 batteries for Compliance Options 1 and 2, and 2 batteries for Compliance Option 3.


Net Costs per Vehicle
At a 7 Percent Discount Rate
(2001 Dollars)
Opt. Vehicle
Costs
Present Value
of Maintenance
Costs*
Present Value
of Opportunity
Costs of
Refilling Tires
Present Value
of Fuel Savings
Present Value
of Tread Wear
Savings
Present Value
of Property Damage
and Travel
Delay Savings
Net Costs
1 $69.89 $0 to $40.50 $6.72 $18.34 $6.03 $6.25 $45.99 to
$86.49
2 $66.08 $0 to $40.50 $6.72 $15.14 $4.98 $6.16 $46.52 to
$87.02
3 $48.44 $0 to $26.93 $6.72 $15.14 $4.98 $6.16 $28.88 to
$55.81

    *  Maintenance costs range from a battery-less TPMS to a TPMS with 4 batteries for Compliance Options 1 and 2, and 2 batteries for Compliance Option 3.


Total Annual Costs for 17 Million Vehicles
(Millions of 2001 Dollars)
At a 3 Percent Discount Rate
Opt. Vehicle
Costs
Present Value
of Maintenance
Costs*
Present Value
of Opportunity
Costs of
Refilling Tires
Present Value
of Fuel Savings
Present Value
of Tread Wear
Savings
Present Value
of Property Damage
and Travel
Delay Savings
Net Costs
1 $1,188 $0 to $952 $142 $392 $72 $132 $734 to
$1,685
2 $1,123 $0 to $952 $142 $324 $58 $131 $753 to
$1,704
3 $823 $0 to $633 $142 $324 $58 $131 $453 to
$1,086

    *  Maintenance costs range from a battery-less TPMS to a TPMS with 4 batteries for Compliance Options 1 and 2, and 2 batteries for Compliance Option 3.


Total Annual Costs for 17 Million Vehicles
(Millions of 2001 Dollars)
At a 7 Percent Discount Rate
Opt. Vehicle
Costs
Present Value
of Maintenance
Costs*
Present Value
of Opportunity
Costs of
Refilling Tires
Present Value
of Fuel Savings
Present Value
of Tread Wear
Savings
Present Value
of Property Damage
and Travel
Delay Savings
Net Costs
1 $1,188 $0 to $689 $114 $312 $103 $106 $782 to
$1,470
2 $1,123 $0 to $689 $114 $257 $85 $105 $791 to
$1,479
3 $823 $0 to $458 $114 $257 $85 $105 $491 to
$949

    *  Maintenance costs range from a battery-less TPMS to a TPMS with 4 batteries for Compliance Options 1 and 2, and 2 batteries for Compliance Option 3.

    The net costs per equivalent life saved are estimated to be:


Net Cost per Equivalent Life Saved
  3% discount rate 7% discount rat
Compliance Option 1 $3.6 to $7.8 million $4.5 to $8.5 million
Compliance Option 2 $3.7 to $8.1 million $4.7 to $8.7 million
Compliance Option 3 $2.3 to $5.2 million $2.9 to $5.6 million

    Net Benefits (Benefits minus Costs) are estimated to be:

    Note:  negative values indicate that costs exceed benefits


Net Benefits with a Value of $3.5M per Statistical Life*
(Millions of 2001 Dollars)
  3% discount rate 7% discount rat
Compliance Option 1 $25 to –$927 Mil. -$174 to -$862 Mil.
Compliance Option 2 -$13 to -$965 Mil. -$198 to -$887 Mil.
Compliance Option 3 $287 to -$346 Mil. $102 to -$356 Mil.

    *  Maintenance costs range from a battery-less TPMS to a TPMS with 4 batteries for Compliance Options 1 and 2, and 2 batteries for Compliance Option 3.

    Results from the analyses included herein are:

    In a probabilistic uncertainty analysis (Chapter X), we identified the major independent uncertainty factors having appreciable variability and estimated the uncertainty or quantified the uncertainty by their probability distributions. Assuming a battery-less TPMS at a 3 percent discount rate, the three compliance options have between a 34 and 93 percent chance to produce a cost per equivalent life saved less than $3.5 million (and a 92 to 100 percent chance to produce a cost per equivalent life saved less than $5.5 million). At the other end of the range, TPMS with batteries at a 7 percent discount rate have almost no chance to produce a cost per equivalent life saved less than $3.5 million (and almost no chance for Options 1 and 2 and a 32 percent chance for Option 3 to produce a cost per equivalent life saved less than $5.5 million).

    Another way to look at uncertainty is to examine the range of mean values of the cost per equivalent life saved, which range from costs of $2.4 to $9.1 million at 3 percent and $3.2 to $9.8 million at a 7 percent discount rate, depending on the compliance option chosen by manufacturers. The 90 percent certainty level is from $1.5 million to $14.5 million per equivalent life saved at a 3 percent discount rate and $2.2 million to $15.7 million at a 7 percent discount rate. In other words, given all the uncertainties examined combined, we are 90 percent certain that the cost per equivalent life saved is between $1.5 and $15.7 million.

    The mean value for net benefits-costs ranges from a net cost of $650 million to a net benefit of $599 million, depending upon the specific technology chosen for compliance and the discount rate utilized. A 90 percent certainty level around the net benefits-costs results in a range of a net cost of $1,156 million to a net benefit of $1,302 million.



    [1]  Public Citizen, Inc. v. Mineta, 340 F.3d 39 (2d Cir. 2003).


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