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Teardown-Based Cost Assessment for Use in Setting Greenhouse Gas Emissions Standards

The U.S. Environmental Protection Agency (EPA) contracted with FEV, Inc. to estimate the per-vehicle cost of employing selected advanced efficiency-improving technologies in light-duty motor vehicles. The development of transparent, reliable cost analyses that are accessible to all interested stakeholders has played a crucial role in establishing feasible and cost effective standards to improve fuel economy and reduce greenhouse gas (GHG) emissions.

The FEV team, together with engineering staff from EPA's National Vehicle and Fuel Emissions Laboratory, and FEV's subcontractor, Munro & Associates, developed a robust costing methodology based on tearing down, to the piece part level, relevant systems, sub-systems, and assemblies from vehicles ?with and without? the technologies being evaluated. The parts found to be redesigned, added, or deleted to implement the new technologies were then examined by the team's manufacturing experts to assess their material composition and sequence of fabrication steps. Finally, using information from comprehensive costing databases for raw materials, labor rates, manufacturing overhead, and mark-up costs, each technology's direct manufacturing cost was determined. Where appropriate, these results were scaled to other vehicle sizes and to similar technologies, and sensitivity analyses of key inputs such as raw material costs were performed. Marketplace validation was conducted at all stages of the analysis by cross-checking with data developed by entities and processes external to the team.

Costed technologies include:

mild and full parallel hybrid electric vehicles (HEVs)

turbocharged, downsized gasoline direct-injection (GDI) engines

6- and 8-speed automatic and dual-clutch transmissions (DCTs)

hydraulically-actuated variable valve timing and lift (VVT/L)

electrically-driven air conditioning compressor

In addition to this work already completed for EPA, additional case studies are underway looking at advanced high pressure diesel engine technologies, exhaust gas recirculation systems and micro hybrid technology configurations. These studies have been commissioned by the International Council on Clean Transportation (ICCT) for the European light-duty vehicle market.

This paper presents the methodology and results of the work done by FEV and Munro for EPA, along with a number of lessons learned by the team along the way. This approach to costing new technologies has proven to be very robust and of substantial value in recent standards-setting activities related to light-duty vehicle GHGs and fuel economy. Its success makes it likely that this approach will continue to find use in the future, not only in government standards setting activities, but also for private interests with a desire to provide, for all to see, an understanding of the cost of applying innovative technologies to products in the transportation sector.

Brian Nelson

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