Executive Summary
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, the accompanying final rule requires 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 final rule requires 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.) The final rule also requires 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 Final Regulatory Impact Analysis, the agency estimated the impacts of three TPMS systems that the manufacturers could use to meet the final rule.
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 system. At this time, we have not seen an indirect system that meets the final rule.
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.
| 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:
| 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 |
| 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 |
| 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 |
| 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 |
The net costs per equivalent life saved are estimated to be:
| 3% discount rate | 7% discount rate | |
|---|---|---|
| Compliance Option 1 | $3.6 to $8.2 million | $4.8 to $8.9 million |
| Compliance Option 2 | $3.7 to $8.5 million | $4.9 to $9.2 million |
| Compliance Option 3 | $2.3 to $5.4 million | $3.0 to $5.9 million |
Net Benefits (Benefits minus Costs) are estimated to be:
Note: negative values indicate that costs exceed benefits
| 3% discount rate | 7% discount rate | |
|---|---|---|
| Compliance Option 1 | -$14 to –$966 Mil. | -$225 to -$894 Mil. |
| Compliance Option 2 | -$48 to -$1000 Mil. | -$226 to -$915 Mil. |
| Compliance Option 3 | $252 to -$381 Mil. | $74 to -$384 Mil. |
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).
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.
In the near term, the agency believes that Option 2 is the most likely option to be selected by automobile manufacturers. To date, no one has produced a hybrid system (Option 3) and responses to requests for information from the manufacturers resulted in most indicating that they were planning on using direct systems. Individual tire pressure displays (Option 1) are more costly than a warning light and are not required by the final rule, but some manufacturers may choose them for their higher priced models. In the long run, the agency suspects that price pressure and further development of tire pressure monitoring systems could result in hybrid or indirect systems meeting the final rule and being introduced.
[1] Public Citizen, Inc. v. Mineta, 340 F.3d 39 (2d Cir. 2003).