CALIFORNIA MOTOR VEHICLE STOCK, TRAVEL AND FUEL FORECAST

CALIFORNIA MOTOR VEHICLE STOCK, TRAVEL AND FUEL FORECAST California Department of Transportation Division of Transportation System Information November 2003

CALIFORNIA MOTOR VEHICLE STOCK, TRAVEL AND FUEL FORECAST GOVERNOR ARNOLD SCHWARZENEGGER STATE OF CALIFORNIA SUNNE WRIGHT-MCPEAK, SECRETARY BUSINESS, TRANSPORTATION AND HOUSING AGENCY JEFF MORALES, DIRECTOR DEPARTMENT OF TRANSPORTATION DIVISION OF TRANSPORTATION SYSTEM INFORMATION OFFICE OF TRAVEL FORECASTING AND ANALYSIS STATEWIDE TRAVEL ANALYSIS BRANCH NOVEMBER 2003 This report was prepared in cooperation with the U.S. Department of Transportation Federal Highway Administration

CALIFORNIA MOTOR VEHICLE STOCK, TRAVEL AND FUEL FORECAST NOVEMBER 2003 For individuals with sensory disabilities, this document is available in Braille, large print on audiocassette, or computer disk. To obtain a copy in one of these alternate formats, please call or write to the Caltrans Division of Transportation System Information, Office of Travel Forecasting and Analysis, Statewide Travel Analysis Branch, 1120 N street, Room 5525, P. O. Box 942874, MS 38 Sacramento, CA 94274-0001. (916) 654-6925 Voice, or use the California Relay Service TTY at 1-800-735-2929. The report may be found at www.dot.ca.gov/hq/tsip. The contents of this report reflect the view of the authors who are responsible for the facts and accuracy of the data presented herein. The contents do not necessarily reflect the official policy of the Department of Transportation. This report does not constitute a standard, specification, or regulation. This report was prepared in cooperation with U. S. Department of Transportation, Federal Highway Administration.

Table of Contents Page List of Tables and Figures.................... ii I. SUMMARY.................... 1 II. INTRODUCTION................... 6 III. MVSTAFF PROCESS OVERVIEW............ 7 IV. FORECAST ASSUMPTIONS.............. 10 V. FORECAST RESULTS................ 20 A. Motor Vehicle Stock.............. 20 B. Vehicle Miles of Travel............. 24 C. Vehicle Fuel Consumption............ 28 D. Vehicle Fuel Economy............. 32 REFERENCES........................ 35 APPENDIX A: Vehicle Body Type Definitions........... 36 APPENDIX B. California Vehicle Miles/Kilometers of Travel By County & Road System 1990, 1995, 2000, 2002, 2005, 2010, 2015, 2020 and 2025................. 37 APPENDIX C. California Vehicle Fuel Consumption By County & Fuel Type 1995, 2000, 2005, 2010, 2015, 2020 and 2025.. 56 APPENDIX D. California Truck Miles of Travel By County & Road System 2000, 2005, 2010, 2015, 2020 and 2025....... 64 I

List of Tables and Figures Table No. Page 1 California Total Vehicles................. 21 2 California Total Vehicle Miles of Travel............ 25 3 California Total Vehicle Fuel Consumption.......... 29 4 California Total Vehicle Fleet Fuel Economy.......... 33 Figure No. S1 Motor Vehicle Stock, Travel and Fuel Forecast........ 3 S2 Percent Change by Decade in Annual VMT and Main Variables Affecting it....................... 4 S3 California Total Vehicle Miles of Travel 1965 2025....... 5 S4 California Total Vehicle Fuel Consumption 1965-2025..... 5 1 Motor Vehicle Stock, Travel and Fuel Forecasting Process... 9 2 California Total Population 2002-2025............ 12 3 U. S. Consumer Price Index 2002-2025........... 13 4 California Total Personal Income in 1967 Dollars........ 14 5 California Personal Income Per Person in 1967 Dollars..... 15 6 Gasoline Price Per Gallon in 1967 Dollars........... 16 7 Prime Lending Rate 2002-2025.............. 17 8 California Total Vehicles 2002-2025............ 19 9 California Total Vehicles by Body Type........... 22 10 California Total Vehicle Miles of Travel........... 23 11 California Vehicle Miles of Travel by Body Type........ 26 12 California Total Vehicle Fuel Consumption.......... 27 13 California Vehicle Fuel Consumption by Body Type...... 30 14 California Total Vehicle Fleet Fuel Economy......... 31 15 California Vehicle Fleet Fuel Economy by Body Type...... 34 ii

Conversion Factors The following factors are used in this report to convert U.S. units to metric units. Kilometers = 1.609 x Miles Liters = 3.785 x Gallons

I. SUMMARY This is the nineteenth of a series of California Motor Vehicle Stock, Travel and Fuel Forecast (MVSTAFF) reports. The reports provide historical estimates and forecasts of the number of registered vehicles, miles of travel, fuel consumption, and fuel economy on a statewide basis. The forecasts are disaggregated into six vehicle body types (autos, four weight classes of trucks, and motorcycles) and two fuel types (gasoline and diesel). The forecasts are primarily intended for short and long range statewide transportation planning, traffic forecasting and projections of revenues from excise taxes on fuel. In response to numerous requests, the statewide vehicle miles of travel (VMT) forecasts are distributed among the 58 counties and two major road systems (State Highways and all Other public roads) for substate planning, including transportation and air quality modeling and analysis. For the purpose of air quality conformity analysis the 1990 county VMT table is included in the appendix. Also included in this report are the vehicle fuel consumption (VFC) distributions by the 58 counties and the two-fuel types gasoline and diesel. The MVSTAFF process requires long-term projections of statewide population, economic growth (total personal income), fuel prices, inflation, and interest rates. For this forecast, population numbers were obtained from the latest California Department of Finance (DOF) population projection reports (Ref. 3 and 4). Income projections and other variables, including fuel price, were derived from the September 2003 UCLA Anderson Forecast for the Nation and California (Ref. 1). The MVSTAFF forecast, therefore, reflects the same scenario superimposed on the DOF population and the existing legislation regarding current and future sales and excise taxes on fuel. The socioeconomic assumptions are further documented in the report. The forecast results are summarized in Figure-S1. For the current year (2003), total vehicle miles of travel (VMT), and vehicle fuel consumption (VFC) are projected to decrease by 0.39%, and 0.36%, respectively, from the previous year. In 2004, the economy is expected to drop slightly. Real total personal income per person drops by 1.23%. However, total vehicles, VMT and fuel consumption are projected to increase moderately by 1.29%, 2.57% and 2.07% respectively. The long-term forecast is for total vehicles, vehicle travel, and fuel consumption to continue to increase but at declining rates. Under the assumption that the Corporate Average Fuel Economy (CAFE) standard for new cars will remain at 27.5 miles per gallon, and the projected increase in the proportion of heavy duty truck travel, the fleet fuel economy will reach a peak value of 18.82 miles per gallon by year 2021. 1

Past and projected growth in California vehicle miles of travel are affected by: population, real total personal income per person (IPP), vehicles per person (VPP), and the fuel cost per mile (FCPM) of travel, all of which are put in a historical perspective in Figure-S2. The figure shows the percent change in the variables, from the beginning of one decade to the next, for the past 50 years and the 20-year forecast period. The following can be noted from the figure: The decade of the 1950's experienced a 71% increase in VMT, which was driven primarily by a 49% increase in population and helped along with moderate increases in per capita total personal income and vehicle ownership. The 1960's saw a 64% increase in VMT although population grew at about half the rate that it did in the 1950's (26% vs. the previous 49%). The driving force in the 1960's would appear to be the growth in per capita income and vehicle ownership, the highest in the 50-year history. The 1970's produced the smallest percentage increase in VMT (38%) in the first 40 years as a result of the lowest percentage increase in population in this 40- year period, a slower growing economy and sharply rising fuel prices (55%) in the last half of the decade. In the 1980's, VMT grew by 62%, rivaling its growth in the 1950's and 1960 s. At the same time per capita income and vehicle ownership grew by only 12% and 7%, respectively. Most of the growth in VMT in the 1980's can therefore be attributed to strong population gains (26%) and the precipitous drop in the real fuel cost per mile of travel (57%), resulting from a 45% drop in the real price of fuel and a 30% increase in the on-road fleet fuel economy. In the 1990's, VMT grew by only 19% as population growth slows down to 15%; personal income shows moderate (9%) growth. Fuel cost per mile increases 12% due to a sharp increase in fuel prices in 1999 and 2000. In the 2000 s VMT is forecasted to grow 25% as population growth rates increase slightly above the 1990 s (17%), personal income increase moderately (6%). Fuel cost per mile is expected to drop 11% in the 2000 s. In the 2010 s VMT grows moderately (23%) as population growth rate increase slightly under the 1990 s (14%) but personal income increase 24% much better than the rate in the 2000 s. Fuel cost per mile is forecasted to be very stable, a change of only 3.0% in 10 years. Estimates of total system and state highway system vehicle miles of travel for the period 1965-2025 are shown in Figure-S3. Estimates of gasoline, diesel and total fuel consumption for the years 1965-2025 are shown in Figure-S4. 2

VEHICLES (MILLIONS) VFC (BILLIONS) 45 40 35 30 25 Figure-S1 Motor Vehicle Stock, Travel and Fuel Forecast CALIFORNIA TOTAL VEHICLES 20 2002 2007 2012 2017 2022 29 28 27 26 25 24 23 22 21 20 19 18 17 16 YEAR VEHICLE FUEL CONSUMPTION 2002 2007 2012 2017 2022 YEAR YEAR 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 VEH 24.66 24.99 25.32 25.86 26.50 27.06 27.69 28.34 29.00 29.57 30.15 30.67 VMT 321.4 320.1 328.3 335.3 345.3 353.5 362.9 372.4 381.9 391.1 399.6 407.2 VFC 17.66 17.59 17.96 18.24 18.71 19.10 19.55 20.02 20.49 20.93 21.35 21.73 MPG 18.20 18.20 18.28 18.38 18.46 18.51 18.56 18.60 18.64 18.68 18.71 18.74 VMT (BILLIONS) MILES PER GALLON 550 500 450 400 350 VEHICLE MILES OF TRAVEL 300 2002 2007 2012 2017 2022 YEAR VEHICLE FLEET FUEL ECONOMY 19 18.9 18.8 18.7 18.6 18.5 18.4 18.3 18.2 18.1 18 2002 2007 2012 2017 2022 YEAR CALIFORNIA TOTAL VEHICLES, VMT, FUEL AND MPG FORECAST YEAR 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 VEH 31.24 31.83 32.46 33.12 33.79 34.49 35.18 35.86 36.55 37.23 37.92 38.61 VMT 415.5 424.1 433.2 442.4 451.8 461.4 470.5 479.3 488.0 496.6 505.1 513.3 VFC 22.15 22.58 23.05 23.53 24.02 24.52 25.01 25.47 25.93 26.38 26.84 27.27 MPG 18.76 18.78 18.79 18.80 18.81 18.81 18.82 18.82 18.82 18.82 18.82 18.82 3

PERCENT CHANGE BY DECADE IN ANNUAL VMT 100 Figure-1 AND THE MAIN VARIABLES AFFECTING IT 50 PERCENT CHANGE 0-50 -100 50-60 60-70 70-80 80-90 90-00 00-10 10-20 DECADE VMT POP IPP VPP FCPM VMT: Vehicle Miles of Travel POP: Population IPP: Total Personal Income Per Person (67$) VPP: Vehicle Per Person FCPM: Fuel Cost Per Mile (67$) 4

Figure-S3 CALIFORNIA TOTAL VEHICLE MILES OF TRAVEL (1965-2025) 600 VMT (BILLION MILES) 500 400 300 200 100 30 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 TOTAL YEAR STATE HIGHWAYS Figure-S4 CALIFORNIA TOTAL VEHICLE FUEL CONSUMPTION (1965-2025) VFC (BILLION GALLONS) 25 20 15 10 5 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 YEAR TOTAL GAS DIESEL 5

II. INTRODUCTION The California Department of Transportation utilizes estimates and forecasts of statewide vehicle miles of travel (VMT) and vehicle fuel consumption (VFC) for a number of planning and reporting purposes. For example, estimates of VMT are needed annually for the FHWA-mandated Highway Performance Monitoring System (HPMS) program, and as input to the California Highway Patrol annual reporting system. Intermediate and longterm forecasts of VMT and VFC are used for system planning, projections of revenues from excise taxes on fuels, and air quality and energy conservation programs. To ensure that the forecasts are produced with appropriate, consistent and state-of-the-art methodologies, the Division of Transportation System Information has developed the California Motor Vehicle Stock, Travel and Fuel Forecast (MVSTAFF) process which it updates on a continuous basis. The results of applying the process are reported in the MVSTAFF Report, which has been published annually since 1984, except for 1990. The forecasts are based on socioeconomic data developed by the Office of Travel Forecasting and Analysis of the Division of Transportation System Information using the latest California Department of Finance population projections (Ref. 3 & 4) and economic projections from the UCLA Anderson Forecast (Ref.1). These forecasts are primarily intended for use at the statewide level. However, the statewide total VMT forecasts have been allocated down to the county level in response to numerous requests for data at a substate level for transportation and air quality modeling and analysis. The remaining sections of the report follow the outline listed below: An overview of the MVSTAFF process. A brief description of the socioeconomic projections, which drive the forecasting process. A brief description of the forecast results. An appendix gives the county VMT (Appendix B), VFC (Appendix C), and TMT (Appendix D) distribution based on statewide forecasts. The statewide total VMTs and truck VMTs are distributed to the 58 counties by State Highways and all "Other" public roads and the statewide VFCs are distributed to the 58 counties by gasoline fuel and diesel fuel. 6

III. MVSTAFF PROCESS OVERVIEW The MVSTAFF process is a recursive procedure, which estimates, for each year of the forecast period, the following: The motor vehicle stock (average number of currently registered vehicles) by six body types, two fuel types, and 25 model years or age groups. The fuel economy of the total fleet and each model year fleet. The vehicle travel and fuel consumption for the total fleet and each model year fleet. The process consists of four major parts, which are outlined in Figure-1 and briefly described below. 1. Inventories Base year estimates and future year projections of the socioeconomic variables which are assumed to be the causative factors for acquiring vehicles and generating travel; base year fuel consumption; and explicit assumptions about new vehicle fuel economy. The base year vehicle stock stratified by vehicle type and model year, and derived estimates of the on-road fuel economy of each stratum of vehicles in the base year fleet. 2. The Stratified Rate Model When applied to the base year inventory, this model estimates base year vehicle travel, fuel consumption and fuel economy for each vehicle type and the total fleet. When applied in the forecasting mode, the Stratified Rate Model first updates the composition and fuel economy of the fleet by one year and then estimates the next year's stratified fleet, vehicle travel, fuel consumption and fuel economy. Imbedded in the Stratified Rate Model are submodels which forecast the total number of vehicles by vehicle type, new vehicles, in-migration vehicles, and scrappage of old vehicles and the fuel economy of new vehicles under explicit socioeconomic assumptions. 3. The Statewide Aggregate VMT and VFC Model This model accepts the vehicle fleet fuel economy from the Stratified Rate Model and socioeconomic data from the inventory. It estimates next year's statewide total VMT and VFC without regard to vehicle body type. Because the Aggregate Model is more directly linked to socioeconomic variables, the VMT forecasts from the model are used as control totals for the forecast years. 7

4. A Comparison/Adjustment Model This model compares and adjusts the total VMT and VFC from the Stratified Rate Model to match that from the Aggregate Model. As part of the comparison/adjustment process, statewide total diesel fuel is forecasted with a Diesel Fuel Consumption Model, and gasoline fuel is computed as the difference between total fuel and diesel fuel. Following the comparison/adjustment step, future year VMT, VFC, and vehicle fuel economy (VFE) for each vehicle type are then calculated. The above sequence produces the "next year" forecast. The process is then recursively applied to produce forecasts for each succeeding year in the forecast period. Statewide VMT from the above process is distributed to the 58 counties and two major road systems (State Highways and all "Other" public roads) as follows: For the base year, county VMT on state highways is obtained directly from the Traffic Operations Program's annual Traffic Accident Surveillance and Analysis System (TASAS) file. County VMT on all other public roads, except that on the local road functional class, is estimated from the annual Highway Performance Monitoring System (HPMS) file. Local road VMT cannot be obtained from either TASAS or HPMS. Therefore, statewide local road VMT is calculated as the difference: statewide total VMT (MVSTAFF) minus state highway VMT (TASAS) and other road VMT (HPMS). Statewide local road VMT is then allocated to each county on the basis of the relative distribution of the quantity, "county automobile registrations times the proportion of local road mileage to the total system mileage". For future years, the statewide VMT from MVSTAFF is distributed by applying countyspecific, annualized growth rates to the base year county estimates described above. The county-specific growth rates are calculated from county population estimates recently published by the Department of Finance. The annualized rates are normalized so that the sum of counties' VMT equals the MVSTAFF statewide VMT. Statewide VFC is distributed to the 58 counties and the two fuel types, gasoline and diesel, using estimates of county VMT, truck VMT and statewide estimates of vehicle fuel economy. Statewide county truck VMT or TMT distributions include all truck VMT except light-duty trucks. Physically these trucks are defined as vehicles having at least two axles and six tires. The county TMT distributions are based on the latest available county TMT distribution and the distributions of base year and forecast year county VMT estimates. 8

Figure-1 MOTOR VEHICLE STOCK, TRAVEL AND FUEL FORECASTING PROCESS BASE YEAR DATA AND FUTURE YEAR ASSUMPTIONS. Population. Personal Income. Prime Rate. Fuel Price (PPG). Lic. Driver. Gasoline Use. Diesel Use. New Vehicle VFE. Assumptions BASE YEAR x x x x x x x x FUTURE YEAR x x x x x x YEAR MODEL y y-1 y-2... y-25 Bal Total BASE YEAR VEHICLE STOCK (BY MODEL YEAR, BODY TYPE, FUEL TYPE) NO. OF VEHICLES 1 2... 11 T FUEL ECONOMY 1 2... 11 T STATEWIDE STRATIFIED VMT & VFC MODEL. Stock Update Model. MPG Update Model. VMT/Veh. Model. VMT & VFC Rate Model. Total Vehicles. Fleet MPG. Gasoline Use. Diesel. Total VMT. Total VFC STATEWIDE AGGREGATE VMT & VFC MODEL VMT & VFC = f(pop,inc,veh,mpg,fuel Price) Control Totals. VMT. VFC Total Agree? YES Print VMT & VFC By Body Type & Fuel Type From Stratified Model NO Adjust VMT/Veh. Model 9

IV. FORECAST ASSUMPTIONS As discussed in the previous section and shown in Figure-1, the MVSTAFF process requires base year estimates and future year projections of a number of socioeconomic variables; and explicit assumptions regarding the fuel economy of the vehicle fleet, by vehicle type. The assumptions made regarding the key variables, that drive the forecasting process, are briefly described below. A. SOCIOECONOMIC ASSUMPTIONS Base year (2002) estimates of population and the economic variables were obtained from the California Department of Finance (DOF), the state's official source of such information. Future year population was also obtained from DOF. Caltrans Division of Transportation System Information developed projections of the economic variables based on the information in the UCLA Anderson Forecast for the Nation and California, September 2003 (Ref. 1). The MVSTAFF forecasts, therefore, reflect the same scenario imposed on the DOF population projections and the existing legislation regarding current and future taxes on fuel. The resulting projections, which were used in the forecast, are shown graphically and in tabular form in Figures 2 to 7. A brief discussion of each variable is given below. 1. Population Population projections used for the years 2002-2025 were the latest data available from DOF (Ref. 3 & 4). These projections are shown in Figure-2. As can be seen, the state's population is projected to continue to increase. The rate increases from a high of 1.70 percent in 2003 and then continues to fall to a low of 1.07 percent in 2013. The rates increase slightly after year 2013 for the rest of the forecast period. 2. Inflation Assumptions: The U.S. Consumer Price Index Projections of total personal income and motor vehicle fuel prices are normally made on a current dollar basis. Because the MVSTAFF process operates on a constant dollar basis, these need to be adjusted for inflation by dividing them by projections of the U.S. Consumer Price Index (U.S. CPI). The projections of the U.S. CPI to 2025 are shown in Figure-3. It can be seen from Figure-3 that the CPI is projected to increase at an average rate of 3.00 percent per year throughout the forecast period. 3. Total Personal Income Per Person Statewide total personal income per person (IPP) is an important variable in a number of forecasting models used in the MVSTAFF process. For example, it is a major determinant of new car sales, vehicle ownership and annual miles of travel per person. 10

The 2002 base year income per person was from the California Department of Finance, and the annual percentage growth rates for the future years were derived from the UCLA Anderson Forecast for the Nation and California, September 2003 (Ref. 1). The forecast of statewide total personal income (TPI), in 1967 dollars, is shown in Figure- 4, and the forecast of total personal income per person in Figure-5. As can be seen, total personal income is expected to increase 0.45 percent and total personal income per person is expected to drop 1.23 percent respectively in 2003. Total personal income is projected to increase at an annual average rate of 3.26 percent for the forecast period. The income per person growth rates follow a similar pattern but at a lower rate which average to an annual rate of about 1.83 percent. 4. Fuel Price Fuel price is one of the most important variables in projecting future vehicle miles of travel and fuel consumption. This is because: (a) it directly and significantly determines the amount of vehicular travel, as shown in the development of the Statewide Aggregate VMT and VFC Model (Ref. 1); (b) over the past twenty years it has had the greatest variability of any of the socioeconomic variables used to forecast VMT and VFC; and (c) it influences the fuel economy of the new vehicle fleet which directly impacts fuel consumption. The fuel price variable used in the forecasting process is the price of gasoline, averaged over all grades, and full service and self service sales. The price includes all excise taxes but not sales taxes. Projected gasoline prices in constant 1967 dollars are given in Figure-6. They were estimated using the UCLA Anderson Forecast gasoline price forecast. Figure-6 shows the projected fuel prices in constant (1967) dollars. Fuel price is expected to continue to increase after the drop in 2004. The average annual rate for the forecast period is 0.59 percent. 5. Prime Lending Rate The prime lending rate is one of the variables used to estimate new vehicle sales, which is needed to annually update the vehicle fleet. The prime commercial bank rates for this year's forecast are given in Figure-7. The rate drops in 2003 to a low of 4.18 percent. It then increases for the forecast period. The rates are very stable and generally are between 6 and 7 percent. 11

POPULATION (MILLIONS) Figure-2 CALIFORNIA TOTAL POPULATION 2002-2025 55 50 45 40 35 30 2002 2007 2012 2017 2022 YEAR CALIFORNIA TOTAL POPULATION 2002-2025 Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Population in Millions Population 35.301 35.901 36.497 37.088 37.664 38.232 38.793 39.344 39.886 40.384 40.863 41.300 41.791 42.312 42.875 43.476 44.116 44.760 45.394 46.037 46.677 47.313 47.944 48.571 %-CH 1.701 1.659 1.618 1.553 1.510 1.466 1.422 1.378 1.247 1.188 1.069 1.188 1.247 1.331 1.402 1.473 1.458 1.416 1.417 1.390 1.362 1.335 1.308 12

400 Figure-3 U.S. CONSUMER PRICE INDEX 2002-2025 350 CPI 300 250 200 150 2002 2007 2012 2017 2022 YEAR U.S. CONSUMER PRICE INDEX, 1982-1984=100 Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 CPI 180.029 184.170 188.222 192.551 196.498 200.526 204.636 208.704 212.593 218.290 224.565 231.323 238.564 246.191 254.494 263.473 273.031 282.879 293.209 303.925 315.318 327.096 339.551 352.584 %-CH 2.300 2.200 2.300 2.050 2.050 2.050 1.988 1.864 2.679 2.875 3.009 3.130 3.197 3.373 3.528 3.628 3.607 3.652 3.655 3.748 3.735 3.808 3.839 13

Figure-4 CALIFORNIA TOTAL PERSONAL INCOME IN 1967 DOLLARS 500 TOTAL PERSONAL INCOME 450 400 350 300 250 200 2002 2007 2012 2017 2022 YEAR CALIFORNIA TOTAL PERSONAL INCOME Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 TPI in Billions (67$) TPI 211.118 212.070 212.939 219.075 227.961 234.879 243.984 254.114 264.972 274.094 283.703 292.669 302.625 313.025 324.092 335.608 347.504 360.394 373.394 385.977 399.452 412.912 427.309 441.654 %-CH 0.451 0.410 2.882 4.056 3.035 3.876 4.152 4.273 3.443 3.506 3.160 3.402 3.437 3.535 3.553 3.545 3.709 3.607 3.370 3.491 3.370 3.487 3.357 14

IPP (THOUSANDS) Figure-5 CALIFORNIA PERSONAL INCOME PER PERSON 10 9.5 9 8.5 8 7.5 7 6.5 6 5.5 2002 2007 2012 2017 2022 YEAR CALIFORNIA PERSONAL INCOME PER PERSON Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 IPP in Thousands (67$) IPP 5.981 5.907 5.834 5.907 6.053 6.143 6.289 6.459 6.643 6.787 6.943 7.086 7.241 7.398 7.559 7.719 7.877 8.052 8.226 8.384 8.558 8.727 8.913 9.093 %-CH -1.229-1.229 1.244 2.464 1.503 2.376 2.692 2.856 2.168 2.291 2.069 2.188 2.162 2.175 2.122 2.042 2.219 2.160 1.926 2.073 1.980 2.123 2.023 15

32 Figure-6 GASOLINE PRICE PER GALLON 2002-2025 31 FPPG (CENTS) 30 29 28 27 26 25 2002 2007 2012 2017 2022 YEAR GASOLINE PRICE PER GALLON IN 1967 DOLLARS Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Price in Cents (67$) Price 26.972 29.346 27.169 27.515 27.393 27.353 27.393 27.531 27.757 27.600 27.661 27.766 27.865 27.974 28.063 28.190 28.373 28.591 28.880 29.199 29.579 29.968 30.399 30.885 %-CH 8.805-7.419 1.271-0.441-0.147 0.147 0.502 0.821-0.564 0.219 0.379 0.359 0.390 0.317 0.456 0.649 0.766 1.011 1.105 1.303 1.315 1.438 1.600 16

PRIME LENDING RATE Figure-7 PRIME LENDING RATE 2002-2025 7.5 7 6.5 6 5.5 5 4.5 4 3.5 2002 2007 2012 2017 2022 YEAR PRIME LENDING RATE 2002-2025 Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Prime 4.680 4.180 4.800 5.480 6.893 6.688 6.499 6.302 6.103 6.103 6.175 6.318 6.462 6.534 6.677 6.821 7.036 7.036 7.036 7.036 7.036 7.036 7.036 7.036 %-CH -10.684 14.833 14.167 25.789-2.971-2.831-3.030-3.163 0.000 1.176 2.326 2.273 1.111 2.198 2.151 3.158 0.000 0.000 0.000 0.000 0.000 0.000 0.000 17

B. NEW VEHICLE FUEL ECONOMY The MVSTAFF process requires explicit assumptions of the fuel economy of new vehicles entering the fleet each year. The recent update of the MPG model using the 1994 to 2002 Department of Motor Vehicles vehicle population profile for California, and the EPA Gas Mileage Guides showed that the light duty vehicle fleets (autos and trucks of gross vehicle weight less than 10,000 pounds) meet the national Corporate Average Fuel Economy (CAFE) standards. Because of the fact that the CAFE standard has not been changed, it was assumed the new light duty fleets would continue to have the same fuel economy into the future. For the medium truck fleets (gross vehicle weight from 10,001 to 33,000 lbs.) and heavyduty truck fleets (gross vehicle weight greater than 33,000 lbs.), it was reasoned that the manufacturers and buyers are aware of the significance of the fuel operating cost to the trucking industry and that the long-term outlook is for higher fuel prices. Hence, there will be a continuous need and effort to improve truck fuel economy so that in the long run, fuel-operating costs will not increase beyond current levels. Using the vehicle fuel economy values from the 1977, 1982, 1987, 1992 Truck Inventory and Use Survey (TIUS) Reports (Ref. 6) and the 1997 Vehicle Inventory and Use Survey (VIUS) Report (Ref. 7) an average annual fleet MPG improvement was calculated for each vehicle and fuel type. These rates of improvement were assumed to continue in the future. Fuel economy of motorcycles was assumed to be a constant on-road value of 50.0 miles per gallon. 18

VEHICLES (MILLIONS) 45 40 35 30 25 20 Figure-8 CALIFORNIA TOTAL VEHICLES 2002-2025 2002 2007 2012 2017 2022 YEAR CALIFORNIA TOTAL VEHICLES 2002-2025 Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Vehicles in Millions Vehicles 24.662 24.993 25.316 25.858 26.501 27.055 27.685 28.339 29.002 29.574 30.145 30.666 31.238 31.832 32.460 33.115 33.794 34.493 35.182 35.860 36.551 37.232 37.924 38.605 %-CH 1.342 1.292 2.141 2.487 2.090 2.329 2.362 2.340 1.972 1.931 1.728 1.865 1.902 1.973 2.018 2.050 2.068 1.998 1.927 1.927 1.863 1.859 1.796 19

V. FORECAST RESULTS A. Motor Vehicle Stock The total vehicle figures used in this report are the average number of currently registered motor vehicles in operation in each calendar year. The estimates of the base year and the forecast years are provided in Figure-8. Values in the figure represent all vehicle body types (autos, trucks and motorcycles) and fuel types (gasoline and diesel). Total vehicles are expected to increase by 1.34% in 2003. However, the long-term forecast is for vehicles to continue to increase at an annual average rate of 2 percent for the forecast period. Total vehicles were stratified into body type, fuel type, and model year categories with the vehicle stock update model. Table-1 gives the forecasted number of vehicles in each body type and fuel type category for the years 2002 to 2016, 2020 and 2025. Figure-9 graphically shows the estimates of total gasoline plus diesel vehicles, by body type, for the years 2002 to 2025. The plots correspond to the data given in the upper part of Table-1. Although motorcycles are not shown as a separate entry in the figure, they are included in the "Total" graph. 20

TABLE-1: CALIFORNIA TOTAL VEHICLES (MILLIONS) VEH. CAL. BODY TYPE TYPE YEAR AUTOS TRK1 TRK2 TRK3 TRK4 M.C. TOTAL 2002 2003 18.027 18.260 3.316 3.366 2.305 2.340 0.402 0.405 0.122 0.123 0.491 0.499 24.662 24.993 2004 18.500 3.417 2.376 0.409 0.124 0.491 25.316 2005 18.896 3.497 2.431 0.416 0.126 0.492 25.858 T 2006 19.370 3.590 2.496 0.425 0.129 0.492 26.501 O T 2007 2008 19.778 20.243 3.671 3.761 2.552 2.615 0.433 0.441 0.131 0.133 0.492 0.492 27.055 27.685 A 2009 20.725 3.855 2.680 0.451 0.136 0.492 28.339 L 2010 21.215 3.950 2.746 0.460 0.139 0.493 29.002 2011 21.638 4.031 2.802 0.468 0.141 0.492 29.574 2012 2013 22.060 22.445 4.113 4.187 2.859 2.911 0.476 0.484 0.143 0.146 0.493 0.493 30.145 30.666 2014 2015 22.869 23.309 4.269 4.353 2.967 3.026 0.492 0.501 0.148 0.150 0.493 0.493 31.238 31.832 2016 23.774 4.442 3.088 0.510 0.153 0.494 32.460 2020 25.793 4.825 3.354 0.551 0.165 0.496 35.182 2025 28.331 5.304 3.687 0.603 0.180 0.500 38.605 2002 17.880 3.302 2.097 0.148 0.001 0.491 23.919 2003 2004 18.130 18.386 3.354 3.407 2.130 2.164 0.146 0.144 0.001 0.001 0.499 0.491 24.261 24.593 2005 18.794 3.488 2.216 0.144 0.001 0.492 25.135 G 2006 19.277 3.582 2.277 0.145 0.001 0.492 25.775 A 2007 19.693 3.663 2.330 0.147 0.001 0.492 26.326 S O 2008 2009 20.164 20.652 3.755 3.849 2.390 2.452 0.149 0.151 0.001 0.001 0.492 0.492 26.950 27.597 L 2010 21.146 3.944 2.514 0.154 0.001 0.493 28.252 I N 2011 2012 21.573 21.999 4.027 4.109 2.568 2.622 0.156 0.159 0.001 0.001 0.492 0.493 28.818 29.382 E 2013 2014 22.386 22.812 4.184 4.265 2.670 2.724 0.161 0.164 0.001 0.001 0.493 0.493 29.896 30.459 2015 23.253 4.350 2.778 0.167 0.001 0.493 31.043 2016 23.720 4.439 2.836 0.170 0.001 0.494 31.660 2020 2025 25.740 28.276 4.823 5.303 3.083 3.391 0.185 0.203 0.001 0.002 0.496 0.500 34.328 37.675 2002 0.147 0.014 0.207 0.253 0.121 0.000 0.742 2003 2004 0.130 0.113 0.012 0.010 0.210 0.212 0.259 0.265 0.122 0.123 0.000 0.000 0.733 0.724 2005 0.102 0.009 0.215 0.272 0.125 0.000 0.723 D 2006 0.093 0.008 0.218 0.280 0.127 0.000 0.726 I 2007 0.085 0.007 0.221 0.286 0.130 0.000 0.729 E 2008 0.079 0.006 0.224 0.293 0.132 0.000 0.735 S 2009 0.074 0.006 0.228 0.300 0.135 0.000 0.742 E 2010 0.069 0.005 0.232 0.306 0.138 0.000 0.750 L 2011 0.065 0.005 0.234 0.312 0.140 0.000 0.756 2012 0.062 0.004 0.238 0.318 0.142 0.000 0.763 2013 0.059 0.004 0.240 0.323 0.144 0.000 0.770 2014 0.057 0.003 0.244 0.328 0.147 0.000 0.779 2015 0.056 0.003 0.247 0.334 0.149 0.000 0.789 2016 2020 0.055 0.053 0.003 0.002 0.251 0.270 0.340 0.366 0.152 0.163 0.000 0.000 0.800 0.855 2025 0.055 0.001 0.296 0.399 0.178 0.000 0.929 21

50 Figure-9 CALIFORNIA TOTAL VEHICLES BY BODY TYPE 40 VEHICLES (MILLIONS) 30 20 10 0 2002 2007 2012 2017 2022 YEAR AUTO TRK1 TRK2 TRK3 TRK4 TOTAL 22

Figure-10 CALIFORNIA TOTAL VEHICLE MILES OF TRAVEL 550 VMT (BILLIONS) 500 450 400 350 300 2002 2007 2012 2017 2022 YEAR CALIFORNIA TOTAL VEHICLE MILES OF TRAVEL Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 VMT in Billion Miles VMT 321.371 320.118 328.341 335.314 345.344 353.547 362.903 372.440 381.891 391.057 399.562 407.171 415.481 424.067 433.155 442.423 451.814 461.377 470.531 479.305 488.000 496.554 505.092 513.252 %-CH -0.390 2.569 2.124 2.991 2.375 2.646 2.628 2.538 2.400 2.175 1.904 2.041 2.067 2.143 2.140 2.123 2.117 1.984 1.865 1.814 1.753 1.719 1.616 23

B. Vehicle Miles of Travel Statewide total vehicle miles of travel projected by the forecast are given in Figure-10. The values in the figure represent travel by all vehicle body types and fuel types on all public roads. The 2002 vehicle miles of travel (VMT) estimate of 321.371 is based on the 2002 on-road fuel consumption estimate from the Board of Equalization's sales data, and the 2002 onroad vehicle fleet fuel economy from the MVSTAFF Stratified Rate Model. Annual statewide VMT is expected to decrease 0.4 percent in 2003 but increase 2.6 percent in 2004. The long-term forecast is for VMT to continue to grow, but at significantly lower rates than it has in the past. The slow down is predicated on lower statewide population and economic growth. For air quality conformity analysis purposes the annual VMT in 5- year increments from 1990 are listed in Table-1.1. Forecasts of statewide total VMT stratified by six body types and two fuel types are given in Table-2. Graphs of VMT by body type are given in Figure-11. The graphs correspond to the data in the upper part of Table-2. Although VMT by motorcycles is not shown as a separate entry in the figure, it is included in the "Total VMT" graph. Table-1.1 Total Statewide VMT and Five-year Percent Change YEAR VMT %-CH 1990 259.003 1995 276.968 6.936 2000 306.371 10.616 2005 335.314 9.447 2010 381.891 13.890 2015 424.066 11.044 2020 470.531 11.095 2025 513.252 9.079 VMT in Billion Miles 24

Table-2 CALIFORNIA TOTAL VEHICLE MILES OF TRAVEL (BILLIONS) VEH. CAL. BODY TYPE TYPE YEAR AUTOS TRK1 TRK2 TRK3 TRK4 M.C. TOTAL 2002 2003 230.432 228.520 40.056 39.649 30.995 31.946 10.806 10.821 8.002 8.088 1.080 1.093 321.371 320.118 2004 234.169 40.806 33.255 10.852 8.178 1.081 328.341 2005 238.765 41.755 34.188 11.095 8.428 1.083 335.314 T 2006 245.714 43.047 35.328 11.427 8.746 1.082 345.344 O T 2007 2008 251.386 257.896 44.177 45.449 36.217 37.156 11.681 11.998 9.004 9.323 1.082 1.082 353.547 362.903 A 2009 264.534 46.744 38.073 12.337 9.668 1.083 372.440 L 2010 271.103 48.032 38.958 12.685 10.029 1.084 381.891 2011 277.542 49.319 39.821 12.955 10.336 1.083 391.057 2012 2013 283.493 288.785 50.515 51.586 40.603 41.288 13.232 13.481 10.653 10.947 1.084 1.084 399.580 407.171 2014 2015 294.633 300.673 52.724 53.868 42.040 42.816 13.761 14.052 11.257 11.572 1.085 1.085 415.500 424.066 2016 307.126 55.053 43.647 14.364 11.899 1.086 433.176 2020 333.724 59.669 47.050 15.762 13.236 1.090 470.531 2025 364.884 64.110 50.693 17.682 14.783 1.101 513.252 2002 229.072 39.989 28.064 1.881 0.015 1.080 300.101 2003 2004 227.355 233.145 39.600 40.770 28.999 30.269 1.904 1.930 0.017 0.018 1.093 1.081 298.968 307.213 2005 237.848 41.728 31.183 1.996 0.020 1.083 313.857 G 2006 244.868 43.026 32.275 2.079 0.021 1.082 323.351 A 2007 250.596 44.160 33.128 2.147 0.023 1.082 331.136 S O 2008 2009 257.147 263.819 45.435 46.732 34.022 34.892 2.229 2.316 0.025 0.026 1.082 1.083 339.938 348.867 L 2010 270.415 48.022 35.728 2.406 0.028 1.084 357.682 I N 2011 2012 276.875 282.845 49.309 50.507 36.543 37.280 2.482 2.558 0.029 0.031 1.083 1.084 366.322 374.304 E 2013 2014 288.151 294.008 51.579 52.717 37.925 38.631 2.628 2.702 0.032 0.033 1.084 1.085 381.399 389.175 2015 300.052 53.861 39.354 2.778 0.034 1.085 397.165 2016 306.506 55.048 40.127 2.857 0.035 1.086 405.659 2020 2025 333.088 364.210 59.665 64.107 43.277 46.636 3.183 3.583 0.039 0.044 1.090 1.101 440.342 479.681 2002 1.360 0.067 2.931 8.925 7.987 0.000 21.270 2003 2004 1.165 1.024 0.049 0.036 2.947 2.986 8.917 8.921 8.071 8.160 0.000 0.000 21.150 21.128 2005 0.917 0.027 3.005 9.099 8.408 0.000 21.457 D 2006 0.846 0.021 3.053 9.348 8.725 0.000 21.993 I 2007 0.791 0.017 3.089 9.534 8.981 0.000 22.411 E 2008 0.749 0.014 3.134 9.769 9.298 0.000 22.965 S 2009 0.716 0.012 3.182 10.022 9.642 0.000 23.573 E 2010 0.689 0.011 3.229 10.279 10.001 0.000 24.208 L 2011 0.666 0.010 3.278 10.474 10.307 0.000 24.734 2012 0.648 0.009 3.323 10.674 10.623 0.000 25.276 2013 0.634 0.008 3.362 10.853 10.915 0.000 25.772 2014 0.625 0.007 3.410 11.059 11.224 0.000 26.325 2015 0.621 0.006 3.462 11.274 11.538 0.000 26.901 2016 2020 0.620 0.637 0.006 0.004 3.520 3.773 11.507 12.579 11.863 13.197 0.000 0.000 27.516 30.190 2025 0.673 0.003 4.057 14.099 14.739 0.000 33.571 25

600 Figure-11 CALIFORNIA VEHICLE MILES OF TRAVEL BY BODY TYPE 500 VMT (BILLION MILES) 400 300 200 100 0 2002 2007 2012 2017 2022 YEAR AUTO TRK1 TRK2 TRK3 TRK4 TOTAL 26

Figure-12 CALIFORNIA TOTAL VEHICLE FUEL CONSUMPTION 29 28 27 26 25 24 23 22 21 20 19 18 17 16 VFC (BILLIONS) 2002 2007 2012 2017 2022 YEAR CALIFORNIA TOTAL VEHICLE FUEL CONSUMPTION Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 VFC in Billion Gallons VFC 17.658 17.594 17.959 18.240 18.712 19.097 19.551 20.019 20.489 20.933 21.350 21.725 22.145 22.581 23.048 23.534 24.019 24.523 25.005 25.465 25.932 26.382 26.842 27.273 %-CH -0.362 2.075 1.565 2.588 2.058 2.377 2.394 2.348 2.167 1.992 1.756 1.933 1.969 2.068 2.109 2.061 2.098 1.966 1.840 1.834 1.735 1.744 1.606 27

C. Vehicle Fuel Consumption Statewide total on-road fuel consumption projected by the forecast is given in Figure-12. The values represent total gasoline and diesel fuel used on all public roads. The base year (2002) values are estimates using Board of Equalization data. Forecasts beyond 2002 use the MVSTAFF process with the 2002 estimate as a base. As can be seen from Figure-12, on-road fuel consumption is expected to decrease 1.4% in 2003. Annual fuel consumption by vehicle type and fuel type for each year of the forecast is given in Table-3. Total fuel consumption is expected to increase for autos and all types of trucks. Diesel fuel consumption for autos and light trucks are decreasing because the numbers of these total vehicles are projected to decrease. Figure-13 graphs the annual total fuel consumption of the vehicle fleet by body type for years 2002 to 2025. The graphs correspond to the data given in the upper part of Table- 3. Although motorcycle fuel consumption is not shown as a separate entry in the figure, it is included in the "Total" graph. 28

Table-3: CALIFORNIA TOTAL VEHICLE FUEL CONSUMPTION (BILLIONS) VEH. CAL. BODY TYPE TYPE YEAR AUTOS TRK1 TRK2 TRK3 TRK4 M.C. TOTAL 2002 2003 10.578 10.480 2.161 2.142 2.151 2.198 1.374 1.372 1.373 1.380 0.022 0.022 17.658 17.594 2004 10.700 2.204 2.273 1.373 1.388 0.022 17.959 2005 10.822 2.249 2.324 1.401 1.423 0.022 18.240 T 2006 11.077 2.310 2.393 1.441 1.469 0.022 18.712 O T 2007 2008 11.287 11.537 2.364 2.425 2.447 2.506 1.471 1.509 1.506 1.552 0.022 0.022 19.097 19.551 A 2009 11.792 2.488 2.565 1.550 1.603 0.022 20.019 L 2010 12.047 2.551 2.622 1.592 1.656 0.022 20.489 2011 12.295 2.614 2.678 1.626 1.699 0.022 20.933 2012 2013 12.524 12.729 2.672 2.725 2.729 2.774 1.659 1.690 1.744 1.785 0.022 0.022 21.351 21.725 2014 2015 12.965 13.212 2.781 2.837 2.824 2.876 1.725 1.760 1.830 1.874 0.022 0.022 22.146 22.581 2016 13.480 2.896 2.932 1.800 1.920 0.022 23.049 2020 14.611 3.129 3.160 1.973 2.111 0.022 25.005 2025 15.949 3.357 3.404 2.212 2.328 0.022 27.273 2002 10.529 2.158 1.986 0.261 0.003 0.022 14.958 2003 2004 10.438 10.663 2.139 2.203 2.032 2.104 0.263 0.266 0.003 0.003 0.022 0.022 14.897 15.260 2005 10.789 2.248 2.153 0.275 0.003 0.022 15.490 G 2006 11.046 2.309 2.220 0.286 0.004 0.022 15.887 A 2007 11.259 2.363 2.271 0.295 0.004 0.022 16.214 S O 2008 2009 11.511 11.767 2.425 2.488 2.328 2.383 0.306 0.317 0.004 0.005 0.022 0.022 16.594 16.981 L 2010 12.023 2.551 2.437 0.329 0.005 0.022 17.366 I N 2011 2012 12.271 12.501 2.613 2.672 2.491 2.539 0.340 0.350 0.005 0.005 0.022 0.022 17.741 18.089 E 2013 2014 12.707 12.943 2.724 2.781 2.582 2.629 0.359 0.369 0.005 0.006 0.022 0.022 18.400 18.749 2015 13.190 2.837 2.678 0.379 0.006 0.022 19.112 2016 13.458 2.896 2.730 0.390 0.006 0.022 19.502 2020 2025 14.588 15.925 3.129 3.357 2.944 3.173 0.434 0.489 0.007 0.007 0.022 0.022 21.124 22.973 2002 0.049 0.003 0.165 1.113 1.370 0.000 2.700 2003 2004 0.042 0.037 0.002 0.002 0.167 0.169 1.109 1.107 1.377 1.384 0.000 0.000 2.697 2.699 2005 0.033 0.001 0.171 1.126 1.419 0.000 2.750 D 2006 0.030 0.001 0.174 1.155 1.465 0.000 2.825 I 2007 0.028 0.001 0.176 1.176 1.502 0.000 2.883 E 2008 0.026 0.001 0.179 1.203 1.547 0.000 2.957 S 2009 0.025 0.001 0.182 1.233 1.598 0.000 3.038 E 2010 0.024 0.000 0.184 1.263 1.651 0.000 3.123 L 2011 0.024 0.000 0.187 1.286 1.694 0.000 3.192 2012 0.023 0.000 0.190 1.310 1.739 0.000 3.262 2013 0.022 0.000 0.192 1.331 1.780 0.000 3.325 2014 0.022 0.000 0.195 1.356 1.824 0.000 3.397 2015 0.022 0.000 0.198 1.381 1.868 0.000 3.469 2016 2020 0.022 0.022 0.000 0.000 0.201 0.216 1.410 1.539 1.914 2.104 0.000 0.000 3.547 3.881 2025 0.024 0.000 0.232 1.723 2.321 0.000 4.300 29

30 Figure-13 CALIFORNIA VEHICLE FUEL CONSUMPTION BY BODY TYPE 25 VFC (BILLION GALLONS) 20 15 10 5 0 2002 2007 2012 2017 2022 YEAR AUTO TRK1 TRK2 TRK3 TRK4 TOTAL 30

MILES PER GALLON Figure-14 CALIFORNIA TOTAL VEHICLE FLEET FUEL ECONOMY 19 18.9 18.8 18.7 18.6 18.5 18.4 18.3 18.2 18.1 18 2002 2007 2012 2017 2022 YEAR CALIFORNIA TOTAL VEHICLE FLEET FUEL ECONOMY Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 MPG: Miles Per Gallon MPG 18.199 18.195 18.283 18.383 18.456 18.513 18.562 18.604 18.638 18.681 18.714 18.742 18.761 18.780 18.793 18.799 18.810 18.814 18.817 18.822 18.819 18.822 18.817 18.819 %-CH -0.022 0.484 0.547 0.397 0.309 0.265 0.226 0.183 0.231 0.177 0.150 0.101 0.101 0.069 0.032 0.059 0.021 0.016 0.027-0.016 0.016-0.027 0.011 31

D. Vehicle Fuel Economy Forecasts of the total fleet on-road fuel economy are given in Figure-14. The results are a direct output of the Stratified Rate Model, which computes the harmonic average fuel economy by weighting the number of vehicles in each stratum by the annual miles of travel and fuel economy of that stratum. As can be seen from Figure-14, total fleet fuel economy is expected to improve slightly throughout the forecast period. This is the result of the assumption that the new car fleet fuel economy will remain at 27.5 miles per gallon, replacing the older and lower fuel efficiency vehicles. Fuel economies of the fleet, stratified by body type and fuel type for each year of the forecast, are given in Table-4. Vehicle fuel economy is projected to continuously improve for all strata of vehicles. The greatest improvements are being projected for the heavy trucks. Fuel economy of year 2025 automobile fleet will be slightly (5.02 percent) better than it was in 2002; while the total vehicle fleet fuel economy will be only 3.40 percent better than it was in 2002. Figure-15 graphs the fuel economy of the vehicle fleet stratified by body type for the years 2002 to 2025. The graphs correspond to the data given in the upper part of Table- 4. Although the fuel economy of motorcycles (assumed to be a constant value of 50.0 miles per gallon) is not shown in the figure, its effect is included in the "Total" graph. 32

Table-4: CALIFORNIA TOTAL VEHICLE FLEET FUEL ECONOMY VEH. CAL. BODY TYPE TYPE YEAR AUTOS TRK1 TRK2 TRK3 TRK4 M.C. TOTAL 2002 21.784 18.538 14.408 7.863 5.830 50.000 18.199 2003 2004 21.806 21.886 18.514 18.513 14.532 14.630 7.886 7.903 5.859 5.894 50.000 50.000 18.195 18.283 2005 22.063 18.568 14.712 7.919 5.924 50.000 18.383 T 2006 22.183 18.633 14.760 7.930 5.954 50.000 18.456 O 2007 22.271 18.688 14.799 7.941 5.978 50.000 18.513 T A 2008 2009 22.354 22.433 18.740 18.785 14.824 14.846 7.950 7.961 6.008 6.033 50.000 50.000 18.562 18.604 L 2010 22.504 18.826 14.860 7.966 6.058 50.000 18.638 2011 22.574 18.868 14.871 7.969 6.082 50.000 18.681 2012 22.636 18.903 14.877 7.974 6.107 50.000 18.715 2013 22.687 18.933 14.882 7.978 6.132 50.000 18.742 2014 22.726 18.958 14.886 7.977 6.152 50.000 18.762 2015 22.757 18.987 14.888 7.982 6.177 50.000 18.780 2016 2020 22.784 22.841 19.010 19.068 14.889 14.891 7.981 7.990 6.196 6.271 50.000 50.000 18.794 18.817 2025 22.878 19.096 14.891 7.994 6.350 50.000 18.819 2002 2003 21.757 21.782 18.532 18.509 14.128 14.273 7.210 7.228 5.730 5.744 50.000 50.000 20.063 20.069 2004 2005 21.865 22.044 18.509 18.566 14.389 14.484 7.247 7.259 5.758 5.766 50.000 50.000 20.132 20.262 G 2006 22.167 18.630 14.541 7.271 5.776 50.000 20.353 A 2007 22.256 18.687 14.586 7.284 5.785 50.000 20.423 S 2008 22.340 18.739 14.617 7.290 5.795 50.000 20.485 O L 2009 2010 22.420 22.492 18.784 18.825 14.642 14.660 7.302 7.308 5.800 5.804 50.000 50.000 20.544 20.596 I 2011 22.564 18.868 14.673 7.308 5.814 50.000 20.648 N E 2012 2013 22.626 22.676 18.902 18.932 14.681 14.687 7.314 7.320 5.817 5.823 50.000 50.000 20.692 20.728 2014 2015 22.716 22.748 18.958 18.987 14.693 14.695 7.320 7.327 5.823 5.827 50.000 50.000 20.757 20.781 2016 22.775 19.009 14.697 7.327 5.832 50.000 20.801 2020 2025 22.833 22.870 19.068 19.096 14.699 14.700 7.333 7.333 5.836 5.846 50.000 50.000 20.846 20.880 2002 27.704 23.642 17.783 8.016 5.830 0.000 7.877 2003 27.763 23.721 17.697 8.042 5.860 0.000 7.842 2004 27.788 23.718 17.631 8.061 5.894 0.000 7.828 2005 28.064 23.667 17.586 8.080 5.924 0.000 7.802 D 2006 28.112 26.287 17.555 8.092 5.954 0.000 7.784 I 2007 28.213 23.999 17.535 8.105 5.979 0.000 7.773 E 2008 28.301 23.985 17.521 8.118 6.009 0.000 7.767 S 2009 28.659 23.992 17.513 8.131 6.034 0.000 7.760 E 2010 28.667 24.000 17.507 8.137 6.058 0.000 7.752 L 2011 28.023 24.013 17.504 8.143 6.083 0.000 7.749 2012 27.914 24.023 17.502 8.150 6.108 0.000 7.748 2013 28.603 24.019 17.501 8.156 6.133 0.000 7.751 2014 28.536 24.017 17.501 8.156 6.153 0.000 7.749 2015 2016 28.445 28.370 23.969 24.000 17.500 17.500 8.162 8.162 6.178 6.198 0.000 0.000 7.755 7.757 2020 2025 28.343 28.320 23.938 23.896 17.500 17.500 8.175 8.181 6.272 6.352 0.000 0.000 7.779 7.808 33

25 Figure-15 CALIFORNIA VEHICLE FLEET FUEL ECONOMY BY BODY TYPE 20 MILES PER GALLON 15 10 5 2002 2007 2012 2017 2022 YEAR AUTO TRK1 TRK2 TRK3 TRK4 TOTAL 34

REFERENCES 1. UCLA, "The UCLA Anderson Forecast for the Nation and California", September 2003. 2. The DRI-WEFA Group, "U.S. Economy, The 25-Year Focus", Spring Issue, 2002. 3. State of California, Department of Finance, E-6 County Population Estimates and Detailed Components of Change, July 1, 2000 2002, with Historical 1999 Estimates and Census 2000 Count, January 2003. 4. State of California, Department of Finance, Updated I 90-00 July Estimates of the Population of California, State and County, July 1, 1990-1999, with 1990 and 2000 Census Counts, January 2003. 5. R. L. Polk, "Annual National Vehicle Population Profile, California", 1983, 1984, 1986, 1988, 1990, 1992. 6. U.S. Department of Commerce, Bureau of the Census, Truck Inventory and Use Survey, 1977, 1982, 1987 and 1992. 7. U.S. Department of Commerce, Bureau of the Census, Vehicle Inventory and Use Survey, 1997. 35

APPENDIX A Vehicle Body Type Definitions: The motor vehicle fleet is stratified into six classes by body type, one class of autos, four classes of trucks by gross vehicle weight and one class of motorcycles. These are defined as follows: AUTOS TRK1 TRK2 TRK3 TRK4 MC AUTOS include all passenger vehicles registered as regular autos and station wagons. TRK1 includes all Truck Gross Vehicle Weight Class 1 trucks (GVW 0 to 6,000 lbs.) TRK2 includes all Truck Gross Vehicle Weight Class 2 trucks (GVW 6,001 to 10,000 lbs.) TRK3 includes trucks of Truck Gross Vehicle Weight Classes 3 (GVW 10,001 to 14,000 lbs.), 4 (GVW 14,001 to 16,000 lbs.), 5 (GVW 16,001 to 19,500 lbs.), 6 (GVW 19,501 to 26,000 lbs.), and 7 (GVW 26,001 to 33,000 lbs.) TRK4 includes all trucks of Truck Gross Vehicle Weight Classes 8 and above (GVW 33,001+ lbs.) MC includes all registered motorcycles which excludes motor-bicycles and off-road motor-powered dirt bikes. 36