Dunlop/Falken Releases Real-World Consumer Cost Analysis of California Tire Efficiency Regulations, Data Finds Consumer Savings Is Up to 91% Lower Than Projected

DTNA analysis finds California’s projected consumer savings remain theoretical, while the actual financial, safety and performance consequences will depend on how manufacturers redesign thousands of replacement tires to comply.

RANCHO CUCAMONGA, Calif., Sept. 15, 2026 (GLOBE NEWSWIRE) — Dunlop Tire North America (DTNA) today released the next phase of its analysis of California’s recently adopted Replacement Tire Efficiency Program, finding that the state’s widely cited $153 modeled net consumer savings can vary dramatically depending on the tire, the consumer and the engineering pathway used to comply.

In DTNA’s updated economy-tire perspective, a common 195/65R15 tire priced at $64.16 rises approximately 21% to $77.63 – based on an illustrative 16% raw-material impact, 3% capital-expenditure recovery and 2% design/engineering cost – while an illustrative 20% reduction in service life increases tire cost per mile approximately 51% and requires 25% more tires to travel the same distance. After applying DTNA’s lifecycle perspective to CEC’s modeled fuel benefit, the approximately $153 modeled net consumer benefit falls to about $14 or less.

By comparison, DTNA’s premium-tire example retains approximately $139 of modeled net consumer benefit, while its light-truck example illustrates how adding tread sufficiently to qualify for an exclusion can potentially reduce tire cost per mile but leave the product with no mandated rolling-resistance improvement. Same regulation. Same stated objective. Three very different consumer and environmental outcomes.

DTNA supports efforts to reduce unnecessary fuel consumption and associated CO2 emissions, provided those objectives are pursued transparently and the costs, benefits and potential tradeoffs are clearly communicated to California consumers. As a Tier 1 tire manufacturer and the company behind the Dunlop and Falken Wildpeak brands, DTNA’s first responsibility is to design and manufacture tires that safely perform throughout their intended service life. Lower rolling resistance can reduce vehicle fuel and energy consumption; the unresolved question is what consumers will ultimately pay in tire cost, tire life, product choice, safety and performance to achieve that benefit.

THREE TIRES — THREE VERY DIFFERENT CONSUMER OUTCOMES
To illustrate how differently the same regulation can affect California consumers, DTNA examined three common replacement-tire applications representing economy, light-truck and premium consumers using CEC/Smithers data, CEC-referenced Treadwell mileage estimates, California market data and illustrative engineering responses. These examples are sensitivities, not predictions of how any individual manufacturer will respond. Their purpose is to demonstrate how different, technically plausible engineering pathways can produce materially different consumer outcomes.

195/65R15 cost sensitivity: +21% = 16% raw material + 3% capital expenditure + 2% design/engineering

195/65R15 cost perspective: +21% = 16% raw material + 3% capital expenditure + 2% design/engineering. This is a DTNA scenario assumption, not a CEC estimate.

*DTNA lifecycle perspective based on CEC’s modeled fuel-savings framework and the National Academies’ analysis showing that an RRC advantage created through reduced starting tread depth diminishes when evaluated over the tire’s full-service life. The Academies’ illustrative analysis found that a 10% new-tire RRC difference attributable to tread depth translated to approximately a 6% difference in lifetime-average RRC.

The comparison demonstrates why DTNA believes a single statewide consumer-savings estimate cannot adequately describe this regulation. In the economy example, an illustrative combination of technology and reduced tread produces approximately $14 or less in modeled net benefit, compared with CEC’s $153 modeled Phase 2 consumer estimate, while increasing tire cost per mile approximately 51% and requiring 25% more tires to travel the same distance. The premium example assumes that a higher-priced tire can incorporate more sophisticated technology while maintaining service life; however, its substantially higher upfront cost may offset a significant portion of the modeled fuel savings, limiting the net benefit to consumers. In the light-truck example, increasing tread depth sufficiently to qualify for an exclusion can potentially increase tire life and reduce tire cost per mile—but the regulation would then mandate no rolling-resistance improvement from that product.

Same regulation. Same stated objective. Three very different consumer and environmental outcomes.

CONSUMER SAVINGS — A RED HERRING IN THE REGULATORY DEBATE
The frequently cited claim that California consumers will save money under the regulation has become a red herring in the public discussion. California created an energy-efficiency regulation intended to reduce vehicle fuel and energy consumption and associated CO₂ emissions. CEC estimates that a typical Phase 2 passenger-tire consumer could save approximately $179 in fuel over the life of a set of tires, against an assumed $26 increase in the cost of four tires, producing approximately $153 in modeled net consumer savings.

Those figures are estimates—not observed economic results from the compliant replacement tires California consumers will ultimately purchase. Fuel savings are a reasonable expectation. Net consumer savings remain a projection, and the financial, safety and performance costs required to achieve those fuel savings remain unknown. The actual result will depend on what the redesigned tire costs, how long it lasts, how its rolling resistance changes as it wears, the vehicle, miles driven, fuel price and, critically, what engineering changes the manufacturer makes to achieve compliance.

Because manufacturers are still determining how individual replacement-tire lines will be adapted to meet California’s requirements, the final cost, tread life and complete performance characteristics of many affected products remain unknown. The question is therefore not simply whether lower rolling resistance can save fuel. It can. The question is what California consumers will ultimately pay—in tire cost, tire life, product choice, safety and performance—to achieve that benefit.

THE CONSUMERS LEAST ABLE TO ABSORB THE COST MAY BE IMPACTED THE MOST
Statewide averages can conceal significant differences between consumers. A $10 or $20 increase has a fundamentally different impact on a $64 economy tire than on a $250 premium tire, and manufacturers of lower-priced tires have substantially less economic room to incorporate advanced compounds, materials and construction technologies while maintaining the price point the customers expect.

DTNA’s California market analysis illustrates the issue. In the common 195/65R15 replacement size, approximately *95% of California volume (*GFK Data) is Tier 4, with approximately 73% of the associated vehicle-age profile falling within 2014 or older model years.

These are the types of everyday consumers maintaining older passenger vehicles who often depend on affordable replacement tires. Yet these consumers may experience the largest percentage increase in tire cost and may have the least financial ability to absorb it. A statewide average consumer-savings calculation can obscure the consumer most economically
exposed to the regulation.

TIRE PRESSURE — COMPARING TWO MODELED EFFICIENCY OPPORTUNITIES
There is another efficiency opportunity that deserves the same analytical attention California has given rolling resistance: maintaining tires at the vehicle manufacturer’s recommended inflation pressure.

It is important to distinguish modeled outcomes from measured outcomes on both sides of this comparison. CEC projects that its Replacement Tire Efficiency Program will save approximately 141 million gallons of gasoline annually, nearly $1 billion in annual fuel and electricity costs and approximately 2 million metric tons of CO₂ emissions. Those are modeled future outcomes based primarily on the energy benefit CEC expects from reducing replacement-tire rolling resistance. They are not measured savings from the compliant tires California consumers will ultimately purchase, because most of those redesigned tires do not yet exist.

The same limitation applies to DTNA’s pressure analysis. DTNA is not asserting that the current California fleet averages 5 psi below placard pressure. DTNA uses 5 psi below placard solely as a reference perspective to compare the potential scale of pressure management with the potential scale of California’s tire-efficiency regulation.

The 5-psi reference has historical context. In NHTSA’s national tire-pressure analysis used in developing federal TPMS requirements, passenger cars that would have triggered a direct-measurement warning under the analyzed threshold averaged 6.8 psi below placard across their four tires, while affected light trucks averaged 8.7 psi below placard. NHTSA estimated that approximately 26% of passenger cars and 29% of light trucks fell into those affected groups. Those measurements predate widespread TPMS and should not be interpreted as the condition of today’s fleet. They do, however, demonstrate that a 5-psi perspective is within the range historically measured by NHTSA and provides a reasonable reference point for examining the potential magnitude of pressure-related efficiency.

National Academies research found that inflation pressure has a direct effect on tire rolling resistance and identified maintaining recommended inflation pressure as one means of reducing average rolling resistance in service. For the perspective used here, a 5-psi pressure deficit represents approximately a 7% rolling-resistance penalty.

CEC’s regulation likewise begins with rolling resistance. CEC establishes new-tire RRC requirements and then calculates the fuel, electricity, hydrogen, consumer-dollar and CO₂ benefits expected from that improvement. Those calculations are legitimate tools for evaluating policy, but they remain projections based on assumed future efficiency improvements—not observed outcomes. They do not establish what the compliant tires will ultimately cost, how long they will last, what engineering pathways manufacturers will use, how those tires will perform throughout their lives or how much of the market may migrate into excluded product categories.

DTNA therefore compared the two strategies using the same basic RRC-to-energy framework: California’s modeled reduction in new-tire rolling resistance versus a hypothetical 5 psi fleet-wide pressure deficit restored to placard pressure.

The 5-psi column is a DTNA perspective, not an estimate of current California fleet inflation. It compares the approximately 7% rolling-resistance penalty associated with the reference 5 psi pressure deficit with the rolling-resistance improvement underlying CEC’s Phase 2 model and applies that relative relationship to CEC’s published 2035 savings estimates. Actual results would depend on the pressure distribution of the contemporary California fleet, vehicle mix, driving conditions and other factors.

The comparison does not establish that pressure maintenance can replace California’s tire-efficiency regulation. It demonstrates that both sets of savings are calculations and that pressure management may represent another efficiency opportunity of potentially significant scale. Under the 5-psi reference case, restoring the fleet to placard pressure produces a modeled gross fuel, energy and CO₂ opportunity approximately half the magnitude of CEC’s headline RRC opportunity, without redesigning a tire.

THE LIFETIME COMPARISON MATTERS – CALIFORNIA TESTS THE TIRE NEW; THE CONSUMER OWNS IT WORN
There is another important distinction. California regulates the rolling resistance of the tire when it is new, while consumers operate that tire throughout its wear life. That distinction matters because consumers buy a tire for the miles it delivers over its entire service life—not simply for its performance when new. If a redesigned tire reaches replacement depth sooner, a consumer may need to purchase more tires to travel the same distance. That can change the economics of the regulation while also increasing the environmental impact associated with manufacturing, transporting, installing and ultimately recycling or disposing of additional tires. DTNA recognizes that reducing rolling resistance can deliver fuel and CO₂ benefits, but those benefits should be evaluated over the tire’s full-service life and weighed against any changes in cost, mileage, safety, performance and overall tire consumption.

The National Academies found that rolling resistance normally declines as tires wear and that the RRC gap between different tires can narrow over their service lives. In its illustrative tread-depth comparison, a 10% new-tire RRC difference became approximately a 6% lifetime-average difference. The lower-RRC tire retained an efficiency advantage; the Academies did not conclude that the advantage disappeared.

DTNA applies that same principle in its analysis. The LRR tire continues receiving the rolling-resistance benefit it retains throughout its life. In DTNA’s existing 195/65R15 perspective, the portion of the improvement attributed to technology retains its full benefit, while only the illustrative tread-depth-related portion is adjusted using the Academies’ reduced-gap relationship. That results in approximately 81% of the original new-tire RRC improvement remaining on a lifetime-average basis in that scenario.

Applying that same relationship only as an illustrative statewide perspective produces another useful comparison:

The lifecycle column is a DTNA perspective, not a CEC or National Academies forecast of the California program. It extends the methodology used in DTNA’s 195/65R15 example to illustrate how the CEC benefit could change if part of the new-tire RRC advantage narrows with wear. Different tire technologies and manufacturer responses could produce materially different lifetime results.

On this basis, the 5-psi pressure perspective represents approximately 51% of CEC’s headline modeled benefit and approximately 64% of DTNA’s lifecycle-adjusted LRR perspective.

That comparison is significant, but its larger implication is not that one modeled strategy should replace another. It is that California should apply the same analytical standard to both. CEC has calculated a major future fuel and CO₂ benefit from reducing new-tire rolling resistance. DTNA has used the same general logic to demonstrate that maintaining tire pressure could also represent a significant efficiency opportunity if meaningful underinflation persists in today’s fleet.

The difference is that pressure maintenance requires no reduction in tread depth, no new compound, no lighter casing, no additional tire technology, no change in expected tire life and no increase in the purchase price of the tire itself. It also has the potential to reach tires already installed on vehicles, including products excluded from the replacement-tire regulation.

The unanswered question is therefore straightforward: what is the actual pressure condition of today’s California fleet?

TPMS has substantially reduced severe underinflation, but the federal system is designed primarily to warn motorists of significant pressure loss rather than maintain tires continuously at placard pressure. Historical NHTSA data cannot answer how far below placard today’s TPMS-equipped California fleet operates, and neither can an assumption that TPMS has eliminated the problem.

California should measure it. If contemporary fleet testing finds that average recoverable pressure is substantially less than 5 psi, the opportunity will be correspondingly smaller. If meaningful underinflation remains, the fuel, consumer-dollar and CO₂ opportunity could be substantial. Before California treats projected savings from future low-rolling-resistance tires as an established consumer or environmental outcome, it should understand the other side of the same equation: how much energy is being lost today simply because tires already on California vehicles are operating below their recommended pressure.

SAFETY AND PERFORMANCE — CALIFORNIA REGULATES THE RESULT, BUT MANUFACTURERS DETERMINE HOW TO GET THERE
A tire is a complex safety product. Rolling resistance must be balanced with wet and worn-wet performance, hydroplaning resistance, tread life, durability, handling, ride, noise, snow performance and the demands of the vehicle on which it is installed. CEC and Smithers testing demonstrate that low rolling resistance, strong wet performance and long tire life can coexist in individual tire designs; DTNA does not dispute that. But demonstrating those characteristics in existing tires is fundamentally different from demonstrating that many existing replacement tires can be redesigned to significantly reduce rolling resistance while preserving their current safety margins, performance, durability, mileage and price.

Manufacturers can respond with advanced compounds and materials, changes in casing or sidewall construction, weight reduction, reduced starting tread depth or combinations of these approaches. In certain applications, they may instead increase tread depth sufficiently to qualify for an exclusion, while products may also migrate toward qualifying all-weather or other excluded categories. Those engineering pathways are not equivalent. Reducing starting tread can lower new-tire rolling resistance but may reduce available mileage and cause the tire to reach shallower tread depths sooner; increasing tread can extend service life but may increase tread squirm and affect handling or towing characteristics; advanced technology may preserve performance and tread life, but at additional cost that is much easier to absorb in a $250 premium tire than in a $64 economy tire.

A regulation that measures one characteristic of a new tire cannot assume that thousands of different tire designs will reach that number through the same engineering pathway—or with the same real-world safety, performance, financial or environmental outcome.

MARKET RESPONSE MAY ALSO REDUCE THE REGULATION’S REACH
The environmental outcome will depend not only on how manufacturers redesign regulated tires but also on how much of the California replacement-tire market ultimately remains regulated. DTNA’s market analysis indicates that approximately 85% of replacement-tire SKUs are currently within the regulated population, while existing market migration toward qualifying all-weather products could reduce that population to approximately 74% in the relatively near term. Additional migration resulting from manufacturers redesigning products to qualify for exclusions remains unknown, and DTNA is not assigning a numerical value to that potential response.

Consumers and manufacturers would not be doing anything improper by selecting or producing products that legitimately qualify for exclusions established by the regulation; it is simply a market response to the rules California has created. But it matters to the environmental calculation. If the regulated population declines, the ultimate measure of success cannot simply be whether the tires remaining inside the program meet a laboratory RRC threshold. It must be whether California achieves the projected fleet-wide reduction in fuel and energy consumption and associated CO₂ emissions—and what consumers ultimately paid in cost, choice, tire consumption, safety and performance to achieve it.

WET-ROAD SAFETY DESERVES PARTICULAR ATTENTION
Federal analysis of NHTSA crash data reported annual averages 2019-2023 of approximately 547,047 crashes, 219,039 injuries and 2,810 fatalities on wet pavement, representing approximately 10% of crashes, 9% of crash injuries and 7% of crash fatalities during the analyzed period. Those statistics do not attribute the crashes to tires or tread depth; they provide context for why engineering changes affecting tread depth, wet stopping or hydroplaning performance deserve careful consideration when evaluating tire efficiency policy.

FROM POLICY DEBATE TO CONSUMER SUPPORT
California has adopted the regulation. DTNA will continue to provide technical input as implementation proceeds while preparing dealers and consumers for the changes ahead. Dunlop Academy will introduce dedicated California Replacement Tire Efficiency curriculum covering rolling resistance, tread depth and tire life, wet and worn-wet performance, hydroplaning, tire pressure and TPMS, product categories and exclusions, and lifecycle tire economics. DTNA also plans consumer-facing tools to help dealers explain purchase price, expected mileage, cost per mile, estimated fuel savings and potential performance implications so consumers understand what changed, why it changed, what they are paying for and what they are receiving in return.

“As a Tier 1 tire manufacturer of Dunlop and Falken Wildpeak tires, our first responsibility is to design and manufacture tires that safely perform throughout their intended service life,” said Darren Thomas, President and CEO of Dunlop Tire North America. “We support efforts to reduce unnecessary fuel consumption and CO₂ emissions, but that support depends on understanding the full range of costs, benefits and tradeoffs for California consumers. We should not look at a projected fuel benefit in isolation without also asking what consumers may ultimately pay to achieve it in tire cost, tire life, safety and performance.”

“The $153 consumer-savings claim has become a red herring. It is a modeled economic projection, not an observed consumer result. Lower rolling resistance can save fuel. What we do not yet know is what thousands of redesigned tires will cost, how long they will last, how they will perform throughout their lives or which engineering pathways manufacturers will choose. Those questions matter particularly to the everyday consumer buying a $64 tire, where even a modest dollar increase can represent a significant percentage of the purchase price.”

“California has made its decision. Now our responsibility is to help dealers and consumers understand what it means in the real world. The tire dealer will be standing across the counter explaining what changed, what it costs and what the consumer is getting for the money. We want those dealers armed with the engineering knowledge, data and tools to have that conversation clearly and to help consumers make decisions that put tire safety first.”

DTNA will announce the first Dunlop Academy California Replacement Tire Efficiency training sessions and consumer resources as implementation planning progresses.

Mark your calendar and join Dunlop Tires North America (DTNA) as Executives Darren Thomas, Ken Hsu, and Rick Brennan as they share insights and statistics surrounding California’s new tire efficiency requirements.

This webinar will be in a Q&A format in which DTNA executives will field questions from viewers on the subject.

Use the link below on Thursday, September 17th at 1PM PDT to join:
https://teams.microsoft.com/l/meetup-join/19%3ameeting_MmYxZDZkOGMtZWNjOC00MzU1LTllYjItNjM5NjYwMjBjNzkw%40thread.v2/0?context=%7b%22Tid%22%3a%22e29a14bb-e00f-42a4-907f-bcdfc3b9967b%22%2c%22Oid%22%3a%22cc3bbf8a-0914-4f10-b43f-1a0841a30bee%22%7d

Dunlop Tires North America
Dunlop | Falken Brand Tires
INDUSTRY AND MEDIA INQUIRIES
Industry representatives, trade organizations and other stakeholders with questions, concerns or interest in further discussion regarding California’s Replacement Tire Efficiency Program are encouraged to contact Darren Thomas, President & CEO of Dunlop Tires North America (DTNA) directly at: [email protected]

DTNA welcomes constructive dialogue and industry engagement as California moves forward with implementation of these requirements.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/28cb59e8-3faf-4b89-8c2d-6cee33d1f16f