*5.1. Energy E*ffi*ciency*

### 5.1.1. Fuel Economy Standard for Light Duty Vehicles (LDV)

Implementation of fuel economy standards for new LDVs that foster the improvement of LDV energy efficiency by increasing fuel economy by 5% yearly departing from year 3 to 7, generating a 35% increase in relation to the reference year where the LDVs have a fuel efficiency of 12 km/lt. An additional average investment cost of 918 USD is assumed per improved vehicle throughout the first five years [41]. This additional cost was calculated, according to this author, by estimating the global cost for manufacturers to comply with this standard which resulted in a value of 4526 MUSD, which was divided by the number of vehicles sold during those first 5 years of this measure summing up 4.9 million LDV according to [36]. In subsequent years, an average annual performance growth of 2.3% is assumed as an inertial improvement due to the manufacturer´s new infrastructure installed to

comply with this standard and which was amortized as mentioned in the first 5 years of LDV sales, so that new LDVs from the sixth year on, no longer have an extra unit cost. Finally, the maintenance (M) costs are considered to be similar to those of existing LDVs in the BLS.

### 5.1.2. Fuel Economy Standard for Heavy Duty Vehicles-Freight (HDV-F)

This measure encourages the implementation of a performance standard that increases the fuel economy of HDV-F by 20% by the fifth year of operation of the regulations, assuming an annual increase of 4% in the fuel economy departing from year 4 to 8. An additional average investment cost of 378 USD per improved vehicle is assumed throughout the mentioned five years, emulating the USA draft fuel economy standard for heavy duty vehicles class 2B-8 according to [42]. This additional cost was calculated, according to [36] by estimating the global cost for manufacturers to comply with this standard which resulted in a value of 160 MUSD, which was divided by the number of vehicles sold during those 5 years of this measure summing up 423,155. An average annual performance increase of 2.5% after the eighth year is assumed as an inertial improvement due to the manufacturer´s new infrastructure installed to comply with this standard and which was amortized in the 5 years mentioned of HDV-F sales, so that new HDV-F from the eighth year on, no longer have an extra unit cost. Finally, the maintenance costs are like those of used vehicles in the BLS.
