IX.  Costs


    A. Indirect TPMSs

    NHTSA estimates that the cost of an indirect TPMS that will meet the one-tire, 30 percent compliance option will be $13.29 per vehicle, if the vehicle already has a four-wheel, four-channel (four wheel-speed sensors) ABS. In the 2000 model year, about 67 percent of all new light vehicles were equipped with a four-wheel ABS. However, about 31 percent of these vehicles only had a three-channel system. A three-channel system has one wheel speed sensor for each front wheel and one for the rear axle. Thus, in order to meet the requirement that the TPMS be able to detect when any tire is significantly under-inflated, a vehicle with a three-channel ABS must be redesigned from having one wheel speed sensor for the rear axle to a wheel speed sensor for each rear wheel. The agency estimates that this will cost $25 per vehicle. Accordingly, the agency estimates that the average cost of providing an indirect TPMS to a vehicle already equipped with ABS will be $21.13 ($13.29 + $25 * .3135) per vehicle.

    For vehicles not currently equipped with ABS, manufacturers would have to install either four wheel speed sensors at a cost of $130 per vehicle, or ABS at a cost of $240 per vehicle, in addition to an indirect TPMS. Thus, the average cost of providing an indirect TPMS to a vehicle not already equipped with ABS will be $143.29 ($130 + $13.29) if the manufacturer installs four-wheel speed sensors, or $253.29 ($240 + $13.29) per vehicle if the manufacturer installs ABS.


    B. Direct TPMSs

    NHTSA estimates that the cost of a direct TPMS that will meet the four-tire, 25 percent compliance option will be $70.35 per vehicle, if the manufacturer chooses to install an individual tire pressure display. This includes $7.50 for each tire pressure sensor ($30 per vehicle), $19 for the control module, $3.85 for an individual tire pressure display, $6 for four valves, and $11.50 for the combination of an instrument panel telltale, assembly, and miscellaneous wiring. The agency assumes that about one percent of vehicles currently comply. Thus, the agency estimates that the incremental cost will be $69.65 per vehicle ($70.35 * 99 percent) if manufacturers install an individual tire pressure display. (78) If manufacturers install only a warning telltale, the agency estimates that the incremental cost will be $65.84 ($70.35 - $3.85 (the cost of a individual tire pressure display) * 99 percent).


    C. Hybrid TPMSs

    A hybrid TPMS consists of an indirect TPMS for vehicles equipped with an ABS and two direct pressure sensors and a radio frequency receiver. As noted above, insofar as NHTSA is aware, no manufacturer is currently planning to produce a hybrid TPMS. If a manufacturer were to produce a hybrid TPMS, the agency believes that such a system would be able to detect when one to four tires are 25 percent or more below placard. TRW estimated that the cost of such a system would be about 60 percent of the cost of a direct TPMS. Since the hybrid TPMS would not be able to tell drivers the inflation pressure in all four tires, the agency assumes that this type of TPMS would not be accompanied by a display system that would allow the driver to see the pressure for each tire.

    Consequently, the agency estimates that the cost of a hybrid TPMS that would meet the four-tire, 25 percent compliance option would be $39.90 ($70.35 - $3.85 (the cost of an individual tire pressure display) * .60).


    D. Vehicle Cost

    If all light vehicles meet the four-tire, 25 percent compliance option, the agency assumes that manufacturers will install hybrid TPMSs on the 67 percent of vehicles that are currently equipped with an ABS and direct TPMSs on the 33 percent of vehicles that are not so equipped. Thus, the agency estimates that the average incremental cost if all vehicles meet the four-tire, 25 percent compliance option will be $48.19 per vehicle [$39.90 x .67 + $66.50 x .33] x .99 (to account for one percent current compliance)). Since approximately 16 million vehicles are produced for sale in the U.S. each year, the total annual vehicle cost will be about $771 million per year.

    If all light vehicles meet the one-tire, 30 percent compliance option, the agency assumes that manufacturers will install an indirect TPMS on vehicles currently equipped with ABS (about 67 percent of new light vehicles), and a direct TPMS on vehicles not equipped with ABS (about 33 percent of new light vehicles). The agency also assumes that about five percent of vehicles currently meet the one-tire, 30 percent compliance option. Thus, the average incremental cost if all vehicles meet the one-tire, 30 percent compliance option will be $33.34 [($21.13 * .67) + ($66.50 (79) * .33) * .95]. Since approximately 16 million vehicles are produced for sale in the U.S. each year, the total annual vehicle cost will be about $533 million per year.


    E. Maintenance Costs

    Each pressure sensor in direct TPMSs needs a battery. Currently, these batteries last five to ten years. Thus, they will have to be replaced to keep the system functioning over the full life of a vehicle. At this time, all tire pressure sensors are enclosed packages that do not open so that the battery can be replaced. Thus, when the battery is depleted, the entire sensor must be replaced.

    To estimate the present discounted value of this cost, the agency is making the following assumptions. First, the agency assumes that the pressure sensors will be replaced the second time the vehicle's tires are changed, in the 90,000 to 100,000 mile range. The agency multiplied the cost of the sensor ($7.50 each, or $30 for the vehicle) by three to account for typical aftermarket markups. After applying discount factors, the agency estimates that the maintenance costs for direct TPMSs will be $40.91 per vehicle. For hybrid TPMSs, with direct pressure sensors in two wheels, the agency estimates the average maintenance costs will be half the maintenance costs of direct TPMSs, or $20.45.

    Thus, the agency estimates that if all light vehicles meet the four-tire, 25 percent compliance option, the present discounted value of the maintenance costs will be $27.20 ($20.45 x .67 + $40.91 x .33) per vehicle. Since approximately 16 million vehicles are produced for sale in the Unites States each year, the total annual maintenance costs will be about $435 million.

    NHTSA notes that the maintenance costs associated with direct and hybrid TPMSs may decrease significantly in the future if manufacturers are able to mass produce a pressure sensor that does not require a battery. One TPMS manufacturer, IQ-mobil Electronics of Germany, commented that it has developed a "batteryless transponder chip" that "costs half as much as the battery transmitter it replaces."

    Indirect TPMSs do not need a battery, and are assumed to have no maintenance costs for purposes of this analysis. If all light vehicles meet the one-tire, 30 percent compliance option, the agency assumes that manufacturers will install an indirect TPMS on vehicles currently equipped with ABS (about 67 percent of new light vehicles), and a direct TPMS on vehicles not equipped with ABS (about 33 percent of new light vehicles). Thus, the agency estimates that if all light vehicles meet the one-tire, 30 percent compliance option, the present discounted value of the maintenance costs will be $13.50 ($40.91 * .33) per vehicle.


    F. Testing Costs

    The agency estimates that the man-hours required to complete the necessary compliance testing will be 6 hours for a manager, 30 hours for a test engineer, and 30 hours for a technician/driver. The agency estimates that the labor costs will be $75 per hour for a manager, $53 per hour for a test engineer, and $31 per hour for a technician/driver. Thus, the agency estimates that the total costs will be $2,970 per vehicle model under both compliance options.


    G. Unquantified Costs

    The agency anticipates that there may be other maintenance costs for both direct and indirect TPMS. For example, with indirect TPMSs, there may be problems with wheel speed sensors and component failures. With direct TPMSs, the pressure sensors may be broken off when tires are changed. The agency requested comments on this issue in the NPRM, but received none. Without estimates of these maintenance problems and costs, the agency is unable to quantify their impact.

    The agency also notes that in order to benefit from the TPMS, drivers must respond to a warning by re-inflating their tires. To accomplish this, most drivers will either make a separate trip to a service station or take additional time to inflate their tires when they are at a service station for fuel. The process of checking and re-inflating tires is relatively simple, and probably would take from three to five minutes. The time it would take to make a separate trip to a service station would vary depending on the driver's proximity to a station at the time he or she was notified.

    It is likely that drivers who take the time to re-inflate their tires would consider this extra time to be fairly trivial. Since the action is voluntary, by definition, they would consider it to be worth the potential benefits they will derive from properly inflated tires. However, when tallied across the entire driving population, the total effort involved in terms of man-hours may be significant. NHTSA has no data to indicate what portion of drivers would make a separate trip or wait to re-inflate their tires when they next visited a service station. Thus, the agency has not been able to quantify this cost.


    H. ABS Costs

    As noted above, the agency estimates that the average cost of equipping a vehicle with ABS is $240.


    I. Net Costs and Costs Per Equivalent Life Saved

    The agency estimates that if all light vehicles meet the four-tire, 25 percent compliance option, the net cost [vehicle cost + maintenance costs -- (fuel savings + tread life savings)] will be $53.87 [$48.19 + $27.20 -- ($16.43 + $5.09)]. As noted above, the agency estimates the total annual cost will be about $771 million. The agency estimates the total annual net cost will be about $862 million [$771 million + $435 million -- ($263 million + $81 million)]. NHTSA estimates that the net cost per equivalent life saved will be about $4.3 million.

    The agency estimates that if all light vehicles meet the one-tire, 30 percent compliance option, the net cost will be $44.13 [$33.34 + $13.50 -- ($2.06 + $0.65)]. The agency estimates that the total annual cost will be about $533 million per year, and the total annual net cost will be about $706 million [$533 million + $216 million -- ($33 million + $10 million)]. NHTSA estimates that the net cost per equivalent life saved will be about $5.8 million.




    78 The agency estimates that one percent of vehicles are currently equipped with a TPMS that complies with the requirements of the standard.

    79 $66.50 is the cost of a direct TPMS with only a warning telltale.